Top of the pile

When the recession bites hard, many organisations are underprepared and begin to struggle with their financial targets. James Payne investigates how cost, purchase and supplier management franchises have helped businesses buck this worrying trend.

Up and down the country, crisis meetings are being held to discuss how to survive the recession and reduce the impact that any ‘double dip’ may have. Sales teams are under increasing pressure as they are tasked with maximising revenue streams, just so that the business can stave off the threat of making redundancies again.

In these financially tough times every penny counts, so imagine if you had the answer to this global epidemic.

Across the UK, organisations are benefitting from the services of cost, purchase and supplier management specialists, a unique business offering where professionally trained consultants are brought in to investigate any ‘profit leaks’, identify alternative solutions. In addition, the consultants involved then take the process one step further and actually manage the changeover process, making sure the transition to the new supplier proceeds without a hitch. The client can rest easy without having to get involved, leaving them to continue with managing their own businesses.

In many circumstances, the dedicated consultant will be able to identify savings with the current range of suppliers without the need to change to an alternative service provider. Such is the depth of knowledge and purchasing influence – as a result of the millions of pounds worth of spend already under review – that the procurement expert can make a positive impact to the organisation’s bottom line without changing a thing.

Roy Bayliss, one such consultant, comments: “We really add value by streamlining our clients non-core costs, meaning that they can benefit from substantial savings while improving the bottom line significantly, without the need to increase sales targets.”

The changing face of procurement

A recent McKinsey Global Survey revealed that reducing operating costs is top of the agenda for Financial Directors and Chief Financial Officers (CFO) in the current austere economy.

The same survey revealed that many believe that:

  • They are currently not getting the best prices
  • Managing these areas of expense is mission critical for improving their business
  • Lowering costs from suppliers is one of the biggest challenges they currently face within expense management

What’s more, most CFOs feel procurement is important to finance but many lack the understanding or know how to influence it, with many commenting that effective procurement is increasingly becoming a function of the finance department in the same way that sales has become a function of marketing.

In reality, organisations know that reducing their costs is important to improving their bottom line, but as they are not procurement specialists, they are unsure on what to do next.

A Cost, Purchase and Supplier Management Consultant is able to become a trusted advisor to that organisation, ensuring that savings remain competitive while maintaining supplier relationships. It is this process which makes many clients continue to engage these procurement experts well after the initial contract has been passed. In fact many clients are realising the value that a trustworthy professional brings to their business with many signing multiple projects across areas of their business ranging from stationery, marketing fleet, insurance cost management and logistics.

Simon Perkins, a Consultant who became an Expense Reduction Analysts franchise owner in July 2010, says: “The great thing about this business is that we are able to provide savings in over 100 areas of cost, purchase and supplier Management. The experience in our network means that we never have to turn a client away. How many businesses can genuinely say that?”

In today’s economic climate, the number one challenge that most organisations face is to reduce costs. Businesses are aggressively streamlining core expenditure, yet many of them are still overpaying by as much as 40 per cent on their every day operating costs. By engaging an expert in cost, purchase and supplier management, businesses are able to improve their bottom line far quicker than if they were increasing their sales alone, and with a safe pair of hands supporting them along the way from a Cost, Purchase and Supplier Management Consultant, the green shoots of recovery are evident for all to see.