Benchmarking
How can customers be sure that Buying Solutions offers the best deals?
Buying Solutions uses benchmarking to measure the price competitiveness of the products and services purchased through its Catalist framework agreements and Managed Services. This forms a significant part of Buying Solutions' rigorous approach to quantifying price savings, measuring price competitiveness, increasing buyer negotiation leverage and assessing supplier compliance with price formulas.
What areas does the Benchmarking Programme cover?
The Benchmarking Programme includes area such as:
Consultancy Services
Information Technology
Telecoms
Facilities Support In a given year the price of more than 10,000 products and services will be benchmarked.
Why does Buying Solutions carry out Benchmarking?
Buying Solutions does this to support a variety of agendas, for example:
To quantify the price savings delivered to the public sector as a result of Buying Solutions commercial activity. Price benchmarking is one of two measures used to assess Buying Solutions performance against its Ministerial Objective to facilitate at least £650 million value for money improvements for the public sector in 2007/08.
To monitor supplier performance in relation to price competitiveness. Buying Solutions employ a rigorous supplier rating system that measures supplier performance against a range of perspectives, one of which is price competitiveness. Remedial action is taken where suppliers are found to be less competitive than expected.
To increase buyer negotiation leverage when reviewing and/or re-competing contracts. The benchmarking data provides our buyers, either directly or indirectly, with vital negotiation collateral, enabling objective pricing discussion with suppliers.
Buying Solutions assesses supplier compliance with price formulas agreed in the applicable terms and conditions of their contract. Therefore, as well as being a highly effective performance measure, the Benchmarking Programme benefits customers directly.
How is benchmarking undertaken?
Buying Solutions employ independent benchmarking organisations to compare the prices paid through their Catalist framework agreements and Managed Services with those paid by public sector organisations not taking advantage of these agreements, or those paid by private sector organisations. The subjects compared must be for the same or equivalent product/service at the same unit of quantity, from the same or comparable supplier and within the same time period.
IT Specific
The constant development of the IT market means that benchmarking IT is more complicated and takes place on a more regular basis in order to keep up with advancements in technology. We aim to benchmark widely enough to capture the majority of spend within each product category covered by the Benchmarking Programme.
How does Buying Solutions' performance fare?
On average, Buying Solutions customers consistently benefit from market-beating prices. Wherever prices are found to be close to or level with the market, corrective action is taken with the suppliers concerned to ensure the continued provision of well priced, easily accessed procurement solutions. A range of the most recent* benchmarking highlights include:
|
Product Category |
Performance |
| IT accessories | 2.14% |
| PCs | 9.26% |
| Servers | 0.78% |
| Printers | 3.64% |
| Consumables | 0.44% |
| Software | 2.72% |
* Figures from January to March 2007
In the above table, performance figures indicate the percentage variance between average market pricing and Buying Solutions' pricing.
A positive number indicates a Buying Solutions price is below the equivalent market price (where market price is defined as actual prices paid by other public sector organisations).
Do the savings count towards efficiency targets?
Yes they do. OGC have approved Buying Solutions price benchmarking methodology and the savings it identifies as valid procurement efficiency savings. In fact, an increasing number of Buying Solutions customers now receive a quarterly letter detailing the efficiency savings they have achieved as a result of their use of Buying Solutions framework agreements and Managed Services.
Please email us at itfw@ogcbs.gsi.gov.uk if you have any feedback regarding this article.
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