Posted by: Paul Foster

Why energy efficiency?

Putting energy prices and the environment at the top of your agenda is a smart environmental and business practice. Reducing energy consumption will reduce greenhouse gas emissions and operating, manufacturing and consumption costs.

Action plan

1. Set a company energy policy – by making energy efficiency a part of operational procedures and a consideration in every business decision.

2. Perform an energy audit – to assess where energy efficiency can be improved.

3. Implement energy-efficiency recommendations.

4. Encourage employee participation and innovation – educate employees and introduce easy-to-follow energy-efficient practices.

5. Introduce financial incentives for employees to come up with energy-saving ideas.

6. Track energy costs both before and after energy improvements – information creates your next set of action plans.

7. Optimise energy in manufacturing processes and activities – improves competitiveness!

The bottom-line

According to insolvency firms one in three companies is “regularly” reaching their overhead limit, highlighting rising financial distress among businesses – energy cost efficiency is a necessity!

The Auditel Partner Programme adds a new dimension to client relationships.   The programme presents opportunities for Auditel Affiliates to achieve their desired client growth goals.  Client relationships are enhanced and strengthened and a true ‘Win-Win’ between Partner and Affiliate is achieved.

Posted by: Paul Foster

Significant increases in the cost of energy is a compelling reason for any organisation to reduce energy consumption. The good news is that energy cost reduction is relatively easy to achieve and can lead to significant bottom-line benefits.

Energy consumes 5 to 20 percent of overhead costs. This is spiralling upwards as tariffs continue to increase in 2012 and beyond. Organisations MUST therefore find a way of mitigating this in order to remain competitive.

Wake up ….you must pay attention to energy efficiency!

The trend is towards a cheaper, greener more sustainable future and you need an active corporate energy strategy.  If you don’t adjust, you may not survive as profits decline and you will find many clients who demand environmentally friendly products just going elsewhere.

Energy management is a serious issue

According to the Deloitte resources 2011 US Study, 90% of companies have set goals regarding electricity and energy management practices. 76% have goals related to reducing electricity cost/consumption and 71% have goals targeted at improving the efficiency of the building in which they operate. These goals are significant, typically aiming for an average of 25% in electricity or cost reduction, most often with a 2–3 year time horizon. 56% of the companies have goals aimed at improving profitability through electricity reduction.

What have you done?

Energy strategies are about hard-core business decisions and not fluffy green issues. You need to understand how to compete in a rapidly changing world, better asset utilisation, smarter use of technology and much tighter management of the entire supply chain.

Your future depends on it!

If you have an energy policy and strategy document, that’s a great start. You need to understand how to transform your organisation and have a plan in place to achieve it – otherwise you may not be around tomorrow.

We have just finished another week of 3 Regional Meetings, which took place around the country and involved over 130 members of the Auditel network.

The Auditel Regional Meetings give those Affiliates that specialise in specific areas, the opportunity to provide the network with an overview of how they operate with their suppliers and clients.

These meetings are also a great opportunity for our suppliers to meet with our network, discuss new technologies and industry trends and work strategically to provide a future working arrangement that benefits the supplier, our clients and ourselves.

Our Affiliates value the contact with their colleagues. Some find them a key part of their Auditel business, a forum to keep abreast of projects within the network and they are undeniably a great support for those that are new to the network.

Posted by: Ron Yellon

In this complex marketplace with a huge array of suppliers, tariffs, add-ons and equipment, businesses find it extremely difficult to discover the most effective cost solutions for mobile phone fleet management. According to Ofcom, “A whopping £4.8 billion is wasted every year.” Why?

An industry insider suggests too many suppliers chasing connection targets and maximum profit margins, many customers are offered inadequate tariffs and unbalanced solutions.  Under-pressure and inexperienced purchasers, technophobes, and a ‘better the devil you know’ attitude to an incumbent supplier can often lead to an inefficient solution being provided.  The expected market price that the customers’ usage and spend should reflect is rarely achieved.  Once signed up, they receive a ‘not my problem anymore’ attitude when seeking customer service.

