RISKS & BENEFITS OF SUPPLIER CONSOLIDATION IN IT PROCUREMENT

Markit
MarkitMarkit

Carefully assessing the risks and advantages of supplier consolidation is crucial to determine whether the benefits outweigh the potential downsides in your unique IT procurement situation. This report provides a comprehensive view of both viewpoints and explains how marketplaces can be leveraged to maximize the advantages of consolidation.

RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
SEPTEMBER 2023
Carefully assessing the risks and advantages of supplier consolidation is crucial to
determine whether the benefits outweigh the potential downsides in your unique IT
procurement situation. This report provides a comprehensive view of both viewpoints
and explains how marketplaces can be leveraged to maximize the advantages of
consolidation.
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
WWW.MARKIT.EU 2 SEPTEMBER 2023
CONTENTS
BENEFITS OF CONSOLIDATING IT SUPPLIERS				 4
1. STREAMLINED PROCUREMENT PROCESS				5
2. COST SAVINGS									5
3. ENHANCED NEGOTIATION POWER					5
4. IMPROVED SUPPLIER RELATIONSHIP					5
5. REDUCED ADMINISTRATIVE BURDEN					6
6. STANDARDISATION AND COMPATIBILITY				6
7. CENTRALISED SUPPORT AND MAINTENANCE			 6
8. SIMPLIFIED TRAINING AND FAMILIARITY				 7
9. REDUCED VENDOR MANAGEMENT COMPLEXITY		 7
10. ENHANCED STRATEGIC PARTNERSHIP				7
RISKS OF CONSOLIDATING IT SUPPLIERS					 8
1. REDUCED PRODUCT DIVERSITY						9
2. DEPENDENCY ON A SINGLE SUPPLIER				 9
3. POTENTIAL FOR LIMITED INNOVATION				 9
4. LESS COMPETITIVE PRICING						9
5. SERVICE QUALITY AND RESPONSIVENESS				 10
6. LIMITED FLEXIBILITY AND CUSTOMISATION			 10
7. RELIANCE ON A SINGLE POINT OF FAILURE			 10
8. DIFFICULTY IN VENDOR TRANSITION					11
9. COMPLIANCE AND RISK MANAGEMENT				 11
10. LOSS OF SPECIALISED EXPERTISE					11
CONCLUSION										12
SEPTEMBER 2023
WWW.MARKIT.EU 3
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
Supplier consolidation, otherwise known as vendor consolidation, is a supply chain
management strategy for reducing the number of companies you buy your goods from.
Consolidating suppliers in IT procurement can have both advantages and disadvantages.
In this report we outline acknowledged risks and benefits.
Additionally, we transparently address each point from the perspective of companies
evaluating Markit’s IT marketplace as their potential sole, or main, supplier of IT hard-
ware and/or accessories.
SEPTEMBER 2023
WWW.MARKIT.EU 4
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
BENEFITS OF CONSOLIDATING IT SUPPLIERS
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
WWW.MARKIT.EU 5 SEPTEMBER 2023
1. Streamlined Procurement Process
Dealing with a single supplier simplifies the procurement process. There is no need to manage multiple
relationships, negotiate separate contracts, or coordinate various orders.
2. Cost Savings
Consolidating suppliers can potentially lead to cost savings. By leveraging volume discounts, the organi-
sation can negotiate better pricing terms and reduce overall procurement costs.
In 2022, Markit clients saved an average of 10.3% against market average prices.
For more savings information see the Markit Fact Sheet 2023.
3. Enhanced Negotiation Power
With a consolidated supplier, the organisation gains stronger negotiation power. By consolidating pur-
chasing power, you can negotiate more favourable terms, including better pricing, warranties, service
levels, and support.
Due to Markit’s strong relationships with leading IT vendors and distributors, clients often secure special
bid pricing internationally and tailored service level agreements.
Read our partner success stories and how they help clients save time and money.
4. Improved Supplier Relationship
Focusing on a single supplier allows you to build a stronger relationship. This can result in improved com-
munication, better understanding of your organisation’s needs, and more personalised service.
At Markit we pride ourselves on listening carefully to our client’s needs, understanding their challenges,
and identifying opportunities for ongoing time and money savings. Dedicated account managers and
client support for key accounts are one of the reasons our Net Promoter Score in 2022 was a world class
78.1.
SEPTEMBER 2023
WWW.MARKIT.EU 6
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
5. Reduced Administrative Burden
Dealing with a single supplier simplifies administrative tasks, such as vendor management, invoicing,
and contract renewals. It minimises the time and effort required for paperwork and documentation.
It depends on the IT procurement systems you are currently using but many Markit clients have reported
time savings of 80-90% after consolidation. Various client success stories are available on our website.
6. Standardisation and Compatibility
Consolidation enables the organisation to standardise its IT infrastructure and ensure compatibility
among various products. This can lead to better integration, interoperability, and overall system
efficiency.
Our inhouse development team has 20 years’ experience integrating with client systems and
customising solutions for maximum client benefit. Punchout and other business system integrations,
tailoring catalogue contents, favourite lists, user defined roles and budget limits are some of the
typical features employed to ensure Markit works seamlessly alongside the client’s current IT
procurement system and processes.
7. Centralised Support and Maintenance
With a single supplier, support and maintenance responsibilities are consolidated. This can result in
streamlined processes for issue resolution, updates, upgrades, and maintenance, reducing complexity
and downtime.
Markit’s international client support team offers phone, email, and chat support in numerous languages.
In 2022, RMA incidence was just 0.3% and the average RMA resolution time was 23 days. Hands on, pro-
active account managers mean that potential flashpoints are spotted before they even become an issue.
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
WWW.MARKIT.EU 7 SEPTEMBER 2023
8. Simplified Training and Familiarity
Having a single supplier means employees only need to familiarise themselves with one set of products,
which simplifies training and reduces the learning curve. This can enhance productivity and efficiency
within the organisation.
Onboarding Markit is a simple and efficient process that is conducted by specialist client support and
account managers. Markit has onboarded hundreds of multinational companies in a wide variety of lan-
guages.
9. Reduced Vendor Management Complexity
Consolidating suppliers reduces the complexity of managing multiple vendors, including contract nego-
tiations, compliance monitoring, and performance evaluations. It frees up time and resources for other
strategic initiatives.
10. Enhanced Strategic Partnership
By working closely with a single supplier, you can develop a strategic partnership focused on long-term
goals. This can facilitate collaboration, innovation, and customised solutions tailored to your organisa-
tion’s specific needs.
At our core is a commitment to help clients succeed in saving time and money on purchasing their IT
hardware and accessories. With operations in 43 countries and over 20 years’ experience we do not just
maintain client relationships, we optimise and expand them. It is worth noting that 15 companies
ordered from Markit on the day its doors opened and 14 are still clients today, 20 years later.
SEPTEMBER 2023
WWW.MARKIT.EU 8
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
RISKS OF CONSOLIDATING IT SUPPLIERS
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
WWW.MARKIT.EU 9 SEPTEMBER 2023
1. Reduced Product Diversity
Whilst a consolidated supplier may offer a wide range of products, there might be limitations in terms of
product diversity compared to multiple specialised suppliers. This could limit the availability of niche or
specialised products.
Markit is the largest B2B IT hardware and accessory marketplace in the world, with over 5M unique SKUs
and more being added all time. Our geographic expansion (typically 3-5 countries per year currently) and
partnership with the world largest and most specialist IT distributors means product diversity is simply a
non-issue with Markit. In fact, it is quite the opposite, clients can find (almost) any device that has been
made.
2. Dependency on a Single Supplier
Relying on a single supplier poses the risk of dependency. If the supplier faces financial, logistical, or
