E&I Members: How likely are you to recommend E&I Cooperative Services to a peer?
There’s only so much time in the day and a long list of things to get done. Procurement teams spend their time on the areas that have the biggest return: major contracts, strategic sourcing initiatives, and high-spend categories. The challenge is this often results in a significant amount of spending from thousands of smaller purchases occurring across campus that don’t get the same level of scrutiny.
Tail spend and maverick spend are typically lower-dollar purchases, but they can add up fast.
Tail spend is the large number of low-value purchases that occur outside your primary spending categories and are often spread across departments, making them harder to track, and managing efficiently is a challenge. Every purchase order, supplier setup, invoice, and payment carries processing costs.
When institutions work with large numbers of low-volume suppliers, those administrative costs can quickly add up. Procurement and AP teams may spend significant time processing transactions that provide little opportunity for meaningful savings or supplier leverage.
Higher education institutions are especially susceptible to tail spend because of decentralized purchasing environments. While purchases may be legitimate and necessary, the cumulative effect can create a highly fragmented supplier base and miss potential savings opportunities.
Maverick spend is slightly different and occurs when departments, faculty, or staff purchase goods and services without leveraging approved suppliers or existing contracts. Why does this happen? There are several reasons:
When purchases occur outside negotiated contracts, you often miss opportunities for preferred pricing, favorable terms, and supplier incentives. Off-contract purchases can also increase your compliance risks and make it more difficult to accurately track institutional spending.
Over time, tail spending and maverick spending contribute to supplier fragmentation and reduced contract utilization. In turn, this misses significant opportunities to reduce overall costs and the administrative burden of managing procurement.
Every supplier relationship requires oversight and management. As supplier counts grow, so do the number of purchase orders, invoices, payments, and procurement activities required to support them. This creates additional work for procurement and accounts payable teams while increasing overall transaction costs.
When spending is dispersed across numerous suppliers and purchasing channels, you miss opportunities to aggregate demand and maximize contract value. Fragmentation weakens your negotiating power and reduces the impact of strategic sourcing initiatives.
Perhaps the greatest challenge is the lack of visibility these spending patterns create. Without a clear understanding of where spending occurs, procurement teams may struggle to identify savings opportunities or align purchasing activities with broader institutional objectives.
Eliminating all tail spend and maverick spend isn’t realistic, but there are strategies you can put in place that can improve your procurement process. Effective tail spend management gives procurement teams a structured way to consolidate those scattered low-value purchases, reduce supplier sprawl, and recover savings that would otherwise slip through unnoticed.
Improve Spend Visibility | Consolidate Suppliers and Contracts |
Analyze purchasing data across departments and categories Identify fragmented spending patterns Track off-contract purchases Monitor supplier counts and utilization Establish regular spend reviews | Reduce unnecessary supplier duplication Standardize common purchases where appropriate Increase spend under management Direct more spending through approved agreements
|
Make Contracted Purchasing Easier | Use Data to Drive Accountability |
Increase awareness of available contracts Simplify purchasing workflows Improve access to approved suppliers Implement user-friendly purchasing catalogs Support adoption through training and communication | Monitor contract utilization rates Track maverick spending trends Establish procurement performance metrics Share reporting with campus stakeholders Measure progress over time |
With better spend visibility and stronger procurement processes, hidden budget leaks can become opportunities for measurable savings and long-term operational improvement, including reducing maverick spend.
E&I’s exclusive, no-cost Strategic Spend Assessment helps educational institutions identify supplier fragmentation, off-contract spending, contract utilization gaps, and other hidden procurement opportunities. By analyzing your institutional spending, we can help you identify opportunities to:
E&I Cooperative Services is the only nonprofit, member-owned sourcing cooperative that exclusively serves the education sector. Contact your E&I rep to learn more about E&I’s Strategic Spend Assessment.