How Zycus and IBM Are Tackling Tail Spend

Zycus and IBM are both recognised as leaders in their respective fields. 

Now, the pair have joined forces to launch a holistic tail spend management solution, powered by agentic AI.

The hidden challenge of tail spend

Tail spend – the 20% of an organisation’s spend spread across 80% of suppliers – has long been a blind spot for procurement.

Characterised by high volumes of low-value transactions, limited visibility and decentralised ownership, it is difficult to control, optimise or even track.

Despite sophisticated procurement systems, this slice of spend often slips through the gaps – unmanaged, inefficient and full of missed opportunities.

Project Tailwind: An AI-orchestrated solution

Zycus and IBM aim to solve this through their collaboration, codenamed Project Tailwind, which brings together their strengths in an execution-ready model.

The solution moves beyond fragmented fixes and delivers a single, agentic AI-orchestrated, globally-scalable programme for tail spend.

Zycus provides the intelligence layer:

• Merlin Intake as the "front door", capturing requirements in Microsoft Teams and keeping them in line with policy
  
• Autonomous Negotiation Agent (ANA) and agentic AI to negotiate small-value transactions at scale, ensuring compliance, savings and speed

IBM brings strategy, consulting and execution capabilities:

• Service excellence from specialists with deep category expertise and access to a global supplier ecosystem
  
• Proven governance and change management, with a global footprint to deliver greater value to clients

Tail spend was discussed at Zycus Horizon during a session co-led by Kuntha Chelvanathan, Global Procurement Operations Offering Leader at IBM, and Bikash Mohanty, Vice President, Solution Consulting and Product Strategy at Zycus.

"Tail spend has always been Procurement's handicap – too costly to manage manually, too fragmented to prioritise and no technology to manage holistically," comments Kuntha. 

"By combining IBM's services intelligence with Zycus' Agentic AI, we're offering the market a truly scalable solution to unlock savings, compliance and advanced user experiences where none existed before."

At Horizon, IBM shared a real-world consumer products case showing how guided intake and intelligent triage can ensure 100% compliance and bring up to 20% of unmanaged spend under control.

Zycus demonstrated how the Merlin Agentic AI Platform enables autonomous negotiation and category-aware automation, driving tangible results – including US$520m in savings over five years on US$1.2bn of tail spend.

The key takeaway from California was that, with AI-led orchestration, even the smallest purchases can drive strategic value and measurable business outcomes.

Early traction and future vision

Zycus and IBM have begun jointly working on more than half a dozen significant tail spend programmes across the US, Europe and Asia – spanning categories from facilities management to marketing services, and expected to deliver value across multiple programmes.

Aatish Dedhia, CEO and Founder of Zycus, expands on Kuntha's point by underscoring the power of the partnership: "At Zycus, our mission is to deploy agentic AI from intake to outcome.

"Tail spend is a multi-billion-dollar savings opportunity hiding in plain sight. Our Merlin Intake and ANA bring the intelligence; IBM brings the scale.

"Together, we're rewriting how procurement manages its long tail. With innovation at the core and collaboration as the catalyst, we're entering a new era – where procurement is not just smarter, but outcome-driven."