quality issues, it could significantly impact your organisation’s operations and ability to access necessary
IT products and services.
Markit client orders are delivered direct from distribution and there are always several supply options for
each product so if (rare) delivery or stock availability issues arise they are plenty of contingency supply
options. Markit has a solid track recorded and is both financially and technically solid.
Read more about Markit’s financial status on our website.
3. Potential for Limited Innovation
Consolidating suppliers may limit exposure to recent technologies and innovative solutions offered by
different vendors. It might be challenging for a single supplier to keep pace with the rapid advancements
in the IT industry across all product categories.
Markit is underpinned by a highly experienced and dedicated software development team, who con-
stantly look for ways to improve the ways we can save clients time and money on their IT procurement
goals. Markit is currently investing approximately one million euros annually with a focus on cloud mi-
gration and automation.
4. Less Competitive Pricing
While there may be cost savings through consolidation, relying on a single supplier could reduce compet-
itive pressure, potentially leading to less aggressive pricing. The absence of competition among suppliers
may result in higher prices eventually.
SEPTEMBER 2023
WWW.MARKIT.EU 10
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
One of the most compelling factors clients cite as having influenced their decision to buy their IT hard-
ware and accessories through the Markit IT marketplace is our pricing model. Transparent real-time
price comparisons (and real-time stock availability) are offered for each product. The instantly compara-
ble prices shown are the prices “direct from distribution” plus an additional margin, pre-agreed with the
client. in 2022, clients saved an average of 10.3% against market average prices.
5. Service Quality and Responsiveness
With a single supplier, there is a risk that service quality and responsiveness may decline. The supplier
may prioritise larger clients or struggle to handle increased demand due to the consolidated customer
base.
“Helping clients succeed” isn’t just a catchphrase. It means supporting our clients at every level with
dedicated client support and account management. Our net Promoter Score of 78.6 in 2022 speaks vol-
umes about how highly our clients value Markit’s service level.
6. Limited Flexibility and Customisation
A consolidated supplier may have limitations in terms of flexibility and customisation compared to
specialised suppliers. They may not be able to offer tailored solutions that address unique or specific
organisational requirements.
Markit is a “consolidate supplier” to many multinationals but at the same time we are very much a spe-
cialist. Once again “helping clients succeed” methodology; a core of experienced developers & business
system integration experts; and attentive, proactive account managers all add up to deliver tailored
solutions for each client. Every client has unique circumstances, challenges, and goals and thanks to 20
years of experience we have encountered the vast majority of them before. Markit is uniquely flexible
because we must be, to consistently deliver time and money savings, year in, year out.
7. Reliance on a Single Point of Failure
Consolidating suppliers creates a single point of failure. If the supplier experiences disruptions, such as
system outages, delivery delays, or product shortages, it could have a severe impact on your
organisation’s operations.
Markit services are running on Azure and in a private cloud. We aim for 99.99% uptime for all core ser-
vices. Uptime was 99.97-99.99 during the past 12 months. The Markit marketplace displays real time
stock availability. The average delivery time per order in 2022 was 3.9 days which includes cross border
deliveries. Intra-country deliveries are often made within 48 hours. With stock offered direct from 350 of
the world’s largest IT distributors it is extremely unlikely that availability ever becomes an issue.
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
WWW.MARKIT.EU 11 SEPTEMBER 2023
In addition, during the Covid-19 crisis markit established a special cross border catalogue to allow clients
not just to see real time stock levels in their country but also across the entire European Union. When
stocks are unavailable locally, the account managers help clients find the required products in a nearby
country and handle the cross-border delivery issues promptly.
8. Difficulty in Vendor Transition
Transitioning from multiple suppliers to a single supplier can be challenging and time-consuming. The
migration process may involve data migration, system integration, and training, which can result in dis-
ruptions and potential productivity losses.
In our experience at Markit we see the transition is best conducted in a phased manner where confi-
dence builds step by step. Category by category, and country by country rollouts with proof-of-concept
are recommended, rather than attempting to switch all in one hit.
9. Compliance and Risk Management
Depending on a single supplier introduces concentration risk, as any issues with the supplier could have
a significant impact on your organisation’s compliance and risk management efforts. Diversifying sup-
pliers helps distribute risk across multiple providers.
At Markit, compliance and other risk concerns are addressed on an individual basis and special focus is
placed on potential issues identified in RFPs and the business case development process.
10. Loss of Specialised Expertise
Specialised suppliers often possess in-depth knowledge and expertise in specific products or technol-
ogies. By consolidating suppliers, you might lose access to the unique insights and specialised support
provided by these niche vendors.
Our employees (Markiteers) include a variety of IT experts who attend industry and vendor trainings
and certification programs. Product knowledge is a key component of our ability to help our clients find,
compare, and select the right items to serve their needs. With a direct line to the top levels of the leading
IT vendors we can always get answers promptly if needed. Within Markit we also have brand specialists
who stay connected with the latest business developments, product innovations, and releases.
SEPTEMBER 2023
WWW.MARKIT.EU 12
RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
FOR IT PROCUREMENT
CONCLUSION
It is important to carefully evaluate these risks and benefits to determine whether the benefits of con-
solidation outweigh the potential drawbacks in your specific IT procurement scenario.
We can help with that evaluation in a professional and transparent way.
In general marketplaces can be a helpful solution to maximising the benefits (and reducing the risks) of
IT supplier consolidation but... not all marketplaces are created equally.
To find about more about whether the Markit IT marketplace is an IT procurement solution you should
consider please read our white paper on the topic:
Optimising Indirect Procurement with Marketplaces
... or contact Jon Kolasinski, Head of Countries on +48 500 206 227 / jon.kolasinski@markit.eu
Follow Markit news and views on our blog, LinkedIn, Twitter & SlideShare
Copyright © 2023 Markit Holding AS
This report is made available under the Creative Commons Attribution-ShareAlike License.
TAKE THE CHASING
OUT OF IT PURCHASING
WWW.MARKIT.EU
MARKIT IS A GLOBALLY RECOGNISED IT
PROCUREMENT MARKETPLACE
Thousands of international companies across 6 continents are saving
considerable amounts of time and money by sourcing and buying
their IT hardware and accessories through Markit’s IT marketplace
and procurement solution.
Markit clients compare prices and delivery times in real time in our
marketplace of over 5 million unique IT products. In 2022, they saved
an average of 10.3 % on average market prices and thousands of
hours by using Markit to manage, centralize, and streamline their IT
purchasing.
Founded in Estonia in 2003, Markit is now working in 43 countries in
2023. In 2022, Markit’s revenue was 217.8 million euros.
If you would like to discuss your sustainable IT hardware and acces-
sory requirements, please contact:
		Jon Kolasinski
		 Head of Countries, Markit
		E-mail: jon.kolasinski@markit.eu
Markit has reached the World Procurement
Awards finals shortlist twice. We owe a huge
thank you to all our clients, partners, and
Markiteers who helped make our global
recognition possible.

