Councils spend more than £300k purchasing tech

A new study has revealed the scale of the margins some buyers are paying out to IT resellers, with local councils wasting ‘jaw-dropping’ sums of money when purchasing IT.   

Analysis conducted by technology services provider Proband on more than £12 million worth of tech spending across 20 sectors over a two-year period highlighted the staggering mark-ups organisations are paying to suppliers.

The Society of IT Managers maintains that organisations should not be paying more than a three per cent margin to suppliers. However, the average margin paid by local councils was found to be 11.39 per cent - almost four times the recommended mark-up.

The IT Product Margins Report 2019 also found that local councils spent an average total of £3,080,609.09 per year on technology products. However, had they followed best practice and purchased products with a margin of no more than three per cent, local councils could have saved a whopping £314,950.92.

Ian Nethercot, MCIPS supply chain director at Probrand, said: “IT buyers are fundamentally not getting the deals they expect or deserve.  The volatility and complexity of the market, with a dose of human intervention in between, is seeing IT budgets unknowingly wasted. Buyers are also consuming vast swathes of time doing their level best to manually get quotes, compare and negotiate discounts.

“We believe it is time for a change, buyers demand fair deals from an open and transparent market and that is exactly what the industry needs to deliver.  Ultimately, it will help IT procurers save time and unlock more IT for their money.”