The Procurement Glossary » Spend Under Management (SUM)
Spend Under Management (SUM)
Spend & Analytics
Also known as: SUM
Definition
The proportion of addressable spend that is actively managed by procurement through contracts, sourcing and controls.
Explanation
SUM is a headline maturity metric: higher SUM means more spend is on-contract, competitively sourced and controlled, and less is leaking as maverick spend. Raising it is a core objective of procurement transformation.
Example
Bringing tail spend on-contract lifts spend under management from 62% to 80%.
Related terms
- Addressable Spend — The portion of total spend that procurement can realistically influence or manage.
- Maverick Spend — Purchasing done outside agreed processes, contracts or preferred suppliers — 'off-contract' buying.
- Tail Spend — The large number of low-value transactions and suppliers that together make up a small share of total spend but a big share of effort.
- Contract Compliance — The extent to which actual buying follows the prices, terms and preferred suppliers set in contracts.
Related concepts
- Spend Analytics — Turning raw procurement transaction data into a clear, categorised picture of what an organisation buys, from whom, and where the savings are.
- Tail Spend Management — Bringing the long tail of small, fragmented, low-value purchases under control through visibility, consolidation and catalog-driven self-service.
Frequently Asked Questions
What is Spend Under Management (SUM)?
The proportion of addressable spend that is actively managed by procurement through contracts, sourcing and controls. SUM is a headline maturity metric: higher SUM means more spend is on-contract, competitively sourced and controlled, and less is leaking as maverick spend. Raising it is a core objective of procurement transformation.
Can you give an example of Spend Under Management (SUM)?
Bringing tail spend on-contract lifts spend under management from 62% to 80%.
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