Indirect and related spend is big money, accounting for 15–30 percent of revenues for most companies, spanning everything from marketing services to logistics, to IT to travel and capital equipment.
Despite the large numbers, most firms do not manage their indirect spend professionally. In fact, our benchmark data shows that the average firm professionally manages less than 50 percent of spend, falling far short of best-in-class organizations that manage addressable spend at 90 percent or more.
This paper explores five areas where large amounts of waste often occur and their causes. Understanding the waste problem can enable companies to take steps to reclaim the margin point or more of bottom-line value that is wasting away.