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NHS & Universities Paying Up to 731 Per Cent Margins on ICT Buys

Organisations are continually paying extortionate margins when purchasing ICT products, a recent study by Mercato ITelligence - the benchmarking tool employed by the government's G-Cloud and over a quarter of U.K. police forces - has revealed.

With many economies stymied by slow growth for the foreseeable future, firms are looking to increase their use of technology in order to provide efficiencies; it is estimated £493 billion will be spent on ICT in Western Europe this year.

Yet research shows that 81 per cent of buyers fail to obtain best value standard investments, and sometimes pay margins of up to 731 per cent - a peculiar statistic given the ostensive cost-cutting motivation of such outlays on digital infrastructure.

Both the public and private sector are subject to the negative trend, with housing associations, universities and the NHS among those achieving the worst value for money. Figures show that both the NHS and pharmaceutical industry pay an average margin of 28 per cent, while housing associations and the retail sector are the worst hit, paying 36 and 35 per cent over the odds respectively.

Mercato's Head of Benchmarking, Al Nagar, ventures that the unpredictability of the market is one factor impinging on the ability of firms to obtain optimal pricing, adding that there are ways for both suppliers and procurers to benefit from fairer arrangements.

"Organisations are overspending on their IT as a result of the radically fast moving market. This is hitting bottom lines at a time when many are fighting to become more efficient. [They] could gain more and better ICT for the same money. This means higher volume for the supplier and better deals for the buyer," he said.

Source: National Computing Centre