Higher education paying way over the odds for tech

A new survey – Probrand’s IT Product Margins Report 2019 – says that the sector is spending almost £100,000 more than necessary

Higher education organisations are paying significantly over the odds for technology products, according to a new survey.

IT Product Margins Report 2019, conducted by technology services provider, Probrand,  finds that the sector is giving £98,000 more than necessary to IT resellers.

It is a question of inflated margins, says Probrand. While the Society of IT Managers recommends that organisations pay no more than a 3% margin to suppliers, the poll found that the average spent by HE institutions came to 10.28%

One of the most extreme examples concerned a USB-C charge cable. Listed at a channel price of £1.88, the buyer paid £25.95 for the two-metre lead, equating to a 1,280% mark-up.

IT buyers are fundamentally not getting the deals they expect or deserve.
 – Ian Nethercot, Probrand

Probrand’s survey covered a two-year period, in which it analysed more than more than £12 million worth of technology spending across 20 sectors.

“1,200% profit has never been deemed fair and equitable for any product purchase, and IT buyers are fundamentally not getting the deals they expect or deserve,” said Ian Nethercot, Probrand’s MCIPS supply chain director.

The problem was compounded, said the report, by vendors exploiting Brexit-related uncertainties to increase prices.

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“The volatility and complexity of the market, with a dose of human intervention in between, is seeing IT budgets unknowingly wasted,” added Nethercot.

“Buyers are also consuming vast swathes of time doing their level best to manually get quotes, compare and negotiate discounts.

“We believe it is time for a change, buyers demand fair deals from an open and transparent market and that is exactly what the industry needs to deliver.  Ultimately, it will help IT procurers save time and unlock more IT for their money.”

To that end, the report – which can be seen in full here – also recommends a number of steps that can be taken to avoid IT procurement overspend.


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