Any wonder then that many of those responsible for purchasing decisions are increasingly turning to independent cost management networks, like Auditel, for expert help.

The 3 SIMple secrets revealed

Former telecommunications strategist with Cambridge-based consultancy, Analysys Ltd and Auditel business owner, Ron Yellon, reveals the three secrets to achieving the most appropriate solution and best value:

Secret 1 – Insist on the analysis and use of good management information

This is the bedrock of better decisions.  By feeding detailed itemised bill information into our widely acclaimed computerised review system, we can analyse all mobile phone usage, call destinations and call time periods, and adjusting these for your preferences and plans for change, we can have it specify what savings can be made, and where.  Working with large fleet of mobile phones becomes a breeze.

Secret 2 – Seek out truly independent advice

Ensure your analyst is armed with detailed knowledge of where in the market at any one time the incentives and quality lies and can tender to all UK networks and suppliers – Mobile Network Operators, Virtual Mobile Operators, Mobile Service Providers or Mobile Dealers – to identify the best commercial proposition and service.  And don’t forget it isn’t all about price, service levels are more important than ever before. Make sure you pick from firms that are focussed, can deliver and are likely to be around for the longer term – and not just the biggest household names either.

Secret 3 – Create an appropriate cost management culture

Falling call costs but escalating spend requires a greater ability to manage behaviour.  Get your internal policy for wise business use, and private use, in order, and communicate it clearly and enforce it.  Assign accountability for keeping good records, ensure phones are returned when people leave, and manage churn cost effectively through reuse.  Be proactive with your supplier on roaming charges when planning projects abroad.  And finally, don’t let the needs of the few dictate handset replacement for all.
Don’t let mobile fleet management drive you up the pole?

With your bespoke profile in mind and plans for change, Auditel has access to the full range of suppliers  to identify the best commercial proposition and service.  And best of all, this specialist capability and expert knowledge is often available on a self-funding basis from a share of the savings we achieve.

“We have achieved some great success stories with our clients”, says Ron, “not just on telecoms, but right across the spectrum of essential business expenditure (over 80 categories) – saving money, providing peace of mind and releasing hard pressed resources.

In these times when we are all so busy and cost-focussed why would you let mobile fleet management drive you up the pole?

Contact me at www.auditel.co.uk/ronyellon or 01223 654314 to find out how you too can benefit from this specialist self-funding management service.

Posted by: Mark Stevens

It was interesting to see BBC News report that parliament’s Public Administration Committee has reported that a lack of strategic thinking is leading to a “patch and mend” approach to policy-making.

Putting the politics to one side and given that the Government’s main task in this parliament is to reduce the deficit, there are strong parallels between their approach and any company’s cost management activities. There are times when only a systemic view of a company’s problems will produce effective results. The Government has chosen to mostly manage their cost transformation through departmental initiatives and are perhaps missing the synergy opportunities from looking at “UK Government PLC” as a whole.

Auditel consultants are often approached by FDs driven by a single operational problem or large invoice to “sort out” the costs and general management of a particular overhead cost category. We’re happy to help, of course, and it is the right thing to do if a company just needs to tweak it’s overall performance.

We’re also happy to review all of a businesses’ overhead costs as part of our Business Health Check service, which will quickly reveal which areas are under control and which areas require attention.

For companies who are considering embarking on a full cost transformation programme, our mix of industry experts and Total Cost of Purchase methodology can become a key part of your full review of your company’s organisation, processes and supply chain strategy, ensuring all of your costs are considered together.

So whether you have one nagging area of cost that you really must sort out, or wish to discuss how Auditel consultants can enhance your Cost Transformation team, contact me.

Posted by: David Powell

Brokers vs Consultants vs Doing it yourself

One of the most common questions we get asked is why should I use outsourced specialists when we can do it in-house for free or use a broker for free. In this article I try to address some of these issues with some pro’s & con’s for each type of approach.

This is by no means exhaustive because to go through all the pitfalls would take a small book and would still probably miss something out. I’ll also concentrate on Energy because it’s relatively easy to explain with simple examples, though the same could be applied to Telecoms, Stationery, Freight/Courier brokers etc etc.

