bpo future forward: 5 ways to tackle tail spend
DESCRIPTION
Despite being behind the limelight, tail spend or low-value spend remains a neglected area of overall spend management strategy in many enterprises. With increasing pressures on cost reduction and sustained savings, it is crucial that enterprises take notice of their tail spend. Here are five ways to take charge of tail spend.TRANSCRIPT
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5 ways to tackletail spend
THE SOURCING AND PROCUREMENT (S&P) SERIES
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Tail spend is often considered a paradox – even though it accounts for only 20 percent of total spend, it still covers 80
percent of suppliers. By tackling tail spend, you can dramatically increase savings across the enterprise. Here are
5 quick ways to do so.
5 ways to tackle tail spend
THE SOURCING AND PROCUREMENT (S&P) SERIES
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1
De�ne and evaluate scope, and then
provide a business case comprising
savings, investments, and operating
models to outsource tail spend
management
2
Classifying and improving data quality leads to greater spend
visibility, which when aided by
analytical capabilities helps in
making informed business decisions
PROJECT: TAIL SPENDASSESSMENT DATA CLEANSING
5 ways to tackle tail spend
THE SOURCING AND PROCUREMENT (S&P) SERIES
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3Root cause analysis
(RCA), process failure modes and e�ects analysis (PFMEA), and value stream
mapping combined with procure-to-pay
tools help in identifying
preventive controls, which ensure an
error-proof process
4A good tail spend
management process should
remove non-value added steps, deploy
relevant procurement
applications, and aid in prioritizing
sourcing plans and identifying sourcing
strategies
SPEND & PROCESSANALYTICS
PROCESSHARMONIZATION
5 ways to tackle tail spend
THE SOURCING AND PROCUREMENT (S&P) SERIES
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5 ways to tackle tail spend
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5Map all
sub-categories to supply exposure and
business risk parameters, de�ned
across four quadrants – strategic
security, strategic critical, tactical
acquisition, and tactical pro�t
SOURCING STRATEGYFRAMEWORK
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5 ways to tackle tail spend
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