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Servers, hardware and licences are items which may be found in which category of spend?
Items such as servers, hardware, and licences fall under the IT (Information Technology) category of spend. Categories are organised into direct and indirect spend, and IT is a common example of indirect spend, which includes goods and services that do not directly contribute to production but are essential to operations. IT spend is strategically important as it supports digital transformation, efficiency, and business continuity. Effective management of IT categories involves considering licensing agreements, hardware refresh cycles, cybersecurity, and vendor lock-in risks. Poor IT procurement strategies can lead to high costs, inefficiencies, and security vulnerabilities. Category managers in IT must also keep up with fast-changing technology markets, cloud adoption trends, and vendor consolidation. Recognising IT as a distinct category ensures that procurement strategies address unique risk factors and maximise value.
According to studies completed by Reeves, Moose and Venema in 2014, which of the following was proven to be true with regards to the BCG matrix?
Reeves, Moose and Venema (2014) established that products move through the four quadrants of the BCG matrix more quickly in the modern business environment compared to the past. This is a reflection of faster innovation cycles, market saturation, and increased competition. The other three statements are the opposite of what their research proved.
Volatile inflation rates are a risk that can affect any business. Which STEEPLED factor would this fall under?
Inflation is directly linked to the Economic factor within STEEPLED. It affects costs, purchasing power, and business profitability.
[Ref: CIPS L5M6 Study Guide, p.109 -- STEEPLED analysis factors]
Penelope works for an international manufacturer. Which categories are most likely to be outsourced? [Select TWO]
The categories most likely to be outsourced are Marketing services and Facilities Management [FM]. These are examples of indirect spend categories where external providers often offer specialist expertise, cost efficiency, and scalability.
CIPS identifies five indirect categories frequently outsourced: Marketing, Facilities Management, IT/Communications, Human Resources, and MRO [Maintenance, Repairs, Operations]. Outsourcing these allows organisations to focus internal resources on core competencies such as manufacturing or R&D.
Raw materials, warehousing, and operations are typically core to production and therefore managed internally or strategically sourced, rather than fully outsourced. While warehousing may sometimes be outsourced [3PL], it is not listed among the primary categories in the study guide.
Outsourcing decisions must balance cost, risk, and strategic importance. For example, outsourcing FM reduces overheads while ensuring professional management of buildings and services, whereas marketing agencies provide creativity and campaign expertise.
[Ref: CIPS L5M6 Study Guide, pp.46--47 -- Categories commonly outsourced]
Workshops, safety facilities, and design engineers are indirect costs associated with which industry?
In construction, indirect costs include items like workshops, safety facilities, and design engineers. These are necessary for operations but not directly tied to a single output.
[Ref: CIPS L5M6 Study Guide, p.90 -- Indirect cost examples by industry]
92 questions covering all exam domains, starting from $20
Exam domains verified against: Official CIPS L5M6 exam guide, last checked September 2026.
Compare strategic and conventional sourcing and how category management differentiates from account management. Evaluate different adoption models such as AT Kearney's 7-step model and the CIPS Category Management Model. Identify the technical skills like financial analysis and cost management alongside behavioural skills such as communication and cross-functional working required to implement category management successfully.
Sample question from this domain above: Q1
Contrast direct and indirect cost expenditures and apply Pareto analysis to identify key suppliers and high-value spend. Compare and contrast tools and techniques for mapping expenditure categories including matrices, supply chain mapping, Porter's 5 Forces Model, market share analysis, STEEPLED and SWOT assessments, and technology route maps. Use these tools to structure your understanding of organizational spending patterns.
Examine how category management influences organizational performance and drives sustainable procurement outcomes. Understand the role of data-driven decision-making and market intelligence in shaping sourcing strategies. Recognize how category management processes create competitive advantage and deliver organizational value through strategic supplier and expenditure management.
Sample question from this domain above: Q3
Identify and interpret internal and external data sources including historical and forecasted spend data, demand patterns, current contracts with suppliers, existing relationship and performance reviews, and market trends. Understand how to gather, validate and prepare data that informs category strategy and supports spend analysis and supplier assessment.
Sample question from this domain above: Q2
Produce category hierarchies for direct and indirect expenditures and apply portfolio tools to map expenditure categories. Create total cost models, conduct stakeholder needs analysis, form cross-functional teams with clear RACI roles, and review implications of legislative requirements and standards before implementing category management.
Sample question from this domain above: Q4
Analyse industry dynamics, competitiveness and pricing behaviour of suppliers. Assess financial data on potential suppliers and use requests for information to evaluate market factors. Conduct impact assessments of corporate social responsibility and sustainability, perform supply chain and value chain analysis, and understand supplier perceptions to inform category strategy.
Sample question from this domain above: Q5
Common questions about the exam itself
