Auditel is the UK and Ireland’s pioneer of strategic cost management. For the last two decades, their team of over 200 highly skilled professionals, has built a reputation as trusted advisors to owners and directors of medium and large organisations. They undertook extensive research on this crucial topic through the influential business publication Management Today. These statistics were derived from over 120 business leaders:
- 70% of organisations do not have a cost management strategy in place
- 73% of organisations undertake cost management measures in-house
- Less than 2% claim to track costs, or have an on-going programme
- Two-thirds recognised that strategic cost management can accelerate performance, improve efficiency and gain competitive advantage.
Commenting on the research, Auditel’s Managing Director, Chris Allison, said: ‘Auditel commissioned this survey as it is clear that cost management has an increasingly important part to play in safeguarding the financial health and prosperity of a business. The answers revealed that there is a genuine lack of understanding between simple cost cutting exercises and strategic cost management.
‘Many still choose to divert in-house resources to carry out cost management exercises that do little more than scratch the surface of what is achievable. This costs a considerable amount of time and money, as few organisations have the people, tools and knowledge to manage their costs effectively and deliver sustainable improvement in profit. In fact, as suggested in a recent KMPG survey, 95% of cost reduction exercises fail and costs come flooding back.’
Over the past 20 years, Auditel has worked more than 5,000 businesses. Here is a case study taken from one of their recent clients:
Party Packs, based near Wells, sell a huge range of party products and have an incredibly diverse customer base including schools, play centres, charities, local authorities, police and armed services.
Auditel first came to the attention of owner Kate Turner, at a networking event. She says: ‘They were explaining the significance, not just of keeping an eye on costs, but of having a strategy for managing them. This is of particular importance.
‘Looking at some of our big spends like couriers and packaging was something that we knew we needed to do. However, the day-to-day running of the business always took priority. Dealing with the minutiae of the price of every box and envelope and comparing prices is very time consuming. To engage with Auditel would also give us access to experts in delivery costings. They understand the importance of reviewing not only costs but the processes behind them, which show how warehouse operations can be made more efficient.’
Auditel’s detailed findings and recommendations for improvement have since generated savings of more than £145,000. They also walked the warehouse staff through the changes and ensured that all were happy with the new process before final handover.
Kate sums up: ‘Auditel have removed the hassle of dealing with our overhead costs .They review the invoices each month and correct any errors made by suppliers. This gives us comfort that we are paying the right amount and on the agreed terms. They continue to negotiate with suppliers where price increases have been proposed and keep us informed of any industry changes that we should be aware of. They have always taken the time to understand our business and considered what is important to us, not simply aiming to deliver the lowest cost. ‘
Party Packs were impressed with the results and asked Auditel to examine other costs. Additional savings made were £1,000 on telecoms and £14,000 on merchant card fees.
Chris Allison adds: ‘So, if you are looking to free up your in-house resources, Auditel can offer everything you need to put your cost management strategy in place. This will lead to improved efficiencies, accelerated performance and help to gain a competitive advantage in your field. Book one of our Strategic Cost Reviews and enjoy the tangible benefits and peace of mind that Auditel’s highly effective cost management services can deliver.’