Charities paying five times too much for information technology

According to a new survey from Mercato Solutions, charities are paying an average of five times more than the industry standard for IT products.

Using Mercato’s KnowledgeBus IT application, the study benchmarked a number of purchases made by charities against trade guide prices. Results showed that the average margin on these purchases was 18%, much higher than the recommended industry standard of just 3%.

The survey covered a range of sectors, from insurance and finance to retail and leisure. Charities ranked 10th place in a league table of those securing consistently poor value on IT product purchases.

Mercato’s head of benchmarking, Al Nagar, said: “The latest results show that Charities are amongst many other sectors struggling to secure consistent best value on IT purchase and clearly need to take significant steps to reduce the margins they pay.  Margins of 18% are still well adrift of 3% best practice and charities should look to achieve greater transparency of relationships with suppliers.”

“Without validated comparative data, buyers are struggling to achieve a 3% margin. Data is the key and with access to up-to-date information, procurers can gather the knowledge they need to negotiate better deals with IT suppliers and get more from their IT budgets in 2014.”

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