Efficio: CPOs and CFOs Lack Indirect Spend Visibility

Indirect spend sits at the centre of growing concern among senior procurement and finance and leaders, with fresh data revealing a widespread lack of oversight.

The majority (85%) of Chief Procurement Officers (CPOs) and Chief Financial Officers (CFOs) say more than a quarter of their organisations' indirect spend happens without financial control, while just 19% are "fully confident" they have an accurate picture of what's being spent.

Indirect spend refers to purchasing that supports a company’s day-to-day operations but is not directly tied to making a product or delivering a service.

This includes areas like IT, software, office supplies, marketing and professional services.

As this type of expenditure accounts for nearly half of total corporate spend, the findings suggest a considerable volume of outgoings is left open to waste and inefficiency.

The worrying data has been uncovered by procurement and supply chain consultancy Efficio. It highlights the risks linked to unmanaged indirect spend and points to steps procurement and finance are prioritising to bring spending under control.

Large share of indirect spend not controlled

Efficio finds that 89% of senior procurement and finance leaders believe more than half of their indirect spend is unaddressable, meaning they view it as largely beyond their influence.

However, only 19% of respondents actually review indirect spend on an annual basis. Efficio estimates that simply implementing structured review processes could recover up to 15% of spend currently lost to inefficiency or waste.

Tim von der Decken, Vice President at Efficio, says: "Organisations 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."

The gap between perception and reality points to missed opportunities. With procurement teams typically more focused on direct goods and services, indirect categories risk being neglected.

This creates exposure to issues such as duplicated services, supplier proliferation and inconsistent pricing, particularly when internal teams bypass procurement and purchase outside of agreed frameworks.

Climbing the boardroom agenda

The issue of indirect spend is certainly not escaping attention at senior levels.

The vast majority (93%) of those surveyed either agreeing indirect spend is a board-level issue or believing it should be. Of those who disagree, a third plan to raise it at board level.

Strengthening procurement capabilities appears high on the agenda, with 85% of leaders rating skills development as a top priority in their indirect spend strategy. Many are recognising that tackling this category requires more than just oversight – it calls for procurement teams who understand complex supplier markets, contract structures and internal demand behaviour.

Simon Whatson, Vice President at Efficio, adds: "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."

The opportunity to secure cost reductions and unlock long-term efficiency is clear. With inflationary pressures and rising expectations for fiscal control, indirect spend oversight is becoming a lever for value creation across the entire organisation. 

IT and software most exposed to leakage

When asked which departments face the highest risk of cost leakage, 81% of respondents identify IT and software, followed by professional services at 68%.

This aligns with the growing complexity of technology procurement, where decentralised purchasing and fast-changing supplier landscapes often create confusion and inconsistency.

Maverick spend – used to describe purchasing that happens outside of approved procurement channels – is identified as a major problem by 93% of CPOs and CFOs. A lack of control increases the likelihood of paying above-market rates, missing volume discounts and breaching contract terms.

These findings suggest indirect spend, especially in areas such as IT and professional services, requires focused governance to curb waste. Leaders face a choice: continue treating indirect spend as background activity, or elevate it to a strategic function managed with the same rigour as direct procurement.

With data pointing to clear gaps in visibility, review processes and capability, procurement and finance leaders have much to gain from reassessing how indirect spend is handled across their organisations.