Recommended

KEY PERFORMANCE INDICATORS IN IT PROCUREMENT by
KEY PERFORMANCE INDICATORS IN IT PROCUREMENTKEY PERFORMANCE INDICATORS IN IT PROCUREMENT
KEY PERFORMANCE INDICATORS IN IT PROCUREMENTMarkit
130 views29 slides
bolttech - Insurtech Innovation Award 2023 by
bolttech - Insurtech Innovation Award 2023bolttech - Insurtech Innovation Award 2023
bolttech - Insurtech Innovation Award 2023The Digital Insurer
119 views14 slides
INTERNATIONAL IT DEVICES PROCUREMENT OUTLOOK 2023 by
INTERNATIONAL IT DEVICES PROCUREMENT OUTLOOK 2023INTERNATIONAL IT DEVICES PROCUREMENT OUTLOOK 2023
INTERNATIONAL IT DEVICES PROCUREMENT OUTLOOK 2023Markit
195 views8 slides
Insurance Round Table by
Insurance Round TableInsurance Round Table
Insurance Round TableR3
967 views41 slides
Optimising time savings in indirect IT procurement by
Optimising time savings in indirect IT procurementOptimising time savings in indirect IT procurement
Optimising time savings in indirect IT procurementMarkit
402 views26 slides
SEB IT Purchasing Success Story by
SEB IT Purchasing Success StorySEB IT Purchasing Success Story
SEB IT Purchasing Success StoryMarkit
733 views2 slides

More Related Content

Similar to RISKS & BENEFITS OF SUPPLIER CONSOLIDATION IN IT PROCUREMENT

Tightening The Chain – Supply Chain Cost Cutting Strategies by
Tightening The Chain – Supply Chain Cost Cutting StrategiesTightening The Chain – Supply Chain Cost Cutting Strategies
Tightening The Chain – Supply Chain Cost Cutting StrategiesZubin Poonawalla
675 views4 slides
CIS_Presentation1.pptx by
CIS_Presentation1.pptxCIS_Presentation1.pptx
CIS_Presentation1.pptxSuresh Boga
10 views10 slides
HOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORY by
HOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORYHOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORY
HOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORYMarkit
261 views12 slides
Take The Highway To A Successful It Project by
Take The Highway To A Successful It ProjectTake The Highway To A Successful It Project
Take The Highway To A Successful It Projectsantosh singh
275 views30 slides
Five Steps to Recession Proof your FinOps Tech Stack.pptx by
Five Steps to Recession Proof your FinOps Tech Stack.pptxFive Steps to Recession Proof your FinOps Tech Stack.pptx
Five Steps to Recession Proof your FinOps Tech Stack.pptxDavid54779
23 views21 slides
Supply chain in Pakistan by
Supply chain in PakistanSupply chain in Pakistan
Supply chain in PakistanMuneeb Ahmed
696 views6 slides

