Chris Allison, Managing Director of Auditel, the leading UK the leading UK and Ireland’s cost management consultancy, says:, says: “Here is one illustration. Let’s suppose your gross profit is 25% and you have made a saving of £100,000 on your business costs. To make an equivalent profit through day-to-day operations, you would have to generate £400,000 in additional sales.”
According to a survey conducted for Auditel by Management Today, although cost management is on the boardroom agenda for 82% of organisations, 70% do not have a strategy in place. Furthermore, the greatest obstacle is a genuine lack of understanding between simple cost cutting exercises and strategic cost management. 73% undertake this process in-house; yet experience suggests that they are ill-equipped to deal with the task.
Chris Allison comments. “Most organisations don’t have the tools to benchmark costs accurately and then monitor them after implementing cost savings. In fact, less than 2% of the survey respondents claim to track costs or have an ongoing programme. That’s why, as suggested in a recent KPMG survey, 95% of cost reduction exercises carried out fail and costs come flooding back.
“Over the past 20 years Auditel has worked with more than 5,000 firms. We can say with some certainty that strategic cost management driven by the right people, with the right tools and knowledge can lead to improved efficiencies, accelerate performance and gain competitive advantage. Outsourcing your cost management to Auditel can achieve real cost savings, reduce waste and free up in-house resources.”
Here is one example:
Besana UK Limited is one of the largest fruit & nut distributors in Europe
Auditel were initially engaged to look at electricity costs which were found to be out of contract. They were immediately placed in contract, which delivered a 30% saving amounting to £24k pa.
However, due to Besana’s imminent relocation, further projects were put on hold, until Auditel were asked back to help with the move.
General Manager Simon Melik comments: “Relocation is a complicated and stressful process, but it also offers a good opportunity to ensure that all the essential services and products are a proper fit for an organisation’s needs. Auditel’s assistance has been invaluable. The time they saved myself and my staff has been of enormous benefit during this period and allowed me to concentrate fully on our customers.’
Mr. Melik continues, “Auditel handled everything with great professionalism and attention to detail. This included an upgrade of our power supply and the installation of a new telephone system and data circuits. Auditel also oversaw the installation of an LPG tank, air-conditioning units, water coolers and heating system and sourced new office furniture.
“In addition, they tendered for waste contractors, cleaning contractors, stationery suppliers, janitorial suppliers and a laundry service for our new premises. They also handled the termination of all contracts at our old premises. An analysis of mobile and courier contracts is planned for later this year.
“Last, but by no means least, I would like to thank them for the impressive savings they have made. lf we had not engaged Auditel we would not now be benefitting from annual savings of £24k pa (30%) on energy, £11k pa (52%) on office supplies, £15k pa (67%) on janitorial supplies, £13k pa (40%) on telecommunications and £13k (32%) on waste.
Mr. Melik concludes: “The advice, reports and recommendations we received were always thorough and precise. I have peace of mind that our best interests are being taken care of and would have no hesitation in recommending their services to other organisations.”
As Chris Allison says: “So, even if you think you’ve got all your costs under control, it wouldn’t hurt to make sure. If you don’t want to disturb your Sales Director, simply contact Auditel for a Business Health Check!”