Chris Allison, Managing Director of Auditel, Ireland’s growing cost management consultancy, comments: “You’d be in very good company. According to Deloitte’s third biennial cost survey 2013, 76% of respondents expect their company to reduce costs over the next 24 months. However, the survey also found that in 2012, the failure rate for cost initiatives climbed to 48%, meaning that nearly half of all initiatives fail to achieve their goals.
“Our own recent survey with Management Today, suggests that the majority of organisations are focussed on simple cost cutting or cost reduction exercises. Effective cost management, on the other hand, requires software tools to monitor what is done effectively. Then there must be a process that gives management information to the decision-makers, both at the start and through the ongoing activity, when improvements have been put in place. Many companies lack this facility and an increasing number have decided to outsource for specialist knowledge.”
Over the past 20 years, Auditel has worked with more than 5,000 firms and has delivered greater returns than their in-house resources could achieve. Although energy and communications are usually top of the agenda, Allison says that more than 80 different business expenses are covered. For example, savings between 30% to 60% have been made on janitorial supplies, print, clothing, water, cleaning, stationery, photocopiers, waste and intruder alarms.
Reagecon are based in Shannon, Co. Clare. They are one of the largest producers of Physical and Chemical Standards and occupy a unique position in terms of range, scope, breadth and depth of products offered. These are in excess of 4,000 certified, accredited standards and reagents and supplies of over 100,000 separate pieces of laboratory consumables, apparatus and equipment.
In 2013, Don Foynes, their Commercial Director, engaged Auditel. He reveals that they have achieved between 10-50% savings across eight different cost categories. The net savings and bottom line impact will be in excess of €250K over the next three years. There are also many indirect benefits from the cost reductions put in place, such as downstream labour savings due to revised packaging formations.
He adds: “Another positive outcome is that due to a revised logistics programme managed and co-ordinated by Auditel, we can now get our products into emerging markets. I would describe their service as a process that lifts the lid on your cost base and provides detailed proposals on what can be achieved. It then presents and manages the implementation of the solution.
“The staff at all levels are highly professional. The knowledge that the particular experts in the various areas can bring to your business is huge. In short, Auditel does what it says on the tin – ‘lowers the cost of doing business and takes cost and purchase management to a new level’. With Auditel, I have 100% confidence!”
As Chris Allison points out: “There is a difference between cost cutting and cost management. Cost cutting is a one-time attempt to decrease your expenses. Cost management is an ongoing task of monitoring your expenses, keeping track of what is spent and constantly watching the marketplace to ensure that you are receiving the best value for your pound. Even if you think you’ve got all your essential costs under control, it won’t hurt to make sure. Why not book your Auditel Business Health Check plus a Financial Health Check today and add to your bottom line this new year!