Earlier this year, the influential magazine, MT(Management Today), in association with Auditel, the highly-regarded consultancy, carried out a survey with leaders of more than 100 organisations.
The survey reported that ‘strategic cost management will be a game-changer in many industry sectors for the next five to 10 years. Chief executives and finance directors don’t need a crystal ball to tell them that revenues will be tougher to earn and margins will be challenged by hungry competitors’.
Chris Allison, Managing Director of Auditel, comments: “The survey highlighted the fact that the discipline of cost management has evolved a great deal since the dark days of short-term cost-cutting. This process often left organisations in a worse state. Rather than a knee-jerk cost-cutting, smarter organisations are learning to embed sustainable cost efficiency as they accelerate into the economic recovery.”
Yet some chief executives and finance directors in organisations where costs were taken out during the recession, are finding that they starting to flood back into their business at a frightening rate. In fact, according to a KPMG survey, ‘more than 95% of cost reductions achieved during the recession are expected to return in the short term – that equates to more than £90bn of costs across UK firms’.
It was found that ‘a lack of understanding is the biggest obstacle to cost management in companies. Organisational politics can also hamper efforts to bring costs under better control. Close to one in five respondents pointed the finger at unrealistic goals being the barrier’.
Allison again: ‘This is why thousands of businesses are turning to outsourced solutions for their cost management issues. Auditel is working with over 3,700 companies over every public and private sector. Here are examples from two of our professional clients
Churchers is a leading Hampshire law firm servicing businesses and individuals with a comprehensive range of legal services, established approximately125 years ago. The firm has grown considerably –expanding to Fareham , Cobham, Lee-on-the-Solent, Portsmouth and Isle of Wight.
Mandi Miles, their Office Manager, engaged Auditel to undertake cost management services. She says: “I was very impressed at our initial meeting. Auditel immediately understood what I required and offered solutions to everything raised. We have made extensive savings.The outstanding performance is definitely Postage – DX. In one office, the fee was more than halved and there have been substantial savings at the other offices as well.
“We believed that we had kept a close eye on our suppliers and costs. Now we realise that this wasn’t the case. We needed an outsider’s view to obtain the best deals available. Our experience of “cost-saving” organisations in the past was not satisfactory, so we were rather cautious to begin with. The service provided by Auditel has exceeded our expectations.”
- Card payments –24%
- Water rates – 29%
- Hygiene services 39%
- Electricity – 24%
- Recycling and Waste Disposal –55%
- Postage–DX 23%
- Stationery supplies – 41%
- Electricity – 24%
- Gas – 22%
- Print – 35%
Knill James is a highly respected firm of accountants and business advisors, which has been providing services to businesses in Brighton, Lewes and throughout the south east of England for 125 years. With six partners and 50 staff based in Lewes and about 2,500 clients, they provide financial expertise for individuals, small and large businesses and professional practices.
Auditel first came to the attention of Kevin Powell, Partner at Knill James in 2010. Having heard good things, he set up a meeting whether to find out the operating expenditure could be reduced.
From the outset, it was obvious that their practice would be in good hands and Auditel were engaged. Senior manager Dominic Shephard takes up the story: “I was most impressed with Auditel. They were very professional and clearly knowledgeable about our key cost areas. Their no win, no fee offer was also much more attractive than paying a company to find us savings and then, months down the road, not finding any!”
In addition, Dominic was particularly pleased to find that Auditel didn’t simply cut costs and walk away. “They also provide ongoing management of the cost areas audited. Auditel started with the mobile phones. It is an absolute minefield for a lay person to unravel. Not only has Auditel sorted it And it’s all part of the service!”
He adds: “The savings which are beginning to come through now are very welcome, but the biggest factor for me has been the time-saving. Having experienced the benefits ourselves, we are now looking to introduce Auditel’s cost and purchase management service to our own clients.”
- Mobiles –26%
- Confidential waste – 69%
- Vending Machines – 12%
- Electricity – 7%
- Fixed Line Telecoms –47%
- Photocopiers – 34%
- Franking – 57%
Allison says: “Outsourcing your cost management to Auditel can reveal real cost savings, reduce waste and free up in-house resources. Every month, year in and year out, we are saving tens of thousands of pounds for small, medium and large organisations on their business costs. If you too want to have peace of mind, amid spiraling expenditures, start with our Auditel Business Health Check. We can include a Financial Health Check as well for you.”