Sense and the sensibility of a new procurement approach

Sense is a national disability charity that supports people living with complex disabilities, including those who are deafblind, to communicate and experience the world.

Founded in 1955, with assets of two pounds and five shillings, Sense now has an annual turnover of more than £60 million.

“Auditel have brought rigour to our purchasing,” said Cathy Still, Finance Director. “Not only do they specialise in niche cost centres, they also have the scope and the resource to support us with contract reviews and buying across the entire organisation. We’re able to reinvest savings directly back into our charitable activities and have the confidence that we’re receiving the best possible market value and service from suppliers.

Having worked alongside Auditel for a number of years in a previous role, Cathy already understood the benefits that the services of an independent third party could bring. When the time came for a procurement review, Auditel were brought into the mix on Cathy’s recommendation. After a successful initial trial, Auditel, in the guise of Adrian Burton and Neil Crook, were engaged by the charity.

“Our in-house procurement manager had moved on and we therefore had the chance to take stock and see if there was a more efficient way of doing things – we felt there was the opportunity to get better value for money,” explained Cathy. “We met with several companies and Auditel stood out for their knowledge and experience, as well as their no-nonsense approach and the flexibility of their charging structure. What we have now is a relationship which is beneficial to the company, both financially and operationally.”

Auditel now undertake the management and review of overhead costs, acting as Sense’s outsourced procurement department. Whilst key cost categories are detailed, Auditel’s flexible approach continues to meet the ongoing needs of the organisation.

Detailed analysis brings savings and efficiency gains

On utilities and waste, a combination of comprehensive tender processes, the renegotiation of contracts and the removal of broker fees on gas resulted in significant annual savings. In addition, Auditel were able to secure tens of thousands of pounds worth of rebates for both gas and electricity charges along with the installation of smart meters across the estate. A common complexity with multi-site, multi-contract accounts, Adrian and Neil rationalised electricity invoicing by consolidating supplies to one Corporate account. Sense now have much improved visibility and control over spend.

Negotiations with the incumbent supplier for cleaning products saw a reduction in pricing as well as the introduction of an alternative, own-brand product list. Auditel continue to work with Sense to monitor and encourage the uptake of the new list by its sites across the UK. A significant area of spend, with over 2000 different products purchased over the last 12 months, Stationery was a key cost-centre for Auditel. During a formal tender process, the incumbent, and several alternative best-fit suppliers, were invited to present recommendations to reduce the current spend. The contract was awarded to a new supplier offering an innovative solution for cost savings and streamline of supply.

“The added resource Auditel bring means that I can to focus my time where it is best used and I’m able to direct their efforts as and where needed. Adrian and Neil are incredibly helpful and go out of their way to solve problems for us,” said Cathy.

Following a comprehensive audit of company mobiles, negotiations began to remove over 150 inactive SIMS from the contract and consolidate all individual contracts onto one common end date. In the final deal, all penalties associated with combining common end dates were removed, the price of 4G data bundles was reduced and new, up-to-date SIMS were reissued. Sense now benefit from increased services, where data is representative of individual’s usage, at a reduced cost. Supporting the transition of Sense’s new IT Director, Auditel reviewed several contracts to allow for a full assessment of future strategy and requirements. In the interim, a new, cost-saving broadband contract was negotiated and implemented.

Both the machine lease and the service elements of the Photocopier agreement were reviewed. Auditel reported that the contract was geared solely in favour of the supplier. By way of example, Auditel highlighted that three 15% annual contractual price increases had been implemented by the incumbent along with two additional 8.5% increases for spare parts. Significant savings were secured in a cost-for-copy tender and rebates were negotiated along with the return of numerous obsolete and inactive units. Auditel continue to closely monitor and manage the incumbent, regularly intervening to dispute any additional invoices submitted and secure a cost-free resolution.

Contract reviews and supplier management

“Another key area where Auditel have supported us is in managing suppliers and how we avoid problems going forwards,” said Cathy. “A prime example being property, and the fact that we were always falling foul of non-contract pricing structures when taking on new sites. Adrian and Neil have helped us to implement a simple but strict internal process for locating utility meters, cataloguing serial numbers and readings and liaising with suppliers prior to the change of tenancy, thus avoiding excessive charges. More recently, Auditel were able to negotiate with a third party around complex GDPR issues. Not only did they ensure that the data in question was correctly handled but the proposed charges to us from the supplier for the service were negated.”

As well as a strategic procurement service, Auditel provide advice and oversight on new contacts across the board. Such reviews ensure that contract terms are fair and reasonable and do not contain detrimental termination clauses or other such hidden penalties. Not only does this give peace of mind for Cathy and her fellow directors, it also strengthens the charity’s position for future renewals and renegotiations.

Initially retained for 12 months, Auditel’s holistic approach has seen their contract extended on two consecutive occasions with the latest seeing the partnership run until mid 2021. Future projects include Water, Laundry, Merchant Card Services, Franking Machines and ESOS compliance.