At Fairmarkit we define tail spend as spend that is not strategically managed and typically under $100K per purchase. Smart companies are beginning to look for ways to change the tail spend dynamic, recognizing they would never settle for products that are 80% effective, 80% customer satisfaction, or a work force that was only 80% trained.
Tail spend is not inconsequential. It makes up 20% of the average company’s overall annual procurement spend. Also, because tail spend comprises hundreds if not thousands of small-spend purchases and is generally not automated, tail spend is an inefficient, high-touch nightmare as it involves some level of interaction with 80% of all vendors.
Today, most tail spend processes are not automated and because tail spend is made up of low-cost, non-recurring items, it has not been a strategic management priority. Despite the fact that it accounts for 20% of overall annual procurement spend. This make it an outlay of millions of dollars every year - virtually unmanaged. Because companies lack visibility into their annual tail spend expenditures they are unable to control it. It is a cash-sapping, administrative nightmare for businesses, large and small.
Fairmarkit’s SaaS platform is tail spend centric, allowing business to strategically manage their tail spend. It automates visibility into, and control of tail spend by streamlining and simplifying processes. Additionally, by using machine learning it increases procurement control, yielding greater efficiencies, and drives savings of 7-12%.