Top 3 Procurement Categories Bleeding Value in Tail Spend — And How to Fix Them

Procurement teams know tail spend is costly, but few realize just where the leaks are happening. While unmanaged tail spend can appear across dozens of indirect categories, research consistently shows that three categories account for a disproportionate share of the waste: office supplies, facilities maintenance, and marketing services.

The Hackett Group’s 2025 Tail Spend Management Study highlights the opportunity: companies currently achieve 7–10% savings on tail spend, but leaders believe 16–20% is possible. Unlocking those extra points of value starts by tackling the categories where leakage is highest.

Top Procurement Categories Most Impacted by Tail Spend Leakage

Tail spend often spreads across hundreds of suppliers, but certain categories are particularly vulnerable because they:

• Are purchased frequently in small amounts
• Lack strategic oversight
• Involve many stakeholders across the organization

The top three categories bleeding procurement value are:

• Office Supplies
• Facilities Maintenance
• Marketing Services

For a primer on how tail spend differs from tactical or maverick spend, see our guide on Tail vs. Tactical vs. Maverick Spend.

Why Office Supplies Are a Major Tail Spend Procurement Challenge

Why does this category leak value?

• Purchases are decentralized; any department can order items independently.
• P-cards and marketplaces make buying easy but reduce procurement visibility.
• Suppliers are fragmented, reducing leverage for volume discounts.

Impact on procurement performance:

• McKinsey notes that decentralized categories like office supplies often show 10–15% price variance for identical items.
• Administrative overhead frequently exceeds the value of the items purchased.

Procurement solution:

• Channel requests through approved suppliers using guided intake (Merlin Intake).
• Use autonomous negotiation agents to consolidate requisitions and secure better pricing (Autonomous Negotiation Agent).
• Standardize catalogs to eliminate unnecessary variance.

Facilities Maintenance: A Tail Spend Category Driving Procurement Budget Overruns

Why does this category leak value?

• Spend is often reactive (emergency repairs bypass sourcing policies).
• Local suppliers dominate, creating inconsistent pricing.
• Scattered data makes it difficult to track total costs across sites.

Impact on procurement performance:

• Hackett identifies facilities as one of the most frequently unmanaged categories.
• Bain reports unmanaged service spend can inflate total cost by 15–20%.

Procurement solution:

• Consolidate vendors regionally to improve leverage.
• Deploy AI negotiation agents to handle repeat service contracts at scale.
• Standardize SLAs and route them through guided intake workflows.

Marketing Services in Procurement: Why Tail Spend Governance Fails Here

Why does this category leak value?

• Stakeholders bypass procurement, viewing marketing as strategic.
• One-off campaigns result in one-off suppliers.
• Lack of benchmarks makes pricing opaque.

Impact on procurement performance:

• Gartner highlights marketing as one of the top categories for overspend due to weak procurement governance.
• Hackett confirms it’s among the most dissatisfying tail categories for leaders.

Procurement solution:

• Use AI to consolidate project-based requests into packages.
• Build a preferred pool of agencies and direct spend through them.
• Apply spend analytics to benchmark campaign costs (Analytics Solutions).

Which Tail Spend Categories Should Procurement Leaders Prioritize First?

Leaders often ask: “Where should we start fixing tail spend?”
The best starting points are categories with:

• High transaction volume (office supplies)
• Supplier fragmentation (facilities)
• Stakeholder dissatisfaction (marketing)

Focusing here provides quick wins that prove ROI before moving into more complex categories like temporary labor or IT services.

Procurement Challenges When Managing Tail Spend Categories

Even with modern AI-driven orchestration, procurement leaders will face:

• Change resistance from employees used to free buying.
• Poor data quality on suppliers and transactions.
• Supplier pushback against standardized terms.
• Governance alignment when embedding ESG or compliance rules.

Deloitte stresses that successful tail spend management requires “a balance of automation, governance, and human engagement.”

How Procurement Teams Can Drive Vendor Participation in Tail Spend Programs

A common barrier is weak supplier adoption. To overcome it, procurement teams should:

• Communicate benefits (faster payments, transparent negotiations).
• Offer incentives (preferred supplier status, early-payment discounts).
• Allow flexibility (escalation to humans for exceptions).
• Simplify onboarding with templates and guided portals.

Bain research confirms that hybrid AI+human models improve supplier satisfaction and adoption.

Tail Spend Procurement Trends by Region (US, Europe, APAC, LATAM)

• North America: Heavy P-card use created blind spots; AI intake restores control.
• Europe: ESG and VAT requirements make unmanaged categories riskier.
• APAC: High transaction volumes create the biggest automation ROI.
• LATAM: Supplier diversity complicates governance, especially in services.

Key Takeaways for Procurement Leaders

• Top 3 categories bleeding value: Office supplies, facilities maintenance, marketing services.
• Savings potential: Move from 7–10% captured today to 16–20% achievable (Hackett 2025).
• Challenges: Employee resistance, poor data, supplier pushback, compliance alignment.
• Solutions: Guided intake, AI negotiation, analytics, and supplier engagement.
• Regional focus: Tailor strategies to local compliance and supplier realities.

Next Steps

Download The Hackett Group 2025 Tail Spend Management Study for category benchmarks.

Related Reads:

1. 5 Key Benefits of Automating Tail Spend Management
2. From Chaos to Control: How Agentic AI Is Rewriting the Rules of Tail Spend
3. Podcast: From Neglected to Negotiated: How Agents Captures More than $50M in Tail Spend
4. A Comprehensive Guide to Spend Management
5. Agentic AI for Procurement Tail Spend Management
6. The Silent 20%: Why Tail Spend Is Procurement’s Hidden Goldmine