I just read a post by James Meads on Maverick Spend. Here is the full post:
Maverick spend costs organizations millions of dollars in lost savings.
But it’s a problem that can be tamed.
It’s not easy, but it’s certainly possible. With some tech, you can break down the problem and reduce the chances of it occurring.
6 common types of maverick spend:
1️⃣ Non-registered suppliers
2️⃣ Non-compliant purchases
3️⃣ Off-contract purchases
4️⃣ Urgent / emergency orders
5️⃣ Non-standard payment terms
6️⃣ Unauthorised budget overruns
5 key reasons it occurs:
1️⃣ Decentralisation / lack of mandate
2️⃣ Weak purchasing controls
3️⃣ Poor standardisation
4️⃣ High % of indirect spend (which typically has a longer tail)
5️⃣ Business type-related constraints
6 ways that technology that can help to combat it:
1️⃣ Better UX at the point of intake
2️⃣ AI-driven sourcing and negotiation for non-complex items
3️⃣ Harmonised process and interface across all BUs
4️⃣ Process mining to discover hotbeds of non-compliance
5️⃣ Leverage Vendor Lifecycle Management (VLM) software to reduce contract leakage
6️⃣ Use niche category specific software for tricky areas of spend
Full article here: https://lnkd.in/eyHhv_Tx
For those of you following this blog for the past decades, you already know my response, but here it is if you are new to Procurement Insights:
I don’t want you to take offense, James Meads, but I have been covering “Maverick Spend” for the past 30 years, and here is an excerpt from just one of the dozens of posts, white papers, and classroom lectures I have given – https://bit.ly/45yYk5c
💡 In 2013 I wrote the following: “Maverick spend, which I contend is an “artificially created problem that was the unintended consequence of poorly designed ERP procurement platforms” that limited supplier engagement, reflected the fact that buyers were being forced to go against what they knew from experience was a better route to achieving savings.”
Case Studies, such as the one with a major electronics chain in the US, suggest that off-contract buying can save you a considerable amount of money, depending on the products you buy.
Hint: Tail Spend, particularly Indirect MRO Materials, benefits from a Maverick Mindset. 💡
Believe it or not—and this is based on real-world experience and numbers—and numbers do not lie—leveraging technology to “battle” maverick spending rather than using it to embrace it is like throwing gas on a fire.
STOP throwing gas on a fire and strategically embrace it instead of battling Marverick Spend!
30
Procurement Insights
When it comes to Maverick Spend should you eradicate or embrace it?
Posted on May 13, 2025
0
I just read a post by James Meads on Maverick Spend. Here is the full post:
Maverick spend costs organizations millions of dollars in lost savings.
But it’s a problem that can be tamed.
It’s not easy, but it’s certainly possible. With some tech, you can break down the problem and reduce the chances of it occurring.
6 common types of maverick spend:
1️⃣ Non-registered suppliers
2️⃣ Non-compliant purchases
3️⃣ Off-contract purchases
4️⃣ Urgent / emergency orders
5️⃣ Non-standard payment terms
6️⃣ Unauthorised budget overruns
5 key reasons it occurs:
1️⃣ Decentralisation / lack of mandate
2️⃣ Weak purchasing controls
3️⃣ Poor standardisation
4️⃣ High % of indirect spend (which typically has a longer tail)
5️⃣ Business type-related constraints
6 ways that technology that can help to combat it:
1️⃣ Better UX at the point of intake
2️⃣ AI-driven sourcing and negotiation for non-complex items
3️⃣ Harmonised process and interface across all BUs
4️⃣ Process mining to discover hotbeds of non-compliance
5️⃣ Leverage Vendor Lifecycle Management (VLM) software to reduce contract leakage
6️⃣ Use niche category specific software for tricky areas of spend
Full article here: https://lnkd.in/eyHhv_Tx
For those of you following this blog for the past decades, you already know my response, but here it is if you are new to Procurement Insights:
I don’t want you to take offense, James Meads, but I have been covering “Maverick Spend” for the past 30 years, and here is an excerpt from just one of the dozens of posts, white papers, and classroom lectures I have given – https://bit.ly/45yYk5c
💡 In 2013 I wrote the following: “Maverick spend, which I contend is an “artificially created problem that was the unintended consequence of poorly designed ERP procurement platforms” that limited supplier engagement, reflected the fact that buyers were being forced to go against what they knew from experience was a better route to achieving savings.”
Case Studies, such as the one with a major electronics chain in the US, suggest that off-contract buying can save you a considerable amount of money, depending on the products you buy.
Hint: Tail Spend, particularly Indirect MRO Materials, benefits from a Maverick Mindset. 💡
Believe it or not—and this is based on real-world experience and numbers—and numbers do not lie—leveraging technology to “battle” maverick spending rather than using it to embrace it is like throwing gas on a fire.
STOP throwing gas on a fire and strategically embrace it instead of battling Marverick Spend!
30
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