21 September 2009 | Jake Kanter
UK businesses are failing to get best value from IT and telecoms contracts.
Research by the Henley Business School, commissioned by telecoms company O2, found that 47 of the 100 companies surveyed had not reviewed major telecoms deals or switched supplier in the past two years. In addition, 15 per cent had never reviewed their spend on such contracts.
Nearly a fifth of the respondents said complexity was the biggest barrier to switching contracts, while a further 22 per cent failed to see the link between savings and the bottom line.
Of the firms that had reviewed their IT and telecoms deals (50 per cent), over two-thirds had cut costs by an average of £10,000.
The report estimated if all UK firms improved management and spend on communication services, they could save a total of around £1.2 billion.
Professor Chris Bones said: "Other than reducing head count, supplier costs are the most obvious place to look to slash costs and ensure the business is operating as cost-efficiently as possible."
He said small businesses, which are "the lifeblood of economic recovery", are losing out in particular. Professor Bones said cash saved in telecoms and IT categories could be invested in innovation, which would help across all parts of business. "If this isn't addressed, money that should be spent on the innovation that will ultimately lead us out of recession is being wasted," he warned.