When leadership communicates an urgent need to reclaim budget, the instinct is to make across-the-board cuts. But blanket cuts don’t reclaim budget. They create surprise costs later through delays, quality issues, churn, and firefighting.
John Joseph Carpenter, National Practice Partner at ERA Group, helps organizations reduce and control non-core spend through rigorous analysis, supplier insight, implementation, and ongoing monitoring. After more than 30 years in leadership across business and government, he has seen the same cycle repeat: when pressure hits, companies cut fast instead of cutting smart.
“The better approach is strategic spend analysis,” Carpenter says. “Find spend that isn’t producing the outcome you think you’re buying and convert it into usable budget.”
Making Spend Visible So Leaders Can Act
The first step to reclaiming budget is making spending visible in a way leaders can trust.
“Most companies have the data, but it’s fragmented,” Carpenter explains. “AP, purchasing cards, T&E, subscriptions, different owners, different naming, different stories. Consolidate 12 to 18 months of spend, normalize vendor names and categories, and split recurring versus one-time and contracted versus discretionary.”
Most organizations have spending data scattered across systems. Each system uses different vendor names, categorization schemes, and reporting formats. This fragmentation prevents clear visibility. Leaders cannot answer basic questions such as category spend or whether duplicate services exist without extensive manual analysis. When data is messy, leaders don’t decide; they debate assumptions, challenge numbers, and delay action.
Consolidating and normalizing spend data creates clarity. Pull 12 to 18 months of spend from all sources, normalize vendor names, categorize spend consistently so like services group together, and split recurring from one-time and contracted from discretionary to understand spend patterns.
When spending is clean, you can act quickly and confidently. Clarity creates speed.
Finding Budget in the Leakage Zone
Don’t start with the biggest suppliers. Start with the leakage zone, the spend that slips through governance.
“This is where the budget hides,” Carpenter explains. “Duplicate vendors doing the same job, off-contract buying, inconsistent pricing for identical outcomes, unused subscriptions and auto-renewals, and tail spend that’s small individually but massive in aggregate.”
Most cost reduction efforts target the largest suppliers first. Leadership assumes the biggest line items offer the biggest savings. This creates long negotiations over small percentage reductions while missing the budget hiding in plain sight.
The leakage zone is where budget actually hides. Unused subscriptions auto-renew because nobody tracks what’s actually being used. Tail spend consists of hundreds of small vendors that individually seem insignificant but collectively represent substantial budget.
Leakage is powerful because it often has low operational dependency. You can remove it without disrupting delivery. Consolidating duplicate vendors, for example, doesn’t change what gets done, just who does it.
Shifting From Price to Total Cost
The move that makes savings stick is shifting from price arguments to total cost management.
“A low invoice price can still be expensive if it creates rework, exceptions, delays, risk, downtime, or heavy internal labor to manage it,” Carpenter explains. “Instead of asking ‘Can we negotiate this cheaper?’ ask ‘What is this costing us beyond the invoice? What outcome are we actually buying?'”
Most procurement focuses on negotiating lower unit prices. This creates savings on paper but often increases total cost through operational friction.
Low invoice prices can be expensive. Suppliers offering the lowest bids may lack the capacity to deliver consistently, creating delays that require expedited shipping or internal workarounds. Durable budget comes from eliminating inefficiency, not just squeezing suppliers.
Turning Hidden Inefficiency Into Capacity
“Reclaiming budget isn’t a one-time cost exercise; it’s a repeatable capability,” Carpenter concludes. “See spend clearly, remove leakage, manage total cost, not just price. If you want a practical next step, pull your top 50 vendors and bottom 500 and look for duplicates, off-contract patterns, and auto-renewing waste. You’ll usually find quick wins you can redeploy into priorities without disruption.”
The goal isn’t to spend less. It’s to spend with intent and turn hidden inefficiency into capacity.
See spending clearly through consolidated, normalized data. Remove leakage by targeting duplicate vendors, off-contract buying, and unused subscriptions. Manage total cost by understanding what costs lie beyond the invoice.
When you reclaim budget through strategic spend analysis, savings don’t create surprise costs later. They create capacity you can deploy into priorities.
Connect with John Joseph Carpenter on LinkedIn for insights on reclaiming budget through strategic spend analysis.
