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By | Paul Kunert 29th June 2016 09:32

This local council paid HOW MUCH for an SD card?!

Barmy burghers not the worst when it comes to price-padded procurement

An unnamed local council has entered the hall of shame for making the most eye-watering tech purchase of 2015 - coughing up a 1095 per cent margin on an SD memory card.

This is according to the annual poll of 200 procurement heads from 24 industries by pricing bench markers KnowledgeBus, which found average margins paid had actually fallen on the prior year, declining from 19.7 per cent to 17.6 per cent.

While the local council made the single most expensive buying mistake, on average municipal authorities paid average margins of 19 per cent on their commodity tech purchases, putting them on a par with telecoms and finance sectors.

Best practice guidance from the Society of IT Managers is that business and public sector buyers should on average concede no more than a three per cent margin to IT suppliers of commodity stuff.

Utility companies paid the highest average margins to tech suppliers, some 28 per cent on average, followed by further education at 25 per cent, oil at 24 per cent and then insurance and pharmaceuticals at 20 per cent.

Single purchase disasters also saw a telco fork out a 989 per cent margin on printer products and the NHS paying a 962 per cent mark up on peripherals.

Al Nagar, head of benchmarking at KnowledgBus, said organisation’s were getting better at negotiating Ts&Cs with suppliers but were still far off perceived best practices.

“The most extreme example of excessive margins are regularly found on those lower volume, spontaneous 'as and when’ purchases. These are typically unplanned purchases consisting of items such as memory sticks, power adapters and cables,” he said. ®

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