Similar to RISKS & BENEFITS OF SUPPLIER CONSOLIDATION IN IT PROCUREMENT(20)

Tightening The Chain – Supply Chain Cost Cutting Strategies by Zubin Poonawalla
Tightening The Chain – Supply Chain Cost Cutting StrategiesTightening The Chain – Supply Chain Cost Cutting Strategies
Tightening The Chain – Supply Chain Cost Cutting Strategies
Zubin Poonawalla675 views
CIS_Presentation1.pptx by Suresh Boga
CIS_Presentation1.pptxCIS_Presentation1.pptx
CIS_Presentation1.pptx
Suresh Boga10 views
HOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORY by Markit
HOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORYHOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORY
HOW KEY PROCUREMENT PREDICTIONS FOR 2021 IMPACT THE INDIRECT IT CATEGORY
Markit261 views
Take The Highway To A Successful It Project by santosh singh
Take The Highway To A Successful It ProjectTake The Highway To A Successful It Project
Take The Highway To A Successful It Project
santosh singh275 views
Five Steps to Recession Proof your FinOps Tech Stack.pptx by David54779
Five Steps to Recession Proof your FinOps Tech Stack.pptxFive Steps to Recession Proof your FinOps Tech Stack.pptx
Five Steps to Recession Proof your FinOps Tech Stack.pptx
David5477923 views
Supply chain in Pakistan by Muneeb Ahmed
Supply chain in PakistanSupply chain in Pakistan
Supply chain in Pakistan
Muneeb Ahmed696 views
Unlocking the Performance Levers of Commercial Underwriting by Cognizant
Unlocking the Performance Levers of Commercial UnderwritingUnlocking the Performance Levers of Commercial Underwriting
Unlocking the Performance Levers of Commercial Underwriting
Cognizant2.9K views
Smb group top 10 smb tech trends 2015-final-1 by SMB Group
Smb group   top 10 smb tech trends 2015-final-1Smb group   top 10 smb tech trends 2015-final-1
Smb group top 10 smb tech trends 2015-final-1
SMB Group7.8K views
Transforming Compliance and Fulfillment Communications by Broadridge
Transforming Compliance and Fulfillment CommunicationsTransforming Compliance and Fulfillment Communications
Transforming Compliance and Fulfillment Communications
Broadridge300 views
Reincarnating traditional infrastructure outsourcing by NIIT Technologies
Reincarnating traditional infrastructure outsourcingReincarnating traditional infrastructure outsourcing
Reincarnating traditional infrastructure outsourcing
NIIT Technologies886 views
Preview novarica1908 eb-core-business_case by ~Eric Principe
Preview novarica1908 eb-core-business_casePreview novarica1908 eb-core-business_case
Preview novarica1908 eb-core-business_case
~Eric Principe25 views
Mis.covisint by Sandz1234
Mis.covisintMis.covisint
Mis.covisint
Sandz12341.1K views
T Bytes Digital customer experience by EGBG Services
T Bytes Digital customer experienceT Bytes Digital customer experience
T Bytes Digital customer experience
EGBG Services 158 views
Microsoft2009SMBInsightsReport (1) by MidMarket Place
Microsoft2009SMBInsightsReport (1)Microsoft2009SMBInsightsReport (1)
Microsoft2009SMBInsightsReport (1)
MidMarket Place398 views
Drive Business Excellence with Outcomes-Based Contracting: The OBC Toolkit by CAST
Drive Business Excellence with Outcomes-Based Contracting: The OBC ToolkitDrive Business Excellence with Outcomes-Based Contracting: The OBC Toolkit
Drive Business Excellence with Outcomes-Based Contracting: The OBC Toolkit
CAST975 views
MindTree Considers Leading Enterprise Contract Management Software by Icertis
MindTree Considers Leading Enterprise Contract Management SoftwareMindTree Considers Leading Enterprise Contract Management Software
MindTree Considers Leading Enterprise Contract Management Software
Icertis559 views

More from Markit

Optimising punchout for IT procurement by
Optimising punchout for IT procurementOptimising punchout for IT procurement
Optimising punchout for IT procurementMarkit
87 views11 slides
Danone IT procurement success story by
Danone  IT procurement success storyDanone  IT procurement success story
Danone IT procurement success storyMarkit
115 views2 slides
Markit-Lenovo IT Procurement Success Story 2023 by
Markit-Lenovo IT Procurement Success Story 2023Markit-Lenovo IT Procurement Success Story 2023
Markit-Lenovo IT Procurement Success Story 2023Markit
67 views2 slides
AB / Markit Partner Success Story by
AB / Markit Partner Success StoryAB / Markit Partner Success Story
AB / Markit Partner Success StoryMarkit
33 views4 slides
12 IT Procurement Success Stories by
12 IT Procurement Success Stories12 IT Procurement Success Stories
12 IT Procurement Success StoriesMarkit
203 views16 slides
HP & Markit partner success story 2022 by
HP & Markit partner success story 2022HP & Markit partner success story 2022
HP & Markit partner success story 2022Markit
47 views3 slides

More from Markit(20)

