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E-commerce 'could save £1bn a year' for practices

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Small and medium-sized practices of architects and engineers could save nearly £1 billion a year by buying basic services and supplies through the Web, according to a new report by business think tank London Economics.

The savings, made on buying services like printing, energy, telephones and IT , average out at £51,000 a year for a practice with 20-49 employees. The report estimates that in the architecture, building and property sector, more than 37,000 businesses with under 250 employees together spend £3.7 billion each year on such indirect costs.

The potential savings stem from the use of a number of new Web-based companies acting as one-stop-shops, which achieve economies of scale with suppliers by placing orders for a number of different companies at once. One such company, GroupTrade. com, which launches later this summer, commissioned the report.

Business experts welcomed the research. 'The approach shows that ecommerce, and in particular e-procurement does aid efficiency and increase productivity, ' said Professor Danny Quah of the London School of Economics.

But architects singled out reproduction and printing costs as the area where the greatest savings could be made rather than on other supplies. One practice with twelve employees estimated that from a total spend of £15,000 on a typical competition entry, £3,000 would be taken up by printing of boards alone and each photomontage image would cost around £1,500 to procure.

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