Shadow Procurement: The Spend Finance Never Sees

Every organisation of any size has a version of it: the purchase made outside the approved supplier list, the subscription bought on a personal card and expensed later, the order placed with whichever vendor happened to answer the phone first because the preferred one takes three days to respond. None of it shows up in the procurement dashboard. All of it is still spend the organisation is responsible for.

It Isn’t Always Dishonest. It’s Often Just Faster

The instinct is to treat this as a compliance problem, something that better policy or a firmer memo will fix. That instinct is usually wrong. Most people who buy outside the approved process are not trying to hide anything. They are trying to get something done, and the approved route was slower, less clear, or simply less familiar than the alternative in front of them.

What Actually Drives Maverick Spend

Industry research into what is often called maverick or off-contract spend consistently points to the same three drivers: process complexity, organisational silos, and simple lack of awareness that a preferred supplier already exists for the category in question (GEP, 2026). When an approval workflow requires multiple sign-offs across systems that do not talk to each other, or when authorisation thresholds are unclear, the compliant route becomes the slower one, and under any kind of deadline pressure, slower loses.

This is a design problem before it is a behaviour problem. If the correct way to buy something is also the hardest way to buy it, organisations should expect people to route around it, not be surprised when they do.

The Real Cost Beyond the Discount

The most obvious cost of off-process spend is the lost negotiated discount, since organisations that regularly buy outside approved contracts are estimated to forfeit somewhere between 10% and 50% of the savings they had actually negotiated (Kodiak Hub, 2026). But the deeper cost is informational rather than financial: finance loses the ability to see committed spend as it happens, which means budgets are managed against a partial picture, and forecasting becomes a matter of guesswork layered on top of whatever data did make it into the system.

Shadow procurement, in other words, is not just money leaking out through a side door. It is a gap in the organisation’s own view of itself.

Designing a Process People Actually Want to Use

Reducing off-process spend rarely comes down to stricter enforcement. It comes down to making the approved route genuinely competitive with the workaround: clear thresholds, fast routing to the right approver, and visibility into which suppliers are already preferred, so people are not choosing between compliance and speed. When the sanctioned way to buy something is also the quickest, most people will simply use it, because most maverick spend was never really about rebellion, it was about convenience.

References
GEP (2026) Maverick Buying in Procurement: All You Need to Know. Available at: https://www.gep.com/blog/strategy/maverick-buying-in-procurement (Accessed: 24 September 2026).
Kodiak Hub (2026) Maverick spend: What it is, why it happens, and how to reduce it. Available at: https://www.kodiakhub.com/blog/maverick-spend-what-it-is-why-it-happens-and-how-to-reduce-it (Accessed: 24 September 2026).