Road transport organisations are wasting millions of pounds on IT purchases as buyers struggle to achieve best value and transparency on purchases amidst a highly volatile IT marketplace, according to a survey by ICT benchmarking tool Mercato ITelligence.
The research found that 81% of organisations aren’t getting the deal they thought they were and some are paying margins up to 474% on specific items.
And with the total UK IT spend estimated at over £100BN, organisations are unwittingly wasting considerable amounts of money. The research found that the public sector is a regular loser when it comes to securing genuine best value.
At a time when organisations are striving for more efficient methods of securing best value across all purchases, Mercato ITellignce has concluded that buyers need to better police their supplier agreements and spot-check purchases to ensure best value purchase after purchase.
But the research found that buyers rarely manage to find a genuine benchmark price on products as the market is so volatile and this means they cannot negotiate price down as effectively with suppliers.
The Mercato ITelligence survey evaluated over 1,000 organisations with a budget over £50,000 and perceived supplier relationships of between cost +3-5%. The survey took regular purchase product prices from each organisation and compared them with trade guide price and current stock levels. Organisations across myriad *sectors were found to be consistently paying anything but pre-agreed or perceived margins.
Mercato Head of Benchmarking, Al Nagar, said: "Negotiating best price on every purchase is a necessity in the modern economy but a volatile market where price and stock change regularly is challenging buyers looking for value on every purchase. At the core of this issue is that buyers rarely manage to find and use validated trade price as a ‘bartering’ tool with suppliers.
"As a champion of fair deals for IT buyers, Mercato ITelligence has demonstrated that IT deals are not as sharp as buyers want or perceive them to be. ICT bought at better prices will enable a buyer to stretch the reach of their budget to get more or better ICT for the same money. This means higher volume for the supplier and better fairer deals for the buyer. A win win.
"Organisations are overspending on their IT as a result of the radically fast moving market and this is hitting bottom lines at a time when many are fighting to become more efficient.
"For genuine best value, buyers need to police and benchmark purchases. This is particularly the case in the public sector, where we found almost all of those surveyed were paying over their agreed margins."