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