Bankers don't just blow cash on bonuses, they also spaff ££££s on IT

The banking industry - on average - coughed the highest margins for technology in 2013, doubtless indicating that champagne-guzzling fatcats drunk on bonuses were the ones in charge of purchasing. A survey of 200 procurement and ICT managers in 12 sectors with annual budgets over £50k and based on some 150,000 products showed …

[LarsG]

It says everything there is to say about banks.

As it was paid with money stolen from their customers I suppose they didn't really care how it was spent just so long as they could off set it against tax...

What do you mean they hardly paid tax themselves, just used customers money instead.

[Terry 6]

proccess

This article and the commercially slanted research it quotes don't seem to say much about the proccess for purchasing in different sectors/institutions.

Do the banks have a buying department tasked with getting the best value, in which case it's a matter of those people not doing or being able to do their jobs. Or is there just a department with a bureaucratic role instead, there to prevent fraudulent purchases. Or do individual managers just buy stuff as they need it? And so on.

[Chris Miller]

I've been on both sides of this "you paid how much?" argument

In one case I took over computer services at a (very large) dysfunctional operation. Going through the books, it was soon obvious that they'd been paying full list price for (IBM) PCs and associated kit, which they were buying in hundreds every quarter. My predecessor's hobby was racing rally cars - guess which reseller sponsored his efforts?

OTOH you need to recognise that large corporate IT setups can't get their kit by scouring the local PC outlets for the content of the bargain bins by the checkouts. Yes, I might be able to get an equivalent spec device a bit cheaper that way, but I save a lot more by having a consistent fleet of computer equipment to maintain - and C-level management (especially know-nothing beancounters) need to recognise that.

[Anonymous Coward]

Re: I've been on both sides of this "you paid how much?" argument

"My predecessor's hobby was racing rally cars - guess which reseller sponsored his efforts?"

Might sound naive, but it does sound like borderline corruption to me. Did you tell anyone else about this and if so, did anything come of it?

Or did you realise that this was either politically unwise (i.e. might make someone else look bad, which might come back to you, etc.) or just not worth *your* time or risk? Which may well have been the most sensible option if it wasn't your fault, no-one cared and no good deed goes unpunished etc. etc.

[Chris Miller]

Re: I've been on both sides of this "you paid how much?" argument

I told my boss, who said "yes, that's why he left". Organisations (commercial and government) often prefer to deal with such behaviour with a mutual parting of the ways, thinking that a court case would bring unwelcome publicity (and the behaviour in this case was 'borderline' as you say - no money directly changed hands and it isn't illegal to pay list price for stuff). I know that the individual concerned moved on to a similar role at another large business - whether he changed his ways, I can't say.

At another company I worked at, the facilities manager had a 'pet' company that were used for all building works and alterations. AFAICT they did a good job and I don't know whether they charged over the odds. But I know they fitted a new kitchen at his house at a very good price.

[Keep Refrigerated]

It's about keeping the cogs turning...

All the banks I've worked in had purchasing set up and tracked through cost-centers. The IT managers that I've known have limited budgets and have to purchase all their IT at a nominal price- and are always conscious of budget.

OTOH I remember having an argument with a non-manager VP at one time, who did not want to decommission a couple of hundred servers we had identified as being under-utilised because it would affect his stats (and he'd consequently have to raise the changes)...

He didn't last long in his role but from what I have seen there is no shortage of minions of this order, trying to keep everything looking tickety-boo by not reporting reality, in order to keep their stats the same week by week and not have to raise too many change requests or explain too many exceptions (no matter whether those exceptions show a failure or improvement).

[All names Taken]

Commission?

Maybe the bank staff commissioning, paying or ordering kit do so on a commission basis with, say, £45 of that £50 for USB mouse being returned to whoever signed the order at the bank?

[Banksy]

@LarsG: What a load of rubbish. You could easily flip those comments around. Banks have IT departments, maybe the IT departments are in charge of the purchases, maybe they're the lazy, thieving gits? See? As Terry 6 says the article/research lacks too much information to do anything but draw lazy conclusions as you've done.

[Nuke]

@Banksy

Wrote :- "maybe the IT departments are in charge of the purchases"

Maybe in the sense that they choose the hardware, but maybe they don't have a free hand in choosing the supplier. In the large outfits I have worked for, the purchasers have been directed to keep to certain suppliers, to their own frustration, with whom deals have been struck, no doubt over a good lunch by higher management.

One company I know (at least one of their departments), who make jet engines in the UK, have to make their purchases through an intermediate company who are purely a paperwork outfit. This intermediary never even sees the kit, and from what I've heard, knows sod-all about it anyway. They are just there to add a delay and a 25% cost (I've seen the figures). Someone higher up just thought that sub-contracting purchasing was a good idea.

[Anonymous Coward]

Re: @Banksy

> Someone higher up just thought that sub-contracting purchasing was a good idea.

It probably is a good idea. "Large outfits" as you put it, can afford good accountants and those usually know what they're doing (much to the horror of mathematicians).

[Anonymous Coward]

Cashback

Maybe they have cashback deals?

I know these exist for deals with travel agents, car hire and the likes of AmEx....

[Anonymous Coward]

The price difference could also be explained by cross-charges. We pay more for kit but the cost of the purchasing team (salaries, office space, etc) comes out of that rather than being centrally allocated.

