The prevailing approach to tail spend – the bottom 20% of third party spend – is to triage it. That is to put in place a small team acting as a sourcing or help desk to gather three quotes or similar from a bunch of suppliers, and then advise the internal requistioner of the outcome. They then choose to either buy from the cheapest supplier or not.
An emerging trend is for third party suppliers / outsourcing businesses, often with off-shore low cost labour, to replicate this on the organisations behalf for a fee and perhaps a share in the savings. However, outsourcing is not without it’s challenges, not least of which is the alignment of strategy and objectives, as well as who benefits. Of course, this then perpetuates the extra cost layer managing this spend indefinitely.
This is hardly ground breaking, nor a great leap forward in dealing with a significant area of unmanaged spend. To see what Ed suggests download the white paper.
Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.