What Is Maverick Spending? 

Maverick spending or often called rogue spending is when an organization makes purchases outside of the approved procurement processes and policies. While one rogue purchase may not undo the work and efforts of the entire procurement team, repeated purchases across an entire organization can have an extraordinarily negative impact. Not only can this result in increased costs, but it can also be inefficient. The organization loses visibility in spending habits and most significantly, it can damage relationships with its suppliers. When an organization partners with a powerful procurement software system, it can significantly reduce or prohibit maverick spending.  

How to Reduce Maverick Spending 

While the level of reduction in maverick spending may vary in each organization based on the company culture and current procurement policies, there are many ways procurement teams can assist with this reduction. Consider the following tips for greater success.   

     

      • Ensure end user adoption and change management is a priority in the organization. Procurement teams should share the “why” with operational leaders. Sharing a high-level overview of the procurement process with operational leaders is a great way to demonstrate the details and negotiation techniques considered and utilized with each contract. Procurement teams can collaborate with training and development teams to train the end users on procurement policies for positions that are allowed to make purchases for the organization. This may include store management teams or assistants in corporate offices.  

       

        • Procurement teams should build relationships with all internal stakeholders. Procurement is often viewed as the liaison between internal and external partners. By creating relationships with internal teams, procurement leaders can communicate updates to the business directly.  

         

          • Procurement teams should always update the business with contracted suppliers and contract terms. Consider creating a procurement newsletter that can be shared on a cadence that aligns with the procurement team’s contract renewals. The end user should always be aware of their current suppliers for each supply, equipment, or service and the basic contract terms. They should know the effective date to begin or end ordering from a supplier, pricing information, and specific ordering or shipping terms, including the lead time for the end user to receive the product. If any of these terms were to change mid-contract, updated communication should be sent to the business from procurement.  

           

            • The procurement system being utilized by the organization should be easy to use. The catalogs available to the end user should only show suppliers approved for that location. All significant ordering information should be clear in the catalog. For example, if the supplier has defined a Minimum Order Quantity (MOQ) in their contract, the end user should never be allowed to order less than that amount in the system, and an error message should be displayed if necessary. Catalogs should be available on the first day of the contract effective date and should then be removed immediately from the system at the termination of that contract. If an end user is unable to make a purchase for a contracted item easily, this will often result in rogue spending, as the end user may need to order with urgency. Consider linking related items or replacement parts in the catalog for easier access.  

             

              • Create an approval flow in the procurement system that works for the organization. Consider automating approvals for items under a certain dollar threshold or “not to exceed” (NTE) amount. Establish notifications and deadlines for the approver to approve the purchases in the system. Failure to approve the order in a timely manner can result in the end user canceling the order altogether and making a purchase outside of the current approved process.  

               

                • Procurement teams should use spend analysis to identify maverick spenders. Whether they gather reporting and spending data from the procurement system or from the suppliers directly, procurement teams should review the data within the first couple of months of a contract to ensure end user adoption. Identifying these maverick spenders early in the contract can identify potential issues with the catalog, supplier compliance issues, or overspending from previous suppliers. This data should always be shared with the operational teams to take corrective action, as necessary. Procurement teams should consider meeting with both internal stakeholders and the suppliers throughout the contract term to discuss any feedback that should be shared with either party.  

              Long-Term Consequences of Maverick Spending 

              Whether an organization struggles with maverick spending by ignoring procurement policies or making purchases that do not align with the negotiated contract terms, increased, inefficient spending can snowball into higher costs for the company but more importantly, can damage relationships with suppliers. A significant role of the procurement team is to establish and create long-term relationships with suppliers. If a supplier cannot trust that the organization will deliver on expected purchases and forecasted volume because of maverick spending, they may not be able to offer competitive bids in future RFPs or decline to participate at all. While procurement teams are not the end users making rogue purchases, failure to reduce the ability of maverick spending by a procurement team could have long-term consequences by reducing the supply base and damaging the company’s reputation in the industry.  

              About the Author 

              Andrea Gnezda is a seasoned procurement and retail operations leader with over a decade of experience, driving results across diverse roles in the retail industry. Starting as a part-time cashier, she advanced to operational leadership roles, including over seven years with ALDI USA. There, she served as an Executive Manager in National Procurement, excelling in problem-solving, RFP management, and supplier relationships, and as a District Manager, where she oversaw safety awareness, team development, and operational excellence. Her career foundation at Marsh Supermarkets saw her progress from Co-Manager to Store Manager, refining her leadership and operational skills. During the global pandemic, Andrea transitioned into procurement, successfully navigating supply chain disruptions, mitigating cost increases, and fostering collaborative supplier partnerships. Her unique blend of operational leadership and procurement expertise makes her adept at solving complex challenges, driving efficiency, and building strong, lasting partnerships. 

              About Varis 

              Varis is a one-stop shop for supplies and services stores need to run, from frontline to finance—no paperwork, no phone tag, no confusion through a powerful eProcurement platform. Their solution allows retailers to curate supplier catalogs and access Varis’s managed suppliers, simplifying the purchasing process and enhancing efficiency.  

              The leadership team includes Chief Executive Officer and co-founder Prentis Wilson, who previously founded Amazon Business and scaled it to a $15B+ division, and Chief Operating Officer Daniel Smith, who has extensive experience launching and scaling businesses, including leading Amazon Business for Education to over $2B.  

              Varis’s platform is designed to make it easy for employees to find what they need, aiming to improve profit margins and associate experience by simplifying indirect purchasing.