The Procurement Glossary » Tail Spend Management
Tail Spend Management
Spend & Analytics
Definition
The practice of bringing the fragmented, low-value 'tail' of spend under control to cut cost and effort.
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Explanation
Tail-spend management uses catalogs, marketplaces, guided buying, P-cards and supplier consolidation to make the many small buys efficient and compliant — capturing savings that individually look trivial but collectively are large.
Example
A guided marketplace channels the tail into a few catalog suppliers, cutting off-contract spend and processing cost.
Related terms
- 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.
- Spend Under Management (SUM) — The proportion of addressable spend that is actively managed by procurement through contracts, sourcing and controls.
- Supplier Consolidation — Reducing the number of suppliers in a category by concentrating spend with fewer, better-managed vendors.
- Guided Buying — A buying experience that steers users to compliant, preferred choices with a simple, consumer-like interface.
Related concepts
- Tail Spend Management — Bringing the long tail of small, fragmented, low-value purchases under control through visibility, consolidation and catalog-driven self-service.
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Frequently Asked Questions
What is Tail Spend Management?
The practice of bringing the fragmented, low-value 'tail' of spend under control to cut cost and effort. Tail-spend management uses catalogs, marketplaces, guided buying, P-cards and supplier consolidation to make the many small buys efficient and compliant — capturing savings that individually look trivial but collectively are large.
Can you give an example of Tail Spend Management?
A guided marketplace channels the tail into a few catalog suppliers, cutting off-contract spend and processing cost.
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