Procurement outsourcing for tail spend: what to outsource and what to keep

In short: Procurement outsourcing for tail spend means an external partner takes over the buying of small, non-strategic goods and services: sourcing, ordering, delivery follow-up, supplier invoices and payment. Your procurement team keeps strategy, contracts and strategic suppliers. The best results come when the partner also acts as the single creditor, so the tail disappears from your ERP and accounts payable as well as from your buyers' workload.

Why tail spend is a good candidate for outsourcing

Tail spend is the large group of small purchases outside your main contracts: spot buys, one-off services, C-items and web shop orders. It represents a small share of total spend but most of your suppliers, purchase requests and invoices. Every request takes about the same effort as a large order: finding a supplier, asking for a quote, creating the vendor, following up delivery and checking the invoice.

That work rarely creates value for a procurement team. It takes time away from category strategy, negotiations and supplier relationships, while internal customers still wait too long for what they need.

What you can outsource

• Sourcing and quotes: finding suppliers for one-off requests, comparing offers and asking for quotes (RFQs).
• Purchase request administration: turning requests into complete purchase orders that follow your approval rules.
• Ordering and follow-up: placing orders, following up delivery and handling issues with the supplier.
• Supplier creation, invoicing and payment: onboarding and checking the supplier, receiving and matching the invoice, and paying the supplier.

What you should keep in-house

• procurement strategy and category plans;
• contracts and negotiations with strategic suppliers;
• approval rules, budgets and policies;
• decisions on what is bought and by whom.

Outsourcing the tail does not mean losing control. Your approval rules still apply and every order carries your own PO number.

Three ways to set it up

You do not have to outsource everything at once. With Spot Buy Center you choose per category or business unit:

• Self-service: your team does the sourcing and request administration; Spot Buy Center handles supplier creation, invoicing and payment as your single creditor.
• Admin service: Spot Buy Center also handles the request administration and delivery follow-up.
• Full service: Spot Buy Center takes care of everything from sourcing to payment.

Tail catalogues for recurring items are included in every plan.

How it differs from a classic procurement BPO

A classic business process outsourcing contract takes over a whole procurement process, usually with a dedicated team working in your systems. Tail spend outsourcing is narrower and more practical: it focuses on the small, varied purchases, and the partner buys in its own name. Because Spot Buy Center acts as the single creditor, the suppliers never enter your ERP. You receive one digital invoice per purchase order, through Peppol or another channel you choose, and pay one creditor on your own payment terms.

What changes for your teams

• Procurement: more time for strategic suppliers and categories, fewer small requests in the inbox.
• Finance and accounts payable: one creditor instead of hundreds of small suppliers, and fewer invoices to process.
• Internal customers: one way of ordering anything, from any supplier, with faster answers.

How to start

1. Analyse 12 months of purchase orders and invoices to see which categories and suppliers make up the tail.
2. Choose the categories or business units to start with.
3. Pick the service level per category: Self-service, Admin service or Full service.
4. Agree the approval rules and the invoice channel.
5. Start with new purchases and move existing small suppliers over step by step.

Frequently asked questions

Do we lose control over what is bought?

No. Your approval rules and budgets apply, and nothing is ordered without an approved purchase order with your PO number.

Can we outsource only part of the process?

Yes. You can start with Self-service, where you keep the sourcing and only outsource supplier creation, invoicing and payment.

Which categories are suitable?

Any non-strategic goods or services outside your main contracts, such as tools, equipment, services, events, IT accessories, spare parts and one-off requests.

Read more about procurement outsourcing for tail spend, compare the service plans or talk to us about your tail spend.