Doing it Yourself

Pro’s

• You get the cheapest price you can find on a given day and don’t have to pay commission or a fee to an external party.
• You have full control and can make an instant decision

Con’s

• Do you have time to read all the T&C’s? e.g. one of the big 6 has a Directors Clause i.e. the Director that signs the contract is personally liable for the energy bill should the company not pay.
• Are you sure you have called ALL the suppliers, on gas for example there are several players outside the Big 6
• Have you kept up to date on the energy market? How do you know that today is the right day to fix your energy price for the next 1, 2 or 3 years?
• If you are currently on high out of contract rates do you have the skills to calculate 6 weeks on out of contract rates if you transfer suppliers vs taking a slightly higher price with the incumbent – which works out better?
• Have you checked that each supplier is quoting you on the same basis e.g. same number of kWh’s, have they all included all charges e.g. VAT, Transportation, DuOS and TuOS etc
• Do you know if your meter type is right for your business operations, could a different meter profile save you money?
• You are at risk of a clever/slick salesmen conning you into a deal that’s not right for your company.

Using a broker

Pro

• You get a range of prices from several suppliers with one phone call / internet enquiry
• Some good brokers will also give some advice on market conditions and predicted movement.

Con’s

• Has the broker highlighted any problem clauses? E.g. Take or Pay i.e. use only 79% of your contracted consumption and end up paying an extra 21% for energy you haven’t used at the year end.
• For suppliers the broker hasn’t included in their quote has the broker told you why they haven’t included that supplier? E.g. failed credit check or no commission agreement?
• Is the broker open book i.e. have they told you what commission they’ll earn from each quote presented?
• Has the broker highlighted any service concerns? i.e. if you’re going to be stuck on hold with a call centre, assuming the broker doesn’t offer this service, which supplier is better to deal with.
• Has the broker highlighted if a supplier bills monthly or quarterly or by flat rate direct debit with year end catch up – this can have a major impact on your cashflow, especially for Gas which can be very seasonal usage?
• A volume driven business i.e.

i) the less time they spend on a client the better and

ii) the longer the contract they sell you the longer their commission is locked in

iii) the further in advance they lock you in the better for them.

• How has the broker measured savings? Unscrupulous brokers and by no means all, in a declining market will claim savings against your prior year spend, so they’ve not actually made a saving, the market has just fallen.

Using a specialist consultant paid by share of savings

Clearly we’re biased but I wouldn’t be doing what I’m doing if I genuinely didn’t believe we were offering a valuable service that had the clients best interests at heart and we just happen to earn from a share of savings where we find them, if we don’t make a saving we still do the work. Win some, lose some.

Pro’s

• We check & do all of the con’s above.
• We are a low volume business and the more time we spend per client the more we can save. We deal with the minutiae.
• We take the risk away e.g. a broker will want to consolidate all your supplies into one contract end date, so they only have to visit you once a year and re-sign one contract. However in the energy market multiple contract end dates and multiple contract lengths means you spread the risk and don’t end up fixing all your supplies at the peak of the market.
• A share of savings charging structure means you can see how much you are paying for the service and you can be comfortable you are getting good value.
• Small changes can make a large difference or as the Dali Lama said “if you think you are too small to make a difference, try sleeping with a mosquito”. We’ll deal with your annoying mosquitos for you, so you can get on with day to day management of your business.

Cons

• If a new FD comes into the business our fee can look like a cost that can easily be cut and you’ll have to explain what we’ve done and what we do on an ongoing basis.
• Ummm – I can’t think of anymore cons, please let me know in comments below if you can and I’ll respond.

Posted by:
Rhys Brennan

This week we see the importance of getting the little things right. Last weekend The Feathers Hotel Group, based in the North West of England counted the cost of a poor internet connection, when an unnamed Formula 1 team checked out of their hotel and into a rival property just a few doors away.