Optimising punchout for IT procurement by Markit
Optimising punchout for IT procurementOptimising punchout for IT procurement
Optimising punchout for IT procurement
Markit87 views
Danone IT procurement success story by Markit
Danone  IT procurement success storyDanone  IT procurement success story
Danone IT procurement success story
Markit115 views
Markit-Lenovo IT Procurement Success Story 2023 by Markit
Markit-Lenovo IT Procurement Success Story 2023Markit-Lenovo IT Procurement Success Story 2023
Markit-Lenovo IT Procurement Success Story 2023
Markit67 views
AB / Markit Partner Success Story by Markit
AB / Markit Partner Success StoryAB / Markit Partner Success Story
AB / Markit Partner Success Story
Markit33 views
12 IT Procurement Success Stories by Markit
12 IT Procurement Success Stories12 IT Procurement Success Stories
12 IT Procurement Success Stories
Markit203 views
HP & Markit partner success story 2022 by Markit
HP & Markit partner success story 2022HP & Markit partner success story 2022
HP & Markit partner success story 2022
Markit47 views
1WorldSync & Markit Success Story by Markit
1WorldSync & Markit Success  Story1WorldSync & Markit Success  Story
1WorldSync & Markit Success Story
Markit183 views
Markit Fact Sheet 2022 by Markit
Markit Fact Sheet 2022Markit Fact Sheet 2022
Markit Fact Sheet 2022
Markit433 views
GREENER IT HARDWARE & ACCESSORY SOURCING by Markit
GREENER IT HARDWARE & ACCESSORY SOURCINGGREENER IT HARDWARE & ACCESSORY SOURCING
GREENER IT HARDWARE & ACCESSORY SOURCING
Markit441 views
Greentube IT Procurement Success Story by Markit
Greentube IT Procurement Success StoryGreentube IT Procurement Success Story
Greentube IT Procurement Success Story
Markit268 views
Satisfying procurement priorities in fast growing companies 2021 by Markit
Satisfying procurement priorities in fast growing companies 2021Satisfying procurement priorities in fast growing companies 2021
Satisfying procurement priorities in fast growing companies 2021
Markit299 views
Markit Fact Sheet 2020 by Markit
Markit Fact Sheet 2020Markit Fact Sheet 2020
Markit Fact Sheet 2020
Markit1K views
Alantra IT Procurement & Purchasing Time Savings Success Story by Markit
Alantra IT Procurement & Purchasing Time Savings Success StoryAlantra IT Procurement & Purchasing Time Savings Success Story
Alantra IT Procurement & Purchasing Time Savings Success Story
Markit236 views
Marketplace as a Supplier - Transforming Indirect Procurement by Markit
Marketplace as a Supplier - Transforming Indirect ProcurementMarketplace as a Supplier - Transforming Indirect Procurement
Marketplace as a Supplier - Transforming Indirect Procurement
Markit352 views
Optimising Indirect Procurement With Marketplaces by Markit
Optimising Indirect Procurement With MarketplacesOptimising Indirect Procurement With Marketplaces
Optimising Indirect Procurement With Marketplaces
Markit729 views
Innofactor IT Procurement Success Story by Markit
Innofactor IT Procurement Success StoryInnofactor IT Procurement Success Story
Innofactor IT Procurement Success Story
Markit507 views
Microline IT Distribution Success Story by Markit
Microline IT Distribution Success StoryMicroline IT Distribution Success Story
Microline IT Distribution Success Story
Markit421 views
The Indirect IT Procurement Dilemma - Solved by Markit
The Indirect IT Procurement Dilemma - SolvedThe Indirect IT Procurement Dilemma - Solved
The Indirect IT Procurement Dilemma - Solved
Markit416 views
Ingram Micro IT Distribution Success Story by Markit
Ingram Micro IT Distribution Success StoryIngram Micro IT Distribution Success Story
Ingram Micro IT Distribution Success Story
Markit491 views
Also IT Distributor Success Story by Markit
Also IT Distributor Success StoryAlso IT Distributor Success Story
Also IT Distributor Success Story
Markit305 views

Recently uploaded

Irigoyen_231129 - Around the world in 5 questions.pdf by
Irigoyen_231129 - Around the world in 5 questions.pdfIrigoyen_231129 - Around the world in 5 questions.pdf
Irigoyen_231129 - Around the world in 5 questions.pdfbradgallagher6
16 views38 slides
Nevigating Sucess.pdf by
Nevigating Sucess.pdfNevigating Sucess.pdf
Nevigating Sucess.pdfTEWMAGAZINE
28 views4 slides
Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer... by
Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer...Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer...
Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer...bradgallagher6
25 views37 slides
23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf by
23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf
23.12.07 Bloomerang - 2023-12-06 21.39.56.pdfBloomerang
118 views88 slides
Mistakes Young Entrepreneurs Make When Approaching Problem Solving by
Mistakes Young Entrepreneurs Make When Approaching Problem SolvingMistakes Young Entrepreneurs Make When Approaching Problem Solving
Mistakes Young Entrepreneurs Make When Approaching Problem SolvingYasser Takie Eddine Abdesselam
72 views31 slides
yasin-ppt.pptx by
yasin-ppt.pptxyasin-ppt.pptx
yasin-ppt.pptxsamanolia75
21 views6 slides

Recently uploaded(20)

