The UK’s housing providers top a list of organisations paying over the odds for software from their IT resellers, according to new research from Mercato. The benchmarking company found that housing providers are paying exorbitant margins of up to seven times (731%) more than their resellers’ original costs, with the average margin being 36 per cent.
In comparison, the NHS paid average margins of around 28 per cent (max. 231%), insurance companies 22 per cent (max. 368%) and banks 19 per cent (max. 82%). According to SOCITM, a 3 per cent margin paid for ICT products is the benchmark of good practice.
Al Nagar, head of benchmarking, Mercato, said, “Buyers need to monitor and benchmark prices to negotiate the best price with suppliers as ICT bought at better prices will allow budgets to be stretched.
“Organisations could gain more and better ICT for the same money. This means higher volume for the supplier and fairer deals for the buyers.”
Mercato research shows that 81 per cent of companies do not secure best value when they buy ICT products, with market volatility making it difficult for buyers to gather data and find the optimum price.
Nagar said, “It is clear from our research that IT buyers are finding it difficult to obtain and manage comparative data on ICT product costs, particularly in a market where price and stock change daily. Without this comparative data to compare quotes against, buyers are struggling to achieve the target margin of 3 per cent.”