A familiar problem...
Whenever we speak to our networks, they tell us the same thing: Services tailspend is skyrocketing.
Budget holders across the business are purchasing increasing amounts of services, from software and supplies to project support & subcontracting.
Typically, services tailspend is decentralised, with much of it being managed locally. This means spend often goes through informal channels without the appropriate oversight, cost, compliance and outcome management.
This causes common problems across every organisation, becoming a perrenial problem that few business have dealt with.
So what is services tailspend and why is it increasing?
What is 'services tailspend'?
The procurement category management approach has wrapped up significant spend & supply to achieve optimum quality, cost, control and compliance through frameworks, managed services and preferred supplier lists.
But there is a remaining portion of transactional tailspend outside these models, often owned by local, operational buyers, which often shares the same characteristics:
Specialised, one-off service requirements, which need to be purchased by local project or operations specialists.
Urgent project requirements requiring fast outcomes.
Smaller value purchasing, which stretched Procurement teams lack capacity or interest to coordinate.
'Workaround' methods of resource engagement where Statement of Work (SoW) and consultancy agreements replace traditional routes, like permanent and contractor recruitment processes.
