The level of customer services offered by the Una team, along with our ability to act as an extension of their lean procurement team, showed the member what kind of partnership was possible.
Getting the Most Value Out of Your Indirect Spend Categories
Unleash savings and value.
The complete playbook to understanding indirect spend, why it's so often ignored, what it's costing you, and how to unlock the hidden savings inside it.
WHAT'S INSIDE:
5 challenges of managing indirect spend
The importance of spend thresholds
6 strategies for managing maverick spend
6 mistakes to avoid
Who's responsible for indirect spend
5 strategies for managing indirect spend
KEy takeaways
- Indirect spend accounts for 15–30% of total expenditure and is the most commonly unmanaged area
- McKinsey: tackling indirect spend can reduce costs by 10–25% and governance effort by 30–50%
- Maverick spend, missing policies, and lack of analytics are the most common root causes
- Responsibility is shared — procurement, department heads, employees, and finance all have a role
- Spend thresholds provide a structured framework for control and compliance
- A GPO is the fastest path to savings across indirect categories — free to join, results within weeks
What is Indirect Spend?
DEFINITION
Indirect spend refers to the purchase of goods and services that are essential for operations but don't directly contribute to the final product. It's everything that keeps the factory running but isn't part of what rolls off the assembly line.
Think of a bustling manufacturing plant: employees at their most efficient, machines operating smoothly, products being assembled. Keeping that operation running requires a constant flow of indirect goods. None of them appear in the product, but all of them are essential.
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Una's Sourcing Advisors identify savings in your indirect categories. Una is free to join with results in weeks.
Examples of Indirect Spend
Office Supplies
Pens, paper, printer ink, stationery -decentralized, often untracked.
IT Services
Software licenses, tech support, cloud infrastructure, hardware maintenance.
Logistics & Shipping
Shipping materials, transportation services, freight, packaging.
Utilities
Electricity, water, gas - all essential to operations, rarely competitively sourced.
Facilities
Cleaning services, repairs, maintenance contracts, security.
Travel
Corporate travel, accommodation, meals - high-volume and off-contract.
Factors that drive up indirect costs include duplication (multiple departments buying the same thing from different suppliers), process inefficiencies, maverick spend, automatic price increases embedded in supplier contracts, and automatic renewals that go unreviewed.
Not managing indirect spend also creates risk. While direct suppliers undergo thorough checks, indirect suppliers often slip through the cracks, exposing organizations to procurement fraud, compliance violations, and inflated costs.
McKinsey Research
Tackling indirect spend can reduce overall costs by 10–25% and reduce the manual effort involved in supplier governance by 30–50%.
5 Challenges of Managing Indirect Spend
Most organizations choose to leave indirect spend unmanaged for understandable reasons. Here are the five most common barriers and what's actually at stake with each one.
01
Lack of Spend Data
Gathering comprehensive data on indirect spend is a persistent struggle. Contracts are scattered across departments, employees make purchases without tracking them, and the sheer volume of transactions makes visibility near-impossible without a dedicated procurement software solution. You can't manage what you can't see.
02
Lack of Spend Policies
Without clear policies in place, unauthorized spend runs rampant. As companies grow, structured procedures fall by the wayside creating both confusion and inefficiency. Employees default to whatever is convenient rather than whatever is approved.
03
Maverick Spending
Employees bypass established procurement processes, sometimes because they don't understand them, sometimes because they don't know about them, and sometimes because they believe they can find a better deal. This rogue spending adds unnecessary costs and means the full value of negotiated contracts is never realized.
04
Lack of Data Analytics
Many organizations rely on basic spreadsheets to track indirect spending which makes extracting meaningful insights nearly impossible. Without robust analytics, identifying trends and savings opportunities becomes a guessing game rather than a data-driven discipline.
05
Lack of Spend Metrics & KPIs
It's impossible to measure the effectiveness of indirect spend management without established KPIs. Without benchmarks like spend under management, cost savings achieved, contract compliance rates, and supplier diversity, procurement teams have no way to gauge progress or demonstrate impact.
