Mears Group is using an online procurement tool from Mercato to make it easier and faster to buy new technologies with greater cost transparency and better certainty of the final prices.
Mears Group has grown rapidly through acquisitions, and every time a new company is brought into the group, the IT team needs to react quickly to bring the business on board. To meet this requirement, Mears wanted to be able to buy IT equipment at a moment’s notice, but at the same time ensure that the group was getting the best price.
John Brett, IT director, Mears Group, said, “We often have the situation where we have numerous contract mobilisations starting in the same week. For example, in April 2016 we had 18 new mobilisations. We can’t just sit back and wait for the quotes to come in, and we also need to be confident that we are getting value.”
“As we get bigger, the scrutiny from shareholders is growing and I don’t want to be asked why we bought at X when we could have bought at Y. When external auditors carry out their reviews of our department, I can’t turn around and say ‘well, we have a really good relationship with a local supplier’. We need a better response.”
Mears’ IT team also found that when they discovered a good price on the internet, suppliers would often not have enough stock to fulfil the requirements.
Brett said, “If we need 1,000 Android phones, we don’t want to be sourcing them from different channels, at different prices and with different return policies. That’s what we call ‘dirty procurement’. We just want to know the product is available and that we are not compromising on cost.”
Mears decided to deploy Mercato Solutions’ KnowledgeBus, a benchmarking application for IT procurers that automates the comparison of purchases against daily trade guide-prices and stock-levels on over 150,000 ‘live’ products from more than 2,500 manufacturers.
Users simply input supplier product lists or conduct spot-checks to see what margin their supplier is proposing. A range of spend-analysis tools also help users identify, track and forecast market developments for more strategic procurement.
Within the first month of using KnowledgeBus, Mears’ IT team saved £40,000 on just one purchase of 2,000 smartphones.
Brett said, “We achieved our RoI immediately. There was scepticism at first, but after just one purchase, everyone was a convert. We quickly saw that we could buy 90 per cent of products cheaper using KnowledgeBus. When we reviewed past purchases, we also saw that one supplier had charged us a 45 per cent margin on an order of BlackBerrys. We took this up with them and received a retrospective credit note.
“We now don’t buy anything unless it has gone through the portal. The admin team were concerned this would add an extra step in the process but in reality, it saves them time because they can request suppliers’ quotes through the portal.
“We initially thought we would have to negotiate hard to get the prices displayed but the fact that the price is actually guaranteed has made a big difference. It means we no longer have to deal with rogue suppliers charging huge margins.”
Mears is now taking advantage of KnowledgeBus’ ability to identify price trends to determine when, and when not, to buy.
Brett said, “Product prices change all the time. We now know, for example, the price of an Android phone is likely to go up and down by 3 per cent in a fortnight and, furthermore, that the cost of a new mobile will plummet after six months. If we need something we won’t hang around forever, but KnowledgeBus allows us to ride out interim price increases. And for the day-to-day stuff, that’s great.”