Irigoyen_231129 - Around the world in 5 questions.pdf by bradgallagher6
Irigoyen_231129 - Around the world in 5 questions.pdfIrigoyen_231129 - Around the world in 5 questions.pdf
Irigoyen_231129 - Around the world in 5 questions.pdf
bradgallagher616 views
Nevigating Sucess.pdf by TEWMAGAZINE
Nevigating Sucess.pdfNevigating Sucess.pdf
Nevigating Sucess.pdf
TEWMAGAZINE28 views
Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer... by bradgallagher6
Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer...Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer...
Taryn_Stejskal_The 5 Practices of Highly Resilient People 30 Nov 2023 Officer...
bradgallagher625 views
23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf by Bloomerang
23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf
23.12.07 Bloomerang - 2023-12-06 21.39.56.pdf
Bloomerang118 views
Engaging Senior Leaders to Accelerate Your Continuous Improvement Program by KaiNexus
Engaging Senior Leaders to Accelerate Your Continuous Improvement ProgramEngaging Senior Leaders to Accelerate Your Continuous Improvement Program
Engaging Senior Leaders to Accelerate Your Continuous Improvement Program
KaiNexus93 views
Navigating the Complexity of Derivatives Valuation 📈 by ValAdvisor
Navigating the Complexity of Derivatives Valuation 📈Navigating the Complexity of Derivatives Valuation 📈
Navigating the Complexity of Derivatives Valuation 📈
ValAdvisor17 views
The Truth About Customer Journey Mapping by Aggregage
The Truth About Customer Journey MappingThe Truth About Customer Journey Mapping
The Truth About Customer Journey Mapping
Aggregage134 views
Bloomerang_Forecasting Your Fundraising Revenue 2024.pptx.pdf by Bloomerang
Bloomerang_Forecasting Your Fundraising Revenue 2024.pptx.pdfBloomerang_Forecasting Your Fundraising Revenue 2024.pptx.pdf
Bloomerang_Forecasting Your Fundraising Revenue 2024.pptx.pdf
Bloomerang194 views
On the Concept of Discovery Power of Enterprise Modeling Languages and its Re... by Ilia Bider
On the Concept of Discovery Power of Enterprise Modeling Languages and its Re...On the Concept of Discovery Power of Enterprise Modeling Languages and its Re...
On the Concept of Discovery Power of Enterprise Modeling Languages and its Re...
Ilia Bider16 views
davood_keshavarz_david_keshavarz_criminal_conviction_prison_sentence_judgemen... by morshedislam3
davood_keshavarz_david_keshavarz_criminal_conviction_prison_sentence_judgemen...davood_keshavarz_david_keshavarz_criminal_conviction_prison_sentence_judgemen...
davood_keshavarz_david_keshavarz_criminal_conviction_prison_sentence_judgemen...
morshedislam322 views
2023 Tracking Volunteers in Bloomerang.pdf by Bloomerang
2023 Tracking Volunteers in Bloomerang.pdf2023 Tracking Volunteers in Bloomerang.pdf
2023 Tracking Volunteers in Bloomerang.pdf
Bloomerang25 views
3Q23_EN.pdf by irhcs
3Q23_EN.pdf3Q23_EN.pdf
3Q23_EN.pdf
irhcs17 views
Why are KPIs(key performance indicators) important? by Epixel MLM Software
Why are KPIs(key performance indicators) important? Why are KPIs(key performance indicators) important?
Why are KPIs(key performance indicators) important?
Promoting the SEO to the C-Suite by Ash Nallawalla
Promoting the SEO to the C-SuitePromoting the SEO to the C-Suite
Promoting the SEO to the C-Suite
Ash Nallawalla14 views
Better Appeals and Solicitations - Bloomerang.pdf by Bloomerang
Better Appeals and Solicitations - Bloomerang.pdfBetter Appeals and Solicitations - Bloomerang.pdf
Better Appeals and Solicitations - Bloomerang.pdf
Bloomerang119 views
The Talent Management Navigator Performance Management by Seta Wicaksana
The Talent Management Navigator Performance ManagementThe Talent Management Navigator Performance Management
The Talent Management Navigator Performance Management
Seta Wicaksana39 views

