In this article, we turn our attention to a white paper from Infosys BPO called “The long and short of managing tail spend”, by Deepa M.K.
The paper opens with a comprehensive definition of tail spend and a few reasons why it is necessary to manage it. A discussion of the challenges faced by many organizations when it comes to implementing better ways to manage tail spend follows. Most of these points and themes have been mentioned in previous articles in this series, so we will not be spending too much time there.
What makes this paper especially interesting is that it does not only identify the problem and stress the need to better manage tail spend, but it also discusses some concrete ways to gain control of tail spend.
One of the suggestions is a Tail Spend Assessment Project (usually lasting 3 to 6 months), consisting of 5 main task areas:
Also included is a comprehensive 10-step process to help businesses manage tail spend better going forward, and a discussion about the many benefits experienced by companies that have implemented programs to better manage tail spend within their organizations.
Some of the key benefits highlighted are:
- A positive Return on Investment (ROI)
- Reduction in unmanaged or “maverick” spend and a corresponding increase in contracted spend
- More standardization of procurement processes across all business units and strengthening of internal procurement controls
- Easier detection of fraudulent transactions
- A reduction in the total number of transactions and overall transaction costs
- Reduced total cost of the procurement function
Overall, this white paper stresses that companies should commit themselves to finding ways to manage tail spend better, and that this should be a top priority. It is also obvious from the material presented (including case studies) that having a logical plan and deploying useful technology, e.g. mobile apps that help employees/departments manage tail spend in their own operations, are keys to successful tail spend management.
If you are looking for a simple, no-fuss way to better manage tail spend in your organization, the PocketBuyer™ app from Simfoni is the ideal starting point.