New survey data from Efficio reveals that a majority of chief procurement officers (CPOs) and chief financial officers (CFOs) say more than one-quarter of their indirect spend has no financial oversight, and less than one-fifth (19%) are “fully confident” that they have an accurate picture of their organization’s indirect spend.
“Too often, indirect spend is the blind spot in corporate budgets, but our research shows that without proper oversight, organisations are losing millions to unmanaged purchases. The good news is that these challenges are solvable. By improving visibility, strengthening procurement capabilities, and creating stronger collaboration between finance and procurement teams, businesses can turn indirect spend from a source of risk into a driver of measurable savings and operational efficiency,” says Simon Whatson, VP at Efficio.
“Organizations are under pressure to control costs and maximise efficiency, yet a surprising amount of indirect spend remains unmanaged. Much of what leaders consider ‘unaddressable’ may actually be controllable if they have greater visibility, structured review processes, and stronger alignment between procurement and finance teams. The challenge often isn’t the spend itself—it’s the lack of insight, governance, and accountability to manage it effectively,” adds Tim von der Decken, VP at Efficio.
Key takeaways:
· Nearly nine in 10 (89%) senior leaders believe that over half of indirect spend is unaddressable, suggesting a widespread perception that most of this expenditure is simply out of reach. Yet the data shows only 19% of senior leaders have an annual review process in place for indirect expenditures, which alone could save an extra 15% of indirect spend wastage.
· 93% of senior leaders acknowledge that indirect spend is – or agree it should be – a board-level issue. Even among the 11% who don’t yet view it as a board issue, a third (4%) say they plan to raise it at that level.
· 85% of leaders ranking skills development as a high priority.
· Four-fifths of respondents (81%) said IT and software was the riskiest department for cost leakage, followed by professional services (68%). A vast majority (93%) of CPOs and CFOs cite “maverick spending” as a major contributor to this leakage.