RISKS & BENEFITS OF SUPPLIER CONSOLIDATION IN IT PROCUREMENT

  • 1. RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT SEPTEMBER 2023 Carefully assessing the risks and advantages of supplier consolidation is crucial to determine whether the benefits outweigh the potential downsides in your unique IT procurement situation. This report provides a comprehensive view of both viewpoints and explains how marketplaces can be leveraged to maximize the advantages of consolidation.
  • 2. RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT WWW.MARKIT.EU 2 SEPTEMBER 2023 CONTENTS BENEFITS OF CONSOLIDATING IT SUPPLIERS 4 1. STREAMLINED PROCUREMENT PROCESS 5 2. COST SAVINGS 5 3. ENHANCED NEGOTIATION POWER 5 4. IMPROVED SUPPLIER RELATIONSHIP 5 5. REDUCED ADMINISTRATIVE BURDEN 6 6. STANDARDISATION AND COMPATIBILITY 6 7. CENTRALISED SUPPORT AND MAINTENANCE 6 8. SIMPLIFIED TRAINING AND FAMILIARITY 7 9. REDUCED VENDOR MANAGEMENT COMPLEXITY 7 10. ENHANCED STRATEGIC PARTNERSHIP 7 RISKS OF CONSOLIDATING IT SUPPLIERS 8 1. REDUCED PRODUCT DIVERSITY 9 2. DEPENDENCY ON A SINGLE SUPPLIER 9 3. POTENTIAL FOR LIMITED INNOVATION 9 4. LESS COMPETITIVE PRICING 9 5. SERVICE QUALITY AND RESPONSIVENESS 10 6. LIMITED FLEXIBILITY AND CUSTOMISATION 10 7. RELIANCE ON A SINGLE POINT OF FAILURE 10 8. DIFFICULTY IN VENDOR TRANSITION 11 9. COMPLIANCE AND RISK MANAGEMENT 11 10. LOSS OF SPECIALISED EXPERTISE 11 CONCLUSION 12
  • 3. SEPTEMBER 2023 WWW.MARKIT.EU 3 RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT Supplier consolidation, otherwise known as vendor consolidation, is a supply chain management strategy for reducing the number of companies you buy your goods from. Consolidating suppliers in IT procurement can have both advantages and disadvantages. In this report we outline acknowledged risks and benefits. Additionally, we transparently address each point from the perspective of companies evaluating Markit’s IT marketplace as their potential sole, or main, supplier of IT hard- ware and/or accessories.
  • 4. SEPTEMBER 2023 WWW.MARKIT.EU 4 RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT BENEFITS OF CONSOLIDATING IT SUPPLIERS
  • 5. RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT WWW.MARKIT.EU 5 SEPTEMBER 2023 1. Streamlined Procurement Process Dealing with a single supplier simplifies the procurement process. There is no need to manage multiple relationships, negotiate separate contracts, or coordinate various orders. 2. Cost Savings Consolidating suppliers can potentially lead to cost savings. By leveraging volume discounts, the organi- sation can negotiate better pricing terms and reduce overall procurement costs. In 2022, Markit clients saved an average of 10.3% against market average prices. For more savings information see the Markit Fact Sheet 2023. 3. Enhanced Negotiation Power With a consolidated supplier, the organisation gains stronger negotiation power. By consolidating pur- chasing power, you can negotiate more favourable terms, including better pricing, warranties, service levels, and support. Due to Markit’s strong relationships with leading IT vendors and distributors, clients often secure special bid pricing internationally and tailored service level agreements. Read our partner success stories and how they help clients save time and money. 4. Improved Supplier Relationship Focusing on a single supplier allows you to build a stronger relationship. This can result in improved com- munication, better understanding of your organisation’s needs, and more personalised service. At Markit we pride ourselves on listening carefully to our client’s needs, understanding their challenges, and identifying opportunities for ongoing time and money savings. Dedicated account managers and client support for key accounts are one of the reasons our Net Promoter Score in 2022 was a world class 78.1.
  • 6. SEPTEMBER 2023 WWW.MARKIT.EU 6 RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT 5. Reduced Administrative Burden Dealing with a single supplier simplifies administrative tasks, such as vendor management, invoicing, and contract renewals. It minimises the time and effort required for paperwork and documentation. It depends on the IT procurement systems you are currently using but many Markit clients have reported time savings of 80-90% after consolidation. Various client success stories are available on our website. 6. Standardisation and Compatibility Consolidation enables the organisation to standardise its IT infrastructure and ensure compatibility among various products. This can lead to better integration, interoperability, and overall system efficiency. Our inhouse development team has 20 years’ experience integrating with client systems and customising solutions for maximum client benefit. Punchout and other business system integrations, tailoring catalogue contents, favourite lists, user defined roles and budget limits are some of the typical features employed to ensure Markit works seamlessly alongside the client’s current IT procurement system and processes. 7. Centralised Support and Maintenance With a single supplier, support and maintenance responsibilities are consolidated. This can result in streamlined processes for issue resolution, updates, upgrades, and maintenance, reducing complexity and downtime. Markit’s international client support team offers phone, email, and chat support in numerous languages. In 2022, RMA incidence was just 0.3% and the average RMA resolution time was 23 days. Hands on, pro- active account managers mean that potential flashpoints are spotted before they even become an issue.
  • 7. RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT WWW.MARKIT.EU 7 SEPTEMBER 2023 8. Simplified Training and Familiarity Having a single supplier means employees only need to familiarise themselves with one set of products, which simplifies training and reduces the learning curve. This can enhance productivity and efficiency within the organisation. Onboarding Markit is a simple and efficient process that is conducted by specialist client support and account managers. Markit has onboarded hundreds of multinational companies in a wide variety of lan- guages. 9. Reduced Vendor Management Complexity Consolidating suppliers reduces the complexity of managing multiple vendors, including contract nego- tiations, compliance monitoring, and performance evaluations. It frees up time and resources for other strategic initiatives. 10. Enhanced Strategic Partnership By working closely with a single supplier, you can develop a strategic partnership focused on long-term goals. This can facilitate collaboration, innovation, and customised solutions tailored to your organisa- tion’s specific needs. At our core is a commitment to help clients succeed in saving time and money on purchasing their IT hardware and accessories. With operations in 43 countries and over 20 years’ experience we do not just maintain client relationships, we optimise and expand them. It is worth noting that 15 companies ordered from Markit on the day its doors opened and 14 are still clients today, 20 years later.
  • 8. SEPTEMBER 2023 WWW.MARKIT.EU 8 RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT RISKS OF CONSOLIDATING IT SUPPLIERS
