When procurement managers hear the term non-core spend, it often brings to mind overlooked purchases that eat up time and quietly inflate costs. These are the small, unpredictable transactions that typically don’t fall under central contracts or formal sourcing strategies. While they may seem minor, their impact is anything but. When left unmanaged, these expenses can drain budgets, slow down operations, and lead to broader supply chain issues.
Improving procurement performance starts with understanding where non-core spend comes from and why it tends to escape oversight. Once businesses recognize these patterns, they can begin to implement specific steps that introduce structure and offer better control over an area often treated as an afterthought.
What Is Non-Core Spend
Non-core spend refers to purchases made outside of an organization’s strategic procurement activities. These could be one-time buys, departmental spot purchases, or orders handled without involvement from the procurement team. Examples include office supplies ordered directly by departments, emergency replacement parts, or promotional items purchased last minute from unfamiliar vendors. Often, these transactions avoid the usual sourcing process and are not part of negotiated contracts.
This category of spend is also known as indirect or unmanaged spend. Frequently, the suppliers involved are not properly onboarded or continuously evaluated. Because these purchases often fall outside procurement’s oversight, businesses miss out on cost-saving measures like bulk discounts, pre-negotiated terms, or preferred vendor agreements. Over time, this lack of structure can lead to inconsistent supplier performance and inflated costs.
What makes this spend category hard to pin down is the way it sneaks through internal systems. Employees might use p-cards or make purchases on personal credit cards, then submit expenses later without a centralized audit trail. In other cases, different teams may buy the same products from different suppliers without knowing it. This decentralized approach leads to inefficiencies, drives up costs, and creates unnecessary administrative burdens.
Challenges of Managing Non-Core Spend
Pretending non-core spend isn’t a problem doesn’t make it disappear. On the contrary, when it’s left unaddressed, it hinders procurement progress and operational efficiency. Businesses striving for strategic procurement excellence often find that this unmanaged spend drags them backward. Here are some of the key challenges associated with it:
1. Lack of visibility: These purchases are typically carried out manually or in isolation by different departments, which means procurement teams often don’t have clear data on where money is going. Without strong analytics, it’s impossible to identify improvement areas.
2. Uncontrolled supplier base: Too many teams ordering from their own vendors leads to a bloated supplier list. This complicates contract management, audits, negotiation efforts, and supplier performance evaluations.
3. No procurement process involved: Spot buys tend to bypass essential procurement steps such as approving budgets, competitive bidding, or supplier vetting. This hands-off approach increases risk and reduces accountability.
4. Disruptions from unreliable orders: Because many non-core purchases are time-sensitive, any delays or errors from the supplier can cause real operational disruptions. When items are incorrect or late, they impact service delivery and output.
5. Overspending from duplicated or low-value transactions: One small purchase might not affect the bottom line. But multiply similar orders across the business for a year, and it becomes clear how repetitive spend chips away at budgets.
These issues do more than just frustrate finance teams. They strain internal resources, affect supplier communication, and leave procurement professionals tangled in small but frequent fire drills instead of focusing on high-impact strategic goals.
Strategies for Effective Non-Core Spend Management
Gaining control of non-core spend means applying both smart practices and the right tools. Below are methods that companies can adopt right away to start making meaningful changes.
1. Implement spend analysis
The foundation of spend management starts with good data. Organizations should analyze historical purchases to identify patterns, redundant vendors, and high-frequency but low-value orders. Clear categorization helps pinpoint inefficiencies and opportunities for improvement. With accurate analyses, procurement leaders can make informed choices rooted in real spending behavior rather than guesswork.
2. Supplier consolidation
When too many vendors are used for the same type of product, processes become cluttered and negotiations lose leverage. By identifying core categories and focusing on a select group of trusted vendors, businesses can gain more control, improve consistency, and secure better terms. Supplier consolidation also reduces administrative work, with fewer contracts to manage and performance metrics to oversee.
3. Automate procurement
Manual procurement is not only time-consuming, it’s error-prone. Switching to automated workflows for approvals, budgeting, and ordering streamlines the entire process. Automated systems bring structure to spot buys, ensuring purchases are reviewed, approved, and tracked efficiently. With controls built in, employees are more likely to follow proper procedures, and teams have full visibility into spending without chasing paperwork.
Tail Spend Management Platforms
Investing in a digital platform dedicated to managing tail spend can make a substantial difference in how organizations track and control non-core purchasing. Tools like CollectiveSpend are specifically built to bring structure to this historically scattered area of procurement.
These platforms offer features that include automated workflows, centralized vendor engagement, dynamic reporting dashboards, and smart recommendation engines. By giving procurement leaders complete visibility into indirect purchases across departments, the guesswork is removed from decision-making. Real-time analytics highlight trends and outliers, allowing procurement teams to take proactive steps before problems spiral.
More importantly, these platforms also ensure compliance across the organization. Built-in approval chains, preferred vendor directories, and standardized ordering processes reduce maverick behavior. The outcome is reduced waste, stronger supplier relationships, and a more agile procurement function that can scale as the business grows.
Moving Towards Efficient Procurement
Putting controls in place for non-core spend creates ripple effects across the entire business. The most immediate benefit is reduced costs, stemming from the elimination of unnecessary purchases and the ability to negotiate better vendor pricing. Uniform processes also reduce redundancy, leading to greater process efficiency and time savings.
Supplier relationships benefit as well. With proper onboarding, regular monitoring, and clear expectations, vendors are more likely to meet performance standards consistently. And with central data in hand, procurement teams can work strategically with suppliers to explore cost-saving or innovation opportunities.
Improved visibility into purchasing behaviors allows departments to make smarter, data-driven decisions. It brings predictability to spend patterns and improves budgeting accuracy. Procurement professionals can then redirect their focus to large-scale projects, category management, or sustainability initiatives that deliver even greater organizational value.
Organizations that master non-core spend management position themselves to be leaner, more responsive, and better able to weather economic shifts. A well-defined tail spend strategy is not just a cost-saving function; it becomes a competitive advantage.
Ready to take control of those overlooked purchases and streamline operations? Discover how CollectiveSpend’s tailored solutions tackle tail spend effectively. Let us help convert these small transactions into big gains for your business. Learn more about how our tail spend approach can bridge the gap in your procurement strategy.