HOBI Weekly Blog Recap (5/22-26/23)
Large U.S. organizations have made major improvements in their ITAD practices within the last year, according to new primary and secondary research conducted by Compliance Standards LLC (CS). But despite reports of several indications that positive ITAD practices have gained momentum, an unsettled ITAD vendor ecosystem still raises concern among ITAD service buyers, which has led to reduced commitment from users.
The rate of ITAD outsourcing jumped from 70 percent in the 2015-2016 research cycle to 87 percent today, highlighting companies’ interest in utilizing best practices and hiring professional service providers. There is also greater oversight of ITAD vendor activity and emphasis on environmental compliance, with a focus on reporting and auditing and recognition of certification bodies. Despite these improvements, CS says several shortcomings are obstacles to sector growth and are causes of risk.
Companies continue to adopt a multi-route to recycling strategy and use their own IT staff to perform parallel recycling tasks, which leads to high risk and greater cost. CS also reports the use of unethical recycling routes, such as disposing of electronics and IT equipment as waste, selling and online trading and storing.
“One of the reasons behind the persistence of substandard practices is the unstable ITAD service provider environment,” says CS Lead Analyst David Daoud. “While major original equipment manufacturers (OEMs) remain at the lead, the consolidation phase of the past years allowed the acquiring companies to grow mindshare, but it did not place them in clear leadership position. The pure ITAD firms that were acquired were instead replaced by new names, which appear performing very well in light of their customers’ ratings and quality assessments.”
Outperforming the market is a group of ITAD companies headed by All Green Recycling, which shows strong figures in BMP, EMP and other rating data. Several companies with the same scale and scope registered similar results, CS says, making them effective competitors but also highlighting the unsettled nature of the ITAD space.
ITAD contracts that are defined as “at will” rose from 24 percent in the 2015-16 research cycle to 38 percent, meaning companies are “less committed” and more cautious about whom they deal with. Long-term contracts dropped from 71 to 61 percent.
“The reduced expectations from U.S. organizations regarding the vendor side are an indication of frustration among IT and procurement managers, but they constitute a tremendous opportunity for vendors who are capable of providing top-notch services, a stable organization and a consistent marketing message,” Daoud says. “Successful companies are the ones that are able to demonstrate skillfulness and differentiation. The market is still up for grabs and savvy companies should step up to take advantage of current sentiments.”
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