Tail Spend Becomes Increasing Focus for Companies

In the past five years, tail spend has become an increasing area of focus for companies thanks to supplier risk, operational risk and bloated costs, according to a study released by The Hackett Group.

From Fairmarkit:

• Over half of the companies that responded said that tail spend comprises over 10% of their annual spend.
• The majority of respondents reported that over 80% of their suppliers were within their tail spend, but almost 20% said reported this figure to be over 90%. 
• While respondents recognize the importance of managing tail spend, almost two-thirds of respondents have seen minimal savings with their tail spend management programs thus far, compared to the savings they are seeing in non-tail spend.
• Almost 60% of respondents believe that more than 7% savings are achievable.
• 40% of respondents stated that difficulty managing end users also prevented them from properly managing tail spend.