Maverick Buying
Definition:
Maverick buying, also known as rogue spending, refers to the purchase of goods or services outside of an organization's established procurement processes and policies. This often occurs when employees bypass the procurement department and make purchases independently, without proper authorization or oversight.
Example:
A manager at Acme Corporation urgently needs a new software tool for their team. Instead of going through the standard procurement process, which involves submitting a requisition and waiting for approval, the manager finds a supplier online and purchases the software using their personal credit card, expecting to be reimbursed later. This purchase would be considered maverick buying.
Why is controlling Maverick Spending important to Procurement?:
Controlling maverick buying is crucial for procurement teams to maintain spend visibility, ensure compliance with procurement policies, and achieve the benefits of strategic sourcing. Maverick buying can lead to higher costs, as purchases may not leverage negotiated discounts or favorable contract terms. It can also introduce supply chain risks, such as using unapproved or unreliable suppliers, and make it difficult to track and analyze overall spend. Procurement teams should work to minimize maverick buying by educating employees about procurement policies, establishing clear and efficient purchasing processes, and implementing controls and monitoring systems to identify and address non-compliant spending.