Tail Spend Management

What is tail spend and how should it be automated?

Tail spend refers to the money an organization spends on high-volume, low-value transactions. In most organizations, tail spend accounts for roughly 80% of transactions made—but only 20% of total spend volume. (An example: someone on the marketing team needs to buy $10,000 worth of “swag” using a diverse supplier.)

• Most procurement teams are absolutely flooded with these kinds of low-value tail-spend requests. But processes designed to triage and manage tail-spend requests are often neglected; typically, procurement teams are left to manage and track them totally manually.
• This has the unintended effect of making processes for submitting tail-end purchase requests hard to follow. So employees do it their own, unstructured way—making it difficult for procurement teams to control spend and mitigate risk, because they don't know how much money is being spent, where it’s being spent, or with which suppliers.
• As a result, within procurement, tail spend becomes a vector of not only inefficiency—pulling procurement teams away from potentially higher value work, such as negotiating larger deals—but human error, risk, and waste.

With an intelligent process experience and automation, procurement teams can take back control over tail spend.

Tonkean makes it easy for anyone to create personalized internal software solutions that can automatically intake, triage, coordinate, standardize, and track responses to unstructured inbound requests—such as those related to tail spend. (With Tonkean, you can also publish clear guidelines pertaining to approved credit card limits, policy thresholds, and instructions for submitting large bids.)

With Tonkean, procurement teams can:

• Provide a guided buying experience for employees that is easy to access and follow and that will meet employees where they are, across technology environments
• Automatically triage and route every inbound request. (Tonkean uses Natural Language Processing (NLP) to automatically read a request and send the right response - or send it to the right person.)
• Surface and reinforce clear policy guidelines via the procurement portal
• Personalize and manage the automations facilitating the long-tail buying experience on their own, because Tonkean's interface is 100% no-code.
• Gain visibility across all requests and tasks, because Tonkean funnels purchase requests and status updates into one centralized procurement portal.

In practice, this results in far more visibility, greater process control, end-to-end standardization, lower risk, improved supplier relations, and immense savings of cost and time—allowing procurement teams to focus more energy on high-value work, such as negotiating large contracts with important vendors.