17
Apr

Addressing Tail Spend: The First Step

Until recently, tail spend has generally been ignored by large, corporate procurement departments; assuming that it was not worth the time and investment. But it seems that in 2018 it is finally getting its time in the sun. Gartner, Spend Matters, our team at FairMarkIT and others have identified this spend as an issue to be addressed and have also projected that players like Amazon Business will have a large role in addressing the problem. Whether or not your procurement organization is in the position (or even has the desire) to address tail spend it is something that is likely…

22
Feb

The Case for Tail Spend Management

If you check out our blog often, you know that at FairMarkIT we think that tail spend management matters  We feel so strongly about it because our team has been able to help quantify the tail spend problem by reviewing client data sets to help to determine areas of large savings opportunity and high-risk categories, products, and suppliers. We recently ran the numbers on our work with the MBTA and the results we’ve found using our platform are really impressive. Through our collaboration, the MBTA: Increased the number of bids while reducing order prices by 5% to 40%, achieving a…

01
Feb

Supplier Diversity Programs: Doing Well by Doing Good

There is a reason why the smart folks at Coca-Cola, Starbucks, and Harvard have created Supplier Diversity programs, joining their public entity counterparts, which are federally mandated to do so. Supporting local, diverse, and disadvantaged businesses is not only a good thing to do, it also makes a lot of business sense. What is Supplier Diversity? In practice, it means capitalizing on the opportunity to work with a new, growing, and diverse set of suppliers. Companies do this by proactively seeking out business relationships with all types of suppliers: large and small businesses, businesses owned by minority, women, veteran, persons…

06
Dec

Why Tail Spend Matters: My First Nine Months as CEO

As I think back on my first 9 months as FairMarkIT CEO, I am reminded of the idiom “the devil is in the detail.”  But why are we having a ‘tail spend,’ devil is in the detail discussion?  Well let’s start by first defining what ‘tail spend’ is: Considered low priority Individually small dollar value transactions Generally, equates to 20% of your total spend across all categories With those transactions spread across 80% of your supply base The spend is typically unmanaged resulting in challenges with data clarity and integrity Why is ‘tail spend’ important?  Let’s do the math –…

03
Oct

What Is Tail Spend And How Can We Manage It?

Tail spend, a concept that is acknowledged in procurement departments but rarely addressed, is finally getting its time in the spotlight.  Tail spend is software, professional services and business purchases that are outside the typical large, ongoing purchases that organizations make. These purchases are often too small to go through procurement and are not frequent enough to be included in cataloged systems. An easy way to think of it is the 80 percent of suppliers that represent just 20 percent of an organization’s spend, following Pareto's principle. When you boil it down, the most difficult aspect of tail spend management…