British business stifling innovation by failure to ditch old-fashioned ways of working with suppliers.
UK firms could get a better deal by buying services via an online platform (or exchange) but are put off by fear of upsetting their existing service providers.
Across the country, businesses are putting their competitive edge at risk by failing to seek out the best deals on offer online, according to findings unveiled today.
When it comes to sourcing professional services, most firms say they are reluctant to choose new suppliers over existing ones, even though they could be paying less and getting better service.
Despite this, while nearly everyone (94%) is comfortable in their personal life shopping via an online platform for goods such as Amazon or Ebay, less than half (39%) are willing to embrace buying services in the same way in their business life.
Half of those polled by blur Group said they could expect to save up to 20% from sourcing services online but three quarters (75%) also admitted that ‘peer group pressure’ inside their organisations prevented them from doing business with service providers outside their existing networks, stifling fair competition.
The study, which surveyed 300 decision makers within UK businesses and 141 UK service providers, found that whilst 89% of business buyers believe there are better service providers available than their existing network, the vast majority (89%) were still likely to approach their existing service providers when a new project arose.
In contrast, 93% of decision makers admitted they would like to find a service provider offering a more innovative and fresh approach to those they currently work with, however 83% revealed that procurement processes often prevent them from doing so.
As a consequence of constantly working with the same network, two thirds (66%) of decision makers felt that service providers often got jaded before projects were finished, leading to unsatisfactory results.
This approach to awarding contracts by decision makers was echoed by the service providers themselves. Eight out of ten (81%) found that most pitches are won by companies with existing relationships rather than the best ideas, whilst 93% admitted they had participated in new business pitches where they stood ‘no chance of winning’ as the client had a clear favourite from the outset of the process. 86% believed they had been added to pitch lists simply to make up the numbers.