SIG Resource Center

MANAGING THE “LONG TAIL”: How Focusing on Tail Spend Management Can Directly Impact a Firm’s Bottom Line

The “80/20 Rule” is something that we see repeatedly in our business and personal lives. It is simply an accepted “rule of thumb”—a shortcut that helps us manage our affairs and focus our energies. It is rooted in the ideas of Vilfredo Pareto, a trailblazing Italian economist noted for being one of the first people to analyze economic problems using mathematics. In the late 1800s, he observed that 80% of the land in Italy was owned by 20% of the population, then later, while gardening, he observed that 20% of the peapods in his garden yielded 80% of the peas that could be harvested.

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