[Annihilator]

Wooden dollars

There's internal charging (wooden money), external charging (real money) and cross-charging (a means of matching up the two). I'd be very surprised if a company received £50 for a USB mouse and that it wasn't just a made-up cross-charged figure on a cost centre that includes the generic "lights on" costs within the overall contract, pseudo-randomly apportioned to each piece of IT equipment. I'm not seeing enough in the article to identify what sort of costs we're actually talking about.

[Banksy]

@Nuke: Yes, I understand that. I'm just pointing out the laziness of Lars' post. I've worked places where IT were in charge of the whole process end-to-end, others where they selected the kit but Procurement/Finance made the purchase/tender and still others where, like you say, where IT select the items but have to use preferred suppliers.

With this sort of variability you can't draw many conclusions from the study/article which doesn't clarify the situation.

No need for the facepalm.

[P. Lee]

Headlines worthy of any red top.

I'd expect el reg to at least take a nod to what might be mitigating circumstances.

Did the NHS forget to order an ethernet cable and got stung for £6 on something which should have been £1?

Are the markups by resellers or vendors? I've seen vendors (Hello Checkpoint!) sell enterprise management software running on Celeron-based appliances. The markup on those is massive. I'm not sure how much you should attribute to R&D over build costs (in this case, almost nothing) but there are other things to consider.

[Anonymous Coward]

Cashback / Free stuff

When I worked on the Hell Desk for a school the IT manager would never look for the Cheapest option just the one that gave her the most free stuff. In the 2 years I worked there she got herself an iMac, Macbook Air , Ipad , Nexus 7 and probably more, She was not a techy at all and didn't know much at all about the system/network, Me and the other technician ran it all, while getting paid only £14,000 a year and not seeing any of these nice freebies!

[All names Taken]

Re: Cashback / Free stuff

Have a sympathy pint mate - you need one after having to put up with all that.

Yes, the problem is optimisation.

But optimisation for whom and to whom has optimisation been against?

Once there may have been at least a little shred of altruism but now it appears the Thatcher inspired greed culture of grab it n grab it all really does have some pay back (especially when guvmint and its pet uncontrollable rottweiler (Trezz Yuri - it depends on Ruskie cash and energy now until it can loan a few more from China once they have stopped flogging them old buildings worth a few hundreds of £thousands for a few integers of £millions but I digress no?) needs to get as much cash in as possible and optimise that for individuals and minimise that for others?

(Just sayin it over easy that's all)

[Terry 6]

Purchasing officer

When I was responsible for the IT in the teaching service I helped to manage we were forbidden from buying stuff ourselves. It had to be sourced from the council's IT buyer, who added his costs on. But then he ordered everything from a well known supplier's catalogue that we had in the office, and which was never the cheapest supplier.

Did we get a special price for being part of such a large organisation? No.

Could he advise us about the TCO of various devices? No.

Did stuff come really quickly and with brilliant after sales service?

Still no.

What was the point of this?

Well, i think just that we weren't trusted to buy kit that we needed to use, paid for out of our own budget. I assume thiis was in case we were buying it for some dishonerable purpose.

[Anonymous Coward]

Re: Cashback / Free stuff

And you didn't make a list of the freebies and accidentally leave it on the Head's desk?

[Terry 6]

Also, long term planning

Just one more hypothesis among many is that departmental buyers look at long term supply and pricing. They may pay a bit over the odds knowing that they have a reliable supplier who gives a reliable price with a guaranteed delivery over the long term,Or that if they show a big short term saving now they will have the budget cut and be in the firing line when prices rise again and they can't get the kit they need.

[Nuke]

@Terry 6 - Also, long term planning

Wrote :- "departmental buyers look at long term supply and pricing. They may pay a bit over the odds knowing that they have a reliable supplier."

You're being funny, yes? About 12 years ago, at a time when PC prices were dropping like lead balloons, we got a circular at work from Finance Dept saying, very proudly, that they had negotiated a deal with [wellknown IT supplier] to hold their PC prices for the following two years. Those Finance morons did not have a clue.

Yes, that supplier must have been VERY enthustic about keeping us supplied after that.

[Andy Enderby 1]

Re: @Terry 6 - Also, long term planning

"About 12 years ago, at a time when PC prices were dropping like lead balloons, we got a circular at work from Finance Dept saying, very proudly, that they had negotiated a deal with [wellknown IT supplier] to hold their PC prices for the following two years."

Jeez...... just jeez..... and worse is that it still goes on, and not for any shitty 2 year term either. I could understand negotiating software license pricing agreements, but hardware ? Hardware prices have really only gone one way....... I'd be looking for evidence of backhanders being taken, and if there is none, sacking them for stupidity.

[Terry 6]

Re: @Terry 6 - Also, long term planning

@Nuke

Yeah And I've come across other stories like that as well. But that's the thory, rather than the actual outcome.

[Andy Enderby 1]

M&S

Lovingly crafted from unicorn horn and virgins tears, this not just a USB mouse, it's a bankers USB mouse.....

[Spandy]

As it was for sepnding in 2013...could this just not be down to the facts that banks have been using the same kit for years and are now having to replace loads due to the XP end of life and the need to uipgrade everything to Win7?