Beyond Cost Control: Why Telecoms Need a Smarter Approach to Procurement Risk

This Industry Viewpoint was authored by Oliver Norman, Chief Revenue Officer, Nomia

Telecom operators occupy a unique position in today’s economy. They are expected to modernize networks, protect critical national infrastructure, maintain resilient supplier ecosystems, and respond quickly to changing regulatory and security requirements – all while continuing to control costs.

Recent geopolitical events have reinforced how quickly external pressures can affect supply chains, technology availability, and operational priorities. As a result, many operators are taking a closer look at one area of procurement that has traditionally attracted relatively little strategic attention: tail spend.

Tail spend – also called non-strategic spend – typically amounts to around 20% of procurement expenditure but can represent a significant proportion of supplier transactions. It includes thousands of lower-value purchases spanning specialist software, network support services, field engineering, facilities management, professional services, testing, logistics, and local suppliers.

Individually, these suppliers may appear relatively low risk. Collectively, however, they often represent a large and fragmented supplier network that can be difficult to monitor consistently.

Hidden risks in a fragmented supplier base

Strategic vendors are usually subject to robust governance and ongoing oversight. Tail suppliers, however, often enter organizations through decentralized purchasing decisions designed to meet immediate operational requirements. As a result, supplier information can become dispersed across procurement systems, finance platforms, spreadsheets, contract repositories, and individual business units.

Our customers often tell us that the greatest challenge is not necessarily the suppliers themselves, but the fragmented information associated with them. In normal operating conditions, this fragmentation may appear manageable. During an audit, regulatory review, cyber incident, supplier failure, or geopolitical disruption, however, those gaps can become much more significant.

Operators may need to quickly establish which suppliers support critical infrastructure, where alternative suppliers exist, whether contractual documentation is current, or which vendors could be affected by sanctions, regional instability, or wider supply chain disruption.

Answering those questions becomes considerably easier when organizations have a single, connected view of supplier activity.

Why a system of record matters

Many telecom operators are finding that procurement is becoming as much a data challenge as a sourcing challenge.

A procurement system of record can connect supplier onboarding information, contracts, approvals, compliance documentation, transaction data, certifications, and performance records within one structured environment. By integrating information from existing procurement and finance systems, it can provide a more complete and consistent picture of supplier activity across the organization.

Our experience suggests this enables procurement, finance, legal, compliance, and operational teams to work from the same information – improving audit readiness, identifying duplicate suppliers, and helping organizations respond more quickly when business conditions change.

AI is only part of the answer

Artificial intelligence is becoming an increasingly valuable tool for managing procurement complexity.

AI can rapidly analyze large volumes of supplier and transaction data, classify vendors, identify anomalies, highlight missing documentation, support onboarding workflows, and surface potential compliance concerns. For organizations managing thousands of suppliers, this can significantly reduce administrative effort while improving consistency.

However, automation delivers the strongest outcomes when combined with experienced human judgement. Procurement decisions often involve commercial relationships, regulatory interpretation, operational priorities, local market knowledge, and supplier performance factors that cannot easily be captured within a dataset.

An AI-enabled platform may identify a supplier that appears commercially attractive. An experienced procurement specialist may know that the supplier has struggled to meet delivery commitments, presents contractual risks, or operates in a region where geopolitical developments are increasing uncertainty.

The most effective operating models therefore combine AI-driven scale with human expertise. Technology provides speed and scale; experienced professionals provide context, oversight and accountability.

This is one reason some operators are exploring specialist partners that combine AI-enabled procurement technology with experienced procurement professionals. In many cases, these models help extend internal capability while maintaining greater consistency across fragmented areas of spend.

This gives internal teams more room to focus on strategic sourcing, supplier innovation, and commercial decision-making, while giving them greater confidence that lower-value supplier activity is being governed consistently and in line with internal standards.

From procurement process to business resilience

Tail spend has long been viewed as an administrative challenge because individual transactions are relatively small. Increasingly, however, operators are recognizing that understanding the wider supplier base is an important element of procurement risk management.

At a time when geopolitical instability, cybersecurity threats, regulatory pressures, and supplier disruption can quickly become operational issues, fragmented procurement data represents a risk that telecom operators can no longer afford to overlook.

Bringing greater visibility, structure, and intelligence to tail spend can help operators strengthen governance, respond more quickly to disruption, and build more resilient supplier ecosystems. It is no longer simply a matter of controlling costs. It is an increasingly important part of protecting the networks, services, and infrastructure on which customers and economies depend.

If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!