And with Windows 8 capability, IT procurement professionals could soon be using smart phones to automatically benchmark purchases against price and stock on over 150,000 products whilst on the move.

Benchmarking ICT purchases commonly forms part of a best practice procurement process and consists of identifying what the buyer believes is trade price for a product and then manually requesting and comparing supplier quotes to pinpoint the one that offers best value.

The Society of IT Managers Annual IT Trend survey defined 3% margin as the benchmark of good practice for ICT products.

However, IT margin research has demonstrated buyers attempting to conduct manual benchmarking activity on thousands of products across the highly volatile IT market, where price and stock change rapidly, are wasting £millions on over inflated margins.

Mercato Solutions Head of Benchmarking, Al Nagar, said: “Buyers have the issue of finding and validating trade price on every product every day. On top of that, the volatile IT market dictates that the benchmark price they found manually will probably have changed by the time they come to compare against it."

“It’s easy to see why 8 in 10 organisations aren’t getting the deals they thought they were.”

IT Edition saves buyers time and money by automating the benchmarking process and providing validated trade guide price and stock alerts to facilitate negotiation of better deals with suppliers.

Version 3 of this IT buyers tool has been designed to deliver the next generation of rapid benchmarking with a rich tile based User Interface that shares a lot of information in a small space.

This radical new user-defined single market view can present products, lists, spend analyses, global raw material prices, exchange rates, subscribed framework pricing, top industry news and auto alerts on one screen.

Users simply import product lists or spot checks online for an automated comparison with trade guide price and stock on over 150,000 ‘live’ products from more than 2,500 manufacturers. Integration with ERP systems and automated Request For Quotations (RFQs) shorten the buy process and collaborative functionality helps reduce duplicated effort across departments and organisations.

Further access to a Big Data archive of 600,000 products enables historical interrogation of price and stock levels for plotting trends over time. “Put simply, this CIPS accredited technology gives IT buyers the information they need to drive down the cost of buying IT and unlock more informed and strategic procurement practice, saving time and money,” Nagar concludes. Mercato technology offers Chartered Institute of Purchase & Supply (CIPS) accredited ‘procurement excellence’. It has been approved as offering ‘Best Practice Best Value’ by the Institute of Chartered Accountants for delivering cashable savings and is the only benchmarking tool listed on the Government’s CloudStore.

Research: Mercato has conducted two surveys across 150 ICT managers with annual budgets of over £50,000 in its study of ICT purchases. 1) *81% of organisations aren’t getting the IT deals they expected:

  • Large UK brewery paying an average margin of cost +35% on a £500k budget
  • A large charity paying fluctuating margins between +10% and +100%
  • Major Hospital an average of cost +27%
  • A Midlands Council up to 54% above cost on a budget of £6M
  • One financial services PLC paid a margin of +41% on its top 150 standard purchases. On one bulk purchase of memory it paid £11,000 over their pre-agreed margin
  • A big brand Insurance company was found to have paid £125,000 over its agreed margin in a year
  • A leading airport cost +20% on many consumable items
  • In retail, a top sports fashion house paid an average cost +76% and cost +474% on some very specific, high value rare purchase items
  • North East utility company found they were overpaying by £25-£35K per month

2) **Top Ten average margins by sector


Average Margin

Highest Margin

Housing Associations