Tail spend is used when organisations analyse expenditure, such as their business travel spend, within their supply and procurement departments.

Based upon the Pareto Principle – commonly referred to as the 80/20 rule. The theory states that for numerous events approximately 80% of the effects come from 20% of the causes, for example 80% of your suppliers will account for 20% of your total spend.

The 20% of total spend is what is known as the tail spend, which allows companies to focus on how to optimise their supply and procurement departments to achieve process and cost benefits.

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