Indirect spend remains an organizational gray area in many companies because responsibilities are not clearly defined between departments, procurement, and finance.
Indirect spend is one of the biggest blind spots for many companies. While direct costs like raw materials, production supplies, or trade goods are usually clearly assigned and managed, indirect spend often disappears into organizational gray areas. This is exactly where a familiar problem arises: many departments are involved, but no one feels truly responsible for the entire process.
Whether it is software licenses, consulting services, marketing spend, office supplies, external services, or smaller operational purchases, indirect spend occurs in almost every part of a company. It is initiated by departments, partially supported by procurement, and controlled by finance. Yet, between these functions, it often remains unclear who is actually responsible for transparency, selection, negotiation, and long-term management. Why these requirements so often go unnoticed is also highlighted in our article on One-off requirements as a blind spot.
A common reason for the lack of clear responsibility lies in the traditional division between procurement and departments. Procurement is seen as the central hub for purchasing, but it does not always have the necessary technical insight into all indirect spend. At the same time, departments know their requirements best but often do not see themselves as the owners of the procurement process.
This creates a conflict. The department decides which solution is needed, which service provider seems suitable, or which software supports their daily work. Procurement often only gets involved later, for example, when it comes to contract review, terms, or compliance. As a result, procurement becomes more of an administrator than a strategic partner.
On the other hand, departments often lack the time or expertise to systematically analyze procurement markets, compare suppliers, or identify savings potential. Their priority is meeting their operational goals. Consequently, procurement quickly becomes a side task, even though it can have a significant impact on costs, efficiency, and company development.
This unclear distribution of roles leads to indirect spend often growing without clear oversight. Individual teams sign contracts with different providers, use various solutions for similar tasks, or automatically renew existing agreements without regularly questioning their value.
The problem is rarely a lack of cost awareness. Much more often, there is a lack of a shared understanding of who is responsible for which decisions. When multiple functions are involved but none have a complete overview, typical situations arise.
Departments choose solutions that meet their immediate requirements without always considering the impact on the organization as a whole. Procurement often receives important information too late and has limited influence on terms or supplier decisions. Finance only sees the costs after the order is placed, allowing them to control rather than actively shape the process. At the same time, the company loses transparency regarding contracts, spend volume, and potential optimization opportunities.
As a result, indirect spend becomes an area where many contribute, but no one truly steers.
Many companies try to solve this challenge with additional guidelines, approval processes, or central purchasing rules. While such measures create more control, they do not automatically eliminate the root cause of the problem. There is often a missing link between operational requirements, strategic procurement, and company-wide transparency.
Centralized procurement alone cannot effectively manage every indirect expense. The requirements are simply too diverse. An IT department evaluates a software solution based on different criteria than a marketing department does for agency services or a facilities team for a technical service provider.
At the same time, decentralized departments cannot be solely responsible for procurement decisions if they lack market transparency, negotiation expertise, or an overview of company-wide spending.
The solution, therefore, is not to shift responsibility entirely, but to better organize collaboration and accountability.
Successful companies create clear structures for indirect procurement and develop a shared understanding of their respective roles. Departments contribute their requirements and technical expertise. Procurement provides market knowledge, supplier management, and negotiation skills. Finance ensures transparency regarding budgets, spending, and economic impact. Together, they make decisions that account for both operational requirements and strategic corporate goals.
Digital procurement solutions can help structure this collaboration, make needs visible early on, and create a common foundation for decision-making. However, the decisive factor is not the individual tool, but how responsibilities and processes are organized.
This is exactly where Pedlar comes in. As a provider of the single creditor model, Pedlar consolidates the processing of indirect and one-off requirements through a single creditor, creating transparency where indirect procurement has often remained opaque. Departments retain the flexibility necessary for their operational work, while procurement gains early insight into requirements and can apply its expertise strategically. In this way, Pedlar bridges the gap between departmental proximity and strategic procurement competence. Companies gain a better overview of their indirect spending, identify potential earlier, and prevent important information from being lost between individual departments. You can find out how this approach works in detail at Why Pedlar.
The question is not whether procurement or the departments are to blame for the fact that indirect spending remains difficult to control. The real problem lies in a lack of transparency and unclear collaboration.
As long as indirect procurement falls between different functions, it remains a gray area. However, once companies establish clear responsibilities and departments, procurement, and finance work together on a common foundation, it becomes an area with significant strategic potential.
Indirect expenses are therefore not just cost centers. They are a lever for greater efficiency, better decisions, and sustainable value creation throughout the entire company. With Pedlar's single creditor model, an opaque procurement landscape becomes a structured process that connects all stakeholders and supports companies in managing their spending effectively.
Would you like to learn how to clearly structure and manage indirect spending in your company? Learn more →
