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.

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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

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RISKS & BENEFITS OF SUPPLIER CONSOLIDATION
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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.

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BENEFITS OF CONSOLIDATING IT SUPPLIERS

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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.

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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.

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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.

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RISKS OF CONSOLIDATING IT SUPPLIERS

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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.

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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.

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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.

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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

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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.