  • 9. RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT WWW.MARKIT.EU 9 SEPTEMBER 2023 1. Reduced Product Diversity Whilst a consolidated supplier may offer a wide range of products, there might be limitations in terms of product diversity compared to multiple specialised suppliers. This could limit the availability of niche or specialised products. Markit is the largest B2B IT hardware and accessory marketplace in the world, with over 5M unique SKUs and more being added all time. Our geographic expansion (typically 3-5 countries per year currently) and partnership with the world largest and most specialist IT distributors means product diversity is simply a non-issue with Markit. In fact, it is quite the opposite, clients can find (almost) any device that has been made. 2. Dependency on a Single Supplier Relying on a single supplier poses the risk of dependency. If the supplier faces financial, logistical, or quality issues, it could significantly impact your organisation’s operations and ability to access necessary IT products and services. Markit client orders are delivered direct from distribution and there are always several supply options for each product so if (rare) delivery or stock availability issues arise they are plenty of contingency supply options. Markit has a solid track recorded and is both financially and technically solid. Read more about Markit’s financial status on our website. 3. Potential for Limited Innovation Consolidating suppliers may limit exposure to recent technologies and innovative solutions offered by different vendors. It might be challenging for a single supplier to keep pace with the rapid advancements in the IT industry across all product categories. Markit is underpinned by a highly experienced and dedicated software development team, who con- stantly look for ways to improve the ways we can save clients time and money on their IT procurement goals. Markit is currently investing approximately one million euros annually with a focus on cloud mi- gration and automation. 4. Less Competitive Pricing While there may be cost savings through consolidation, relying on a single supplier could reduce compet- itive pressure, potentially leading to less aggressive pricing. The absence of competition among suppliers may result in higher prices eventually.
  • 10. SEPTEMBER 2023 WWW.MARKIT.EU 10 RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT One of the most compelling factors clients cite as having influenced their decision to buy their IT hard- ware and accessories through the Markit IT marketplace is our pricing model. Transparent real-time price comparisons (and real-time stock availability) are offered for each product. The instantly compara- ble prices shown are the prices “direct from distribution” plus an additional margin, pre-agreed with the client. in 2022, clients saved an average of 10.3% against market average prices. 5. Service Quality and Responsiveness With a single supplier, there is a risk that service quality and responsiveness may decline. The supplier may prioritise larger clients or struggle to handle increased demand due to the consolidated customer base. “Helping clients succeed” isn’t just a catchphrase. It means supporting our clients at every level with dedicated client support and account management. Our net Promoter Score of 78.6 in 2022 speaks vol- umes about how highly our clients value Markit’s service level. 6. Limited Flexibility and Customisation A consolidated supplier may have limitations in terms of flexibility and customisation compared to specialised suppliers. They may not be able to offer tailored solutions that address unique or specific organisational requirements. Markit is a “consolidate supplier” to many multinationals but at the same time we are very much a spe- cialist. Once again “helping clients succeed” methodology; a core of experienced developers & business system integration experts; and attentive, proactive account managers all add up to deliver tailored solutions for each client. Every client has unique circumstances, challenges, and goals and thanks to 20 years of experience we have encountered the vast majority of them before. Markit is uniquely flexible because we must be, to consistently deliver time and money savings, year in, year out. 7. Reliance on a Single Point of Failure Consolidating suppliers creates a single point of failure. If the supplier experiences disruptions, such as system outages, delivery delays, or product shortages, it could have a severe impact on your organisation’s operations. Markit services are running on Azure and in a private cloud. We aim for 99.99% uptime for all core ser- vices. Uptime was 99.97-99.99 during the past 12 months. The Markit marketplace displays real time stock availability. The average delivery time per order in 2022 was 3.9 days which includes cross border deliveries. Intra-country deliveries are often made within 48 hours. With stock offered direct from 350 of the world’s largest IT distributors it is extremely unlikely that availability ever becomes an issue.
  • 11. RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT WWW.MARKIT.EU 11 SEPTEMBER 2023 In addition, during the Covid-19 crisis markit established a special cross border catalogue to allow clients not just to see real time stock levels in their country but also across the entire European Union. When stocks are unavailable locally, the account managers help clients find the required products in a nearby country and handle the cross-border delivery issues promptly. 8. Difficulty in Vendor Transition Transitioning from multiple suppliers to a single supplier can be challenging and time-consuming. The migration process may involve data migration, system integration, and training, which can result in dis- ruptions and potential productivity losses. In our experience at Markit we see the transition is best conducted in a phased manner where confi- dence builds step by step. Category by category, and country by country rollouts with proof-of-concept are recommended, rather than attempting to switch all in one hit. 9. Compliance and Risk Management Depending on a single supplier introduces concentration risk, as any issues with the supplier could have a significant impact on your organisation’s compliance and risk management efforts. Diversifying sup- pliers helps distribute risk across multiple providers. At Markit, compliance and other risk concerns are addressed on an individual basis and special focus is placed on potential issues identified in RFPs and the business case development process. 10. Loss of Specialised Expertise Specialised suppliers often possess in-depth knowledge and expertise in specific products or technol- ogies. By consolidating suppliers, you might lose access to the unique insights and specialised support provided by these niche vendors. Our employees (Markiteers) include a variety of IT experts who attend industry and vendor trainings and certification programs. Product knowledge is a key component of our ability to help our clients find, compare, and select the right items to serve their needs. With a direct line to the top levels of the leading IT vendors we can always get answers promptly if needed. Within Markit we also have brand specialists who stay connected with the latest business developments, product innovations, and releases.
  • 12. SEPTEMBER 2023 WWW.MARKIT.EU 12 RISKS & BENEFITS OF SUPPLIER CONSOLIDATION FOR IT PROCUREMENT CONCLUSION It is important to carefully evaluate these risks and benefits to determine whether the benefits of con- solidation outweigh the potential drawbacks in your specific IT procurement scenario. We can help with that evaluation in a professional and transparent way. In general marketplaces can be a helpful solution to maximising the benefits (and reducing the risks) of IT supplier consolidation but... not all marketplaces are created equally. To find about more about whether the Markit IT marketplace is an IT procurement solution you should consider please read our white paper on the topic: Optimising Indirect Procurement with Marketplaces ... or contact Jon Kolasinski, Head of Countries on +48 500 206 227 / jon.kolasinski@markit.eu
  • 13. Follow Markit news and views on our blog, LinkedIn, Twitter & SlideShare Copyright © 2023 Markit Holding AS This report is made available under the Creative Commons Attribution-ShareAlike License. TAKE THE CHASING OUT OF IT PURCHASING WWW.MARKIT.EU MARKIT IS A GLOBALLY RECOGNISED IT PROCUREMENT MARKETPLACE Thousands of international companies across 6 continents are saving considerable amounts of time and money by sourcing and buying their IT hardware and accessories through Markit’s IT marketplace and procurement solution. Markit clients compare prices and delivery times in real time in our marketplace of over 5 million unique IT products. In 2022, they saved an average of 10.3 % on average market prices and thousands of hours by using Markit to manage, centralize, and streamline their IT purchasing. Founded in Estonia in 2003, Markit is now working in 43 countries in 2023. In 2022, Markit’s revenue was 217.8 million euros. If you would like to discuss your sustainable IT hardware and acces- sory requirements, please contact: Jon Kolasinski Head of Countries, Markit E-mail: jon.kolasinski@markit.eu Markit has reached the World Procurement Awards finals shortlist twice. We owe a huge thank you to all our clients, partners, and Markiteers who helped make our global recognition possible.