This came at a cost of £3500 to the hotel group, and further more, left them with an empty hotel for the weekend. Long-term it is unlikely that the team will ever stay at the hotel again, and consequently an avoidable fault has cost the group a prestigious customer. James Pink of telecommunications experts Pink Connect had this to say: “In today’s digital age, people need to be able to access information quickly so it’s more important than ever to ensure a strong, fast internet connection for customers.”

With the ever-changing improvements in technology, customers expect excellence at all times. The problem stemmed from the hotel’s use of an ADSL connection, which are subject to a fair use policy or download limit. When these limits are reached, the hotel is then left with a slow service until the following month.

Had the hotel had a decent Wi-Fi system in place, this problem would have been avoided. However, according to bighospitality.co.uk hoteliers are finding it difficult to get reliable wireless coverage for the whole of their buildings at reasonable prices.

Fortunately, there is no reason why Wi-Fi should be prohibitively expensive. If you’re a hotelier or any business in a similar situation to the Feathers Hotel Group, come and visit Auditel for a free consultation to see if we can get the right connection for you at the right price.

Posted by: Paul Foster

A rollercoaster of profit warnings marked the first three months of 2012 according to Ernst Young. The flurry of warnings in the opening weeks of 2012 is caused by renewed fears that euro zone problems will further impact consumer and business confidence.

Spendthrift Britons Rediscover Virtues of Saving

But things are about to get much worse. According to the IMF spendthrift Britons will rediscover the virtues of saving during the next few years. A near 40-percent increase in the scale of British savings during the this decade is on the cards. In troubled times people hang on to their cash even if it makes little economic sense, look at the mid-Seventies when inflation was soaring as high as 26% interest rates were negative and the value of people’s savings were reducing-year-on-year, bit like it is today, albeit with lower inflation and lower rates.

So we are progressing from an environment where businesses have been hoarding cash to one where consumers will be doing exactly the same.

This signals a very difficult decade growing business income and highlights the rapidly growing need for better cost management. The fact is that many organisations are not up to the job: See an excellent article by one of my colleagues here

So the needs to outsource this to professional cost and purchase management experts has never been greater.
Procurement Outsourcing is the Answer

Established in 1994, Auditel is the premier independent cost and purchase management consultancy in the UK, with over 200 fully-trained specialists. With over 3,800 satisfied clients on our books, we can safely say that Auditel’s brand of sustainable and ethical cost and purchase management is playing a pivotal role in that equation.

Our Total Cost of Purchase ® approach is a holistic way of reducing and managing the costs of doing business. It enables organisations to lower their business costs year-in and year-out. Our Business Health Check examines all expenditures associated with making effective cost management decisions. Best of all, our performance-driven contingency fee model, means the comprehensive specialist service is totally self-funding.

There are no up-front fees, no hidden charges and no extras.

For 2012 I would encourage firms to contact me to see how you can benefit from this more intelligent approach.

Posted by:
Chris Anderton

Brokers for all types of service proliferate on the internet. Why should you be wary?

Lets assume you are looking to renew your business electricity contract. Your supplier writes and offers renewal at 10p per unit so you shop around online & can find a price through XYZ Brokers ltd of 9.5p. Yes!!! Success!!!

But what lies behind this offer? Typically, XYZ Brokers ltd will approach a number of suppliers & will obtain prices on your behalf that includes their commission. This varies from supplier to supplier, area to area, client profile to client profile etc. So, your offer of 9.5p may comprise a cost of, say 8p per unit for the electricity & broker commission of 1.5p for example.

In reality, XYZ Brokers ltd may also have been given a price of 9p per unit for your business by an alternative supplier. However, this might comprise a cost of 7.8p for the electricity & broker commission of 1.2p for example.

Guess which offer XYZ Brokers are going to put to you! For them,it’s a no-brainer. At 9.5p per unit, you save & they make a handsome commission. Actually though, the best price available is from the alternative supplier at 7.8p.

Lesson learnt is ALWAYS use an independent consultant who will put the best offers directly to you the client, and then make their money from a share of the savings NOT commission. That way, you are certain of obtaining the very best offers from a consultant with no vested interest and where the whole process is transparent.

Time and again, we come across clients who, frankly, are being taken for a ride by totally unscrupulous brokers