New research conducted by Mercato ITelligence on the purchase price of standard ICT products has revealed that law firms are paying margins of anywhere up to 145% when buying from suppliers. The average margin paid was 23% – considerably higher than the industry best practice rate of 3% recommended by SOCITM. With Gartner predicting £493 billion will be spent on ICT in Western Europe this year, it is clear many millions are being wasted by purchasing products at excessive prices.

The one consolation law firms can take is that there are other sectors where even higher margins are being paid. Here is the Top Ten (and apologies for formatting)…

Sector                                    Average Margin            Highest Margin
Housing Associations            36%                                           731%
Retail                                         35%                                           225%
NHS                                           28%                                           231%
Pharmaceutical                       28%                                           60%
University                                27%                                            557%
Legal                                      23%                                        145%
Insurance                                 22%                                           368%
Telecoms/Media                     19%                                           506%
Banks                                        19%                                            82%
Utility                                        17%                                            393%

 

Mercato research shows that 81% of organisations do not secure best value when they make investments in ICT.  Volatility in the market makes it difficult for buyers to gather data and find the optimum price. Mercato ITelligence has been proven to save organisations up to 24% on their IT spend. It is the only benchmarking tool approved for the government G-Cloud and is used by 30% of UK Police Forces, a number of Local Government organisations and an extensive amount of private sector businesses. www.mercatoITelligence.co.uk