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Tail Spend Management

What is Tail Spend?

Management of your lower value purchases which could have a significant volume of your total number of purchases..

  1. Classic 80:20 rule: where 80% of what the procurement team works on is just about to manage 20% of the purchases in terms of spend.
  2. Small value items in various diverse categories.
  3. Items where the dollar value is not very high, but which take as much time and effort to manage as strategic high-value purchases.

Benefits:

  • Your procurement team is freed up to do what it does best- manage strategic sales,
  • Consolidation and reduction of number of supplier,
  • Lower supplier management cost,
  • Get advantage of Tier 1 diversity spend for all the purchases in the tail despite the original supplier not being a diverse supplier,
  • Consolidation of payment dates and terms possible,
  • Get Benefit of volume discounts which we get as a result of bulk purchasing and being strategic partners with many OEMs and software companies,
  • Timely processing of POs,
  • Cash or Service Rebates,
  • Since we have not only expertise in software reselling, but also software implementation, LSI could be a one-stop solution for purchase and installation/ integration of software you purchase through us,
  • Consolidation of licenses purchased at different locations/ departments/ Business Units,
  • Co-terming of licenses which expire on different dates,
  • Detailed reporting monthly, quarterly, annual basis,
  • Possibility of extending your payment terms from a 30-day or a 60-day term to a 90-day term,
  • Timely alerts and management of renewals.

Tail Spend Management Services:

  • Management of lower value items in various categories which typically form 80% of total purchases.
  • Consolidation of suppliers.
  • Advantage of diversity spend even if vendor is not a diverse supplier.
  • Benefit of bulk discounts since we buy in large quantities.
  • Timely POs, detailed monthly, quarterly, annual reports.
  • Consolidation and co-terming of licenses.
  • Possibility of increasing payment terms from 30 to 90 days.