6 Strategies for Managing Maverick Spend
Maverick spend is the most damaging challenge in indirect categories. It occurs when employees bypass established procurement processes, leading to higher costs, invisible spend data, and eroded contract value.
These six strategies address both the process and the human factors behind rogue purchasing.
Establish Clear Procurement Policies
Develop and communicate comprehensive procurement policies that outline approved purchasing processes. Ensure all employees understand the importance of adhering to these guidelines and where to find them.
Increase Awareness & Training
Conduct training sessions to educate employees about the procurement process, the importance of compliance, and the real organizational impact of maverick spending. Use concrete examples to make abstract policy tangible.
Implement User-Friendly Procurement Tools
Invest in procurement technology that simplifies the purchasing process. User-friendly platforms streamline approvals and provide easy access to preferred suppliers making compliant purchasing the path of least resistance rather than the difficult option.
Set Up Approval Workflows
Create clear approval workflows for purchases, especially for non-standard items or higher-value expenditures. Ensuring that spending above a defined threshold is reviewed before execution prevents ad hoc purchasing from becoming a habit.
Foster a Cost-Conscious Culture
Encourage a culture where employees feel genuinely responsible for their spending decisions. When people understand that adherence to procurement policies benefits the whole organization — not just the procurement team — compliance improves naturally.
Engage Leadership Support
Secure buy-in from senior leadership to emphasize the importance of compliant spending. When leaders visibly model and advocate for adherence to procurement policies, it sets a tone that all employees tend to follow.
Who's Responsible for Indirect Spend?
Accountability for indirect spend can feel like a game of hot potato - everyone assumes someone else is handling it. The answer is that it should be a collective effort involving multiple stakeholders.
By fostering shared ownership, organizations can begin to manage what may have seemed like an uncontrollable area of spend.
Procurement Team
The central function responsible for developing policies, negotiating with suppliers, ensuring compliance, and analyzing spending data to identify trends and savings opportunities.
Department Heads
Each department incurring costs needs to take ownership of its indirect spend. Department heads must ensure their teams adhere to procurement policies and manage budgets effectively.
Employees
All employees with authority to spend company money have a role to play. They should understand the procurement process, recognize the impact of their decisions, and use approved systems for ordering.
Finance Team
Tracks spending patterns, ensures budgets align with procurement goals, monitors expenses, and provides insights that inform procurement strategy and identify areas of concern.
The Importance of Spend Thresholds
Spend thresholds are predetermined limits set for various categories of spending that help organizations establish different levels of control and approval based on the amount being spent. They're one of the most practical tools for managing indirect procurement at scale.
Why spend thresholds matter: They provide control and oversight by allowing different levels of scrutiny appropriate to the spend value. They manage risk by triggering extra compliance checks for high-value purchases.
They deter maverick spending by making approval requirements explicit. And they enable procurement teams to concentrate their attention on high-value contracts and strategic suppliers while smaller purchases flow more autonomously.
Implementing Spend Thresholds
STEP 1
Define Categories
Break down indirect spend into categories like office supplies, IT, travel, and facilities and determine appropriate thresholds for each based on volume and risk.
STEP 2
Establish Approval Processes
Create clear approval processes for purchases that exceed specified thresholds. Different levels of management review may be appropriate depending on the amount.
STEP 3
Communicate Policies
Ensure all employees are aware of established thresholds and associated procurement policies. Regular training reinforces these guidelines and reduces accidental non-compliance.
STEP 4
Monitor Compliance
6 Mistakes to Avoid When Managing Indirect Spend
Navigating indirect procurement is complex, but avoiding these six common pitfalls significantly improves outcomes.
❌ Downplaying Its Importance
Treating indirect spend as a side issue rather than a key part of procurement strategy means 15–30% of total spend gets no attention and costs compound undetected.
❌ Failing to Track Spend
Without a solid system to monitor and analyze indirect expenses, savings opportunities go unidentified and areas of concern go unaddressed until they become significant problems.
❌ Not Managing Risks
Indirect suppliers face less due diligence than direct suppliers leaving organizations exposed to fraud, compliance violations, and quality failures in a significant portion of their spend.
