BPO Future Forward: 5 Ways to Tackle Tail Spend

Download BPO Future Forward: 5 Ways to Tackle Tail Spend

Post on 30-Jun-2015




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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.


  • 1. THE SOURCING AND PROCUREMENT(S&P) SERIES5 ways to tackletail spendTail spend is often considered a paradox even though it accounts for only 20 percent of totalspend, it still covers 80 percent of suppliers. By tackling tail spend, you can dramatically increasesavings across the enterprise. Here are 5 quick ways to do so.Network with industry leaders at InfosysBPO.com/communityInfosysBPO.com/procurement_strategyFollow us @infosys_bpo#Procurement1. PROJECT: TAIL SPENDASSESSMENT 2. DATA CLEANSING 3. SPEND & PROCESS ANALYTICSDene and evaluate scope, and thenprovide a business case comprisingsavings, investments, and operatingmodels to outsource tailspend managementRoot cause analysis (RCA), processfailure modes and eects analysis(PFMEA), and value stream mappingcombined with procure-to-pay toolshelp in identifying preventive controls,which ensure an error-proof processClassifying and improving dataquality leads to greater spendvisibility, which when aided byanalytical capabilities helps in makinginformed business decisions4. PROCESS HARMONIZATIONA good tail spend managementprocess should remove non-valueadded steps, deploy relevantprocurement applications, and aid inprioritizing sourcing plans andidentifying sourcing strategies5. SOURCING STRATEGYFRAMEWORKMap all sub-categories to supplyexposure and business risk parameters,dened across four quadrants strategic security, strategic critical,tactical acquisition, and tactical prot