Maverick spending, also known as rogue or off-contract spending, is a silent drain on procurement performance. It happens when employees bypass approved purchasing channels and processes, leading to inflated costs, contract leakage, and supplier proliferation.
Why It’s a Big Problem
According to multiple industry reports, maverick spend can account for up to 20% of indirect procurement costs. This lack of compliance not only undermines negotiated cost savings but also introduces risks tied to vendor performance, legal exposure, and even brand reputation.
Common Root Causes:
- Lack of user-friendly procurement tools
- Slow purchasing approval processes
- Limited visibility into preferred suppliers
- Inadequate employee training
- Procurement analyses that are outdated or incomplete
How to Control Maverick Spending
- Deploy an Intuitive Procurement Platform
Usability is key. Procurement systems that integrate catalogs, pricing, and vendor data into a seamless experience are far more likely to ensure user compliance.
- Set Clear Procurement Guidelines
Make it easy for departments to know what they can and cannot do. Define thresholds for approvals, specify preferred vendors, and distribute these policies broadly.
- Create Role-Based Access
Give teams access only to the suppliers and categories they are authorized to use. This cuts down on one-off purchases and out-of-scope spending.
- Monitor with Real-Time Dashboards
Set up dashboards to flag off-contract purchases immediately. Tie spend analysis reports to individual cost centers or even employees to identify repeat offenders.
- Engage Stakeholders Across the Business
Procurement must act as a service, not a roadblock. Involve finance, operations, and department leads in the design of purchasing processes to boost buy-in.
The Payoff
Companies that curb maverick spend don’t just save money, they increase buying power, consolidate purchasing, gain data-driven control, strengthen vendor relationships, and reduce audit headaches. It’s a win-win across compliance and performance.