❌ Neglecting Supplier Relationships
Treating indirect suppliers as purely transactional misses opportunities for better pricing, improved service, and innovation from vendors who know your business well.
❌ Failing to Engage the Whole Team
Indirect spend is purchased across every department. Without cross-organizational buy-in and education, procurement policies remain on paper while maverick spending continues in practice.
❌ Trying to Tackle It Alone
Attempting to manage all indirect categories with internal resources alone is often impractical. A GPO like Una provides instant buying leverage, pre-negotiated contracts, and category expertise at no cost.
5 Strategies for Managing Indirect Spend
There's no single solution that works for every organization. These five approaches range from fully internal to fully outsourced — the right choice depends on your team's capacity, budget, and the categories involved.
01
In-House Management
Managing all aspects of indirect procurement internally gives complete control but it's resource-intensive. You'll need a dedicated team to handle procurement tasks, analyze data, and build supplier relationships. Best suited for larger organizations with the capacity to invest in a robust procurement function.
02
Outsourcing Indirect Procurement
Hiring an external firm to manage indirect procurement allows you to focus on core business activities while accessing specialized expertise. Effective for organizations with limited internal procurement capacity but who need professional-grade sourcing support.
03
Using Technology Solutions
Procurement technology automates purchasing, data collection, analysis, and reporting making it easier to track spending and identify savings opportunities at scale. User adoption is the critical success factor: software only works if employees use it.
04
Create Strategic Partnerships
Building strong relationships with key indirect suppliers leads to better pricing, improved service, and more favorable contract terms over time. Most effective when combined with a formal Supplier Relationship Management (SRM) program.
05
Leverage a Group Purchasing Organization (GPO)
One of the most effective solutions for managing indirect spend. GPOs leverage collective buying power to negotiate better pricing across a wide range of indirect categories and GPOs are especially effective here because the volumes are substantial, the contracts apply to most members, and the savings can be applied across several categories simultaneously. Una's membership is always free.
Working With Una to Manage Indirect Spend
Una harnesses billions in collective buying power to unlock savings across high-volume indirect categories including travel, office supplies, shipping, JanSan, and MRO.
Members access a robust supplier portfolio of pre-negotiated contracts across key spend taxonomies meaning Una can find savings and spend management solutions across multiple categories simultaneously, not just one at a time.
Steps to Getting Started With Una
STEP 1
Membership
Sign up for free membership with Una. The process is straightforward and opens the door to a wealth of knowledge, resources, and supplier contracts.
STEP 2
Identify Savings
Una's Sourcing Advisors analyze your indirect spend data and uncover potential savings across categories, benchmarking your current pricing directly against pre-negotiated contract rates.
STEP 3
Leverage Una's Supplier Relationships
Take advantage of Una's established supplier relationships to access negotiated discounts on quality products and services without running a sourcing event or managing the negotiation yourself.
STEP 4
Monitor & Adjust
Regularly review your indirect spend performance with Una's Member Experience team. Use the insights gained to adjust strategies and capitalize on new opportunities as your business evolves.
CASE STUDY
Saving 27% Across Multiple Categories
BEHAVIORAL HEALTH NETWORK
Growing organization, unmanaged indirect spend, results in weeks.
A network of detox and inpatient rehabilitation centers was expanding rapidly while inflation soared and supply chain disruptions loomed. Without any mature procurement policies in place, spend was going unmanaged across several indirect categories. They needed help quickly.
Una's Sourcing Advisors analyzed the member's spend data, connected them to pre-negotiated contracts across multiple categories, and delivered double-digit savings within weeks, all without disrupting operations or requiring significant internal effort.
27%
average savings across all audited indirect spend categories
49%
Savings on office products, 22% on food costs, and 20% on both staff uniforms and JanSan services
Weeks
Time to savings — from discovery call to contract connection with minimal friction
Ready to Unlock Your Indirect Spend?
Join Una free and get a cost analysis identifying exactly where your savings are with no commitments, no minimums, and results within weeks.