CASE STUDY
Turning Tail Spend Into Real Savings: A SpendIntel Client Story
Published on:
3 min read
Unlocking Savings: SpendIntel Transforms Tail Spend Management for Multi-Billion Dollar Client
One of SpendIntel’s clients holds a strong market position in the United States as a leading telecommunication and peripheral services provider. Through its services, the company generates millions of dollars in revenue every day and serves both individual and organizational customers.
SpendIntel collaborated with the client to address its tail spend challenges, focusing on identifying and capturing potential savings that were often overlooked due to lower individual transaction values. By zooming into the tail spend, SpendIntel aimed to deliver actionable insights and recommendations to effectively manage costs, supplier relationships, and compliance.
What is Tail Spend?
Tail spend refers to the large volume of procurement transactions that, while individually small, collectively add up to a significant amount. These purchases typically fall into the bottom 20% of total expenditure and involve numerous small-scale supplier transactions.
Tail spend management involves identifying and optimizing these transactions to improve efficiency, reduce costs, and mitigate risk. Through effective tail spend management, organizations can unlock potential savings and enhance overall procurement performance by gaining better visibility into spending and implementing strategies such as supplier consolidation and process standardization.
The Challenge: Increasing Visibility Into Tail Spend
SpendIntel began by identifying the key areas that represented a significant portion of the client’s procurement spending. Findings revealed that the lower transaction values within tail spend often led to overlooked savings. Based on these findings, the following areas of improvement were identified:
- Risks of unmanaged tail spend
- Loss of cost saving opportunities
- Lack of product quality control
- Loss of productivity due to avoidable transactions
- Potential compliance issues, especially in regulated industries
SpendIntel proposed building a tail spend management portal into the client’s existing spend analytics solution, creating a single tool to make tail spend management efficient and manageable.
SpendIntel's Solution to the Challenge
SpendIntel implemented a tail spend management program for the client with the following features:
Supplier Bucketization
Suppliers were classified into quadrants, with each quadrant assigned suggested actions to support strategic, data-driven decision-making.
Category Data Integration
SpendIntel incorporated UNSPSC concepts into the system, helping the client’s management team classify products and services for enhanced spend analysis and procurement optimization.
Page Flow
An intuitive user interface with filters, scatterplots, and decomposition trees became a key part of the overall user experience, enabling users to conduct detailed supplier and category analysis.
Secondary Tab: By Category
SpendIntel also added tabular views with layouts focused on category level analysis, allowing users to view data without navigating between screens. This resulted in:
- Identifying consolidation opportunities
- Improving overall work efficiency
Results of the SpendIntel Solution
With the successful rollout of the new tail spend management program, the client’s team saw significant benefits. Enhanced visibility into supplier characteristics and product categories helped generate intelligent, data-backed recommendations.
Key Results:
- The client saved between $46 million and $88 million over 18 months
- Increased savings of 10 to 20% in the initial implementation phase, with an additional 2 to 5% annually
- 20% increase in productivity through supplier base consolidation and process optimization
Improved compliance also led to substantially stronger risk management through more transparent procurement processes.
SpendIntel’s Tail Spend Analytics solution offers a strategic advantage by providing actionable insights, optimizing procurement processes, and driving significant cost savings. With enhanced visibility and intelligent recommendations, clients can effectively manage their tail spend, mitigate risk, and operate with greater efficiency.
About SpendIntel
SpendIntel is an AI powered procurement intelligence platform under The Phoenix Group, built to give organizations complete visibility and control over their spend. From identifying hidden savings in tail spend to enabling smarter supplier decisions, SpendIntel turns raw procurement data into clear, actionable insight.
Want results like these for your organization? Reach out to SpendIntel today.
