What is non-addresable spend?

Non-Addressable Spend refers to the portion of an organization's expenditure that falls outside the control and responsibility of the procurement department. This spending includes categories of expenses that are managed by other departments or functions within the company, such as capital investments, employee benefits, and facility maintenance.

Unlike Addressable Spend, which is subject to procurement optimization strategies, Non-Addressable Spend cannot be directly influenced by procurement professionals. It typically involves long-term financial commitments and is allocated to areas that do not directly relate to the procurement of goods and services for daily operations.

Effective procurement management involves distinguishing between Addressable and Non-Addressable Spend to focus resources and efforts on areas where cost savings, supplier negotiations, and procurement efficiency can be maximized.