What is Tail Spend
Tail Spend, also referred to as unmanaged spending, includes an organization's expenditures that fall outside its usual and defined procurement cycle. The tail spend management process aids organizations in uncovering new prospects for sustained growth, providing detailed and specific insights into spending patterns and behaviors. Strategically targeting this segment is essential for delivering value and enhancing savings.
Importance of Tail Spend Management
Tail spend represents approximately 20% of the overall expenditure. Nonetheless, it encompasses
80% of suppliers and a variety of diverse indirect spending categories that do not constitute
the core of the business.
Many firms and organizations using advanced spend analytics often overlook the tail spend,
leaving it "uncategorized." This is why tail spend management is commonly neglected, with the
focus primarily on strategic spending. However, bypassing this step causes organizations to
overlook significant opportunities for substantial savings.
Altaproc will do the work for you unlocking abundant saving opportunities for you with minimal
effort.
Our Process
- 1. Tail Spend analytics: Tail spend analytics: We collect your spending data, analyze
it, and subsequently define and calculate your tail spend. Continuously learning from
your past patterns, we establish a data-driven foundation to address the tail.
- 2. Addressing spend to our best suppliers: We recognize your primary and preferred
suppliers, we strive to channel spending toward the most advantageous existing
suppliers. Employing a category-by-category strategy, we enhance leverage with them to
amplify your organization's strategic procurement capabilities.
- 3. Advanced solutions: We deploy automated channels and advanced solutions across all
facets of tail spend, effectively managing it to generate increased savings.
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