The UK has the 43rd fastest broadband in the world and is 6th out of the 7 G7 countries with only Italy being slower.
That said, Europe is still by far and away the fastest. All 29 countries measured in Western Europe were in the top half of the table, countries in the region taking eight of the top ten spots in the world for internet speed. The regional average speed of 90.56Mbps makes it the fastest of the 13 global regions overall.
The data was derived from over 1.1 billion speed tests taken in the 12 months up to 30 June 2021 and spanning 224 countries.
It’s clear that the signs were there for all to see if a recent article from px Group is to be believed.
They should know as they operate a number of assets that feed in to the National Grid and claim that there were no fewer than 6 margin calls from National Grid – times when forecasted half hourly supply will not meet forecasted demand – in the winter of 20/21 vs 2 total in the whole period from 2011-2019!
Sure, we’ve been caught in a perfect storm now as i) the weather has meant a lack of wind supply at the same time as ii) Asia has increased it’s requirement for gas while emerging from the pandemic and iii) UK gas storage is at an all time low.
That said these issues haven’t suddenly occurred. They’ve been creeping us on for months if not years so were the warning signs there and was it possible for producers & providers to have taken action sooner?
Reading time: 4 mins
Outcome: cheaper, more accurate bills
£4.5m. Could your business deal with that fine?
The Low Down
Last month British Gas Business agreed were penalised £4.5 million for failing to deliver smart meters to their large business customers. I could tell you the differences between meters and about the art meters have inspired. However, worrying about that kind of information is only necessary for my team at The Procurement Group and me. Although, we do not focus on art! Plus, I promised I would keep the reading time to 4 minutes.
What does the penalty mean for your business?
Now to the juicy parts. Ofgem did not tell you what we often forget about our providers. Instead, we think about the huge bills our suppliers just sent and how much they charged you last quarter.
It is easy to overlook that, like you and I, they have growth targets, profit goals and infrastructure plans to meet. Penalties hit those plans. Therefore, the fundamental question to ask is ‘why did British Gas not install the smart meters?’.
The answer; to get more money from their business customers. If you do not have a smart meter, you will receive estimated bills. Suppliers overestimate, and you lose out because your business has to pay the providers more than your usage. Without smart meters, you pay more on every bill, for every site.
How does this affect your business?
Think about how much the estimated bills increase your business costs every month. Now multiply that by 12, and consider how much money you are wasting on your providers every year. Ask yourself, what could your business do with that amount of money? You could employ efficient new colleagues, fit out new sites, present improved profits to the board. However, you cannot. The suppliers have that money because they have not installed smart meters.
Are you angry? Good. Keep on reading.
How can you protect your business?
Install smart meters and get exact bills! No more estimations and no more suppliers celebrating their profits, while your business loses out. Additionally, to get smart meters in every site, just ask your supplier. The responsibility to fit the meter is on them. It will not cost you a thing.
Hang on a minute. You have almost finished this article, and you still do not know who’s having the conversation?
Smart meters have a sim that talks with a data collector and the supplier; thus, providing precise bills based on usage. It is the meter, data collector, and the supplier that must communicate with each other. To receive precise bills, the three of them must talk to each other. Naturally, providers do not want your bills to be exact. Therefore, this conversation happening is a problem our customers regularly face. So make sure they are talking by checking that your bills are accurate, not estimated.
Let’s go back to that money your business is wasting because of estimated bills. Now, let’s install smart meters at every site and ensure the communication channels are active on each smart meter.
What did you say your business could do with the money wasted? Let’s do it.
Simon Unger is the MD of The Procurement Group, specialising in saving your business money. If your business is spending too much, let us help you save.
The larger your business, the more leverage you have with suppliers. Instead of suppliers manipulating their pricing for maximum profits, you’re able to use your spend knowledge to leverage buyer power, bringing cost savings to your business, while still making it a valuable proposition for suppliers to favour working with you.
It all starts with categorisation.
Using categorisation of sales to leverage bulk price discounts
1) Item categorisation
It’s one thing to list an item but it’s quite the other to tag it to the right category. One way to categorise items being purchased is to use a hierarchy.
Take for example replacement keyboards for computers. You could categorise that as office supplies. Using the hierarchy above though, that could be computing as the chief category, the main category, electronics, and the subcategory, replacement parts.
Costs could be cheaper by buying in from an electronics supplier offering bulk price discounts that aren’t on offer from a general supplier of office equipment.
The choice of categories gives your business more choice over suppliers rather than sticking to one general area. The reason being, suppliers in a specialised category will have a higher price per unit and therefore charge more for their expertise. It’s not to say you couldn’t get a better deal elsewhere on the same equipment.
Categorise what you buy so that you can accumulate the most units per supplier based on your category hierarchy to take advantage of bulk unit pricing.
2) Supplier categorisation
As the first step is about maximising the units you buy in at one single time to take advantage of bulk pricing, this part strengthens that to ensure that whatever you are buying, you’re only dealing with the minimum number of suppliers. That’s advantageous in itself, however what it’s also doing is putting buyer power in your favour because the more you order with one supplier, the better leverage you have to negotiate better pricing per unit.
3) Maximise category budgets
Whatever category’s your business spends on; you need to know them in order to maximise them. Ideally, what you want to do is lower the number of suppliers which reduces your administration costs, but more importantly it increases your spend per supplier. That again, puts buying power in your favour. The best scenario would be to find one supplier who can deal with your chief category, main category and sub-categories.
4) Leverage your buying power
The categorisation of items you buy will let you narrow your choice of suppliers but that’s useless if you don’t play it up. When you request a proposal for anything, stress that you’ve categorised expenditure and let suppliers know your overall budget at an organisational level and that you expect favourable pricing based on the volumes of transactions. This will also help you take out any supplier that isn’t large enough to cater to your needs.
5) Review and negotiate if you need to
When you categorise your expenditure and assign budgets to categories and then further add to that multiple sites, there’s often times extremely large volume. Sufficient enough to leverage discounts provided you work with a supplier who can meet your demands.
Some will be too small to manage your demand. Larger suppliers are often more expensive until bulk price discounts are applied because that’s the business contracts they are focused on attracting. When you match your contract requirements to the specialities of suppliers who target your type of business with volume discounts, there’s huge cost savings to be had.
The fastest way to access the savings is by categorising what you buy, lowering the number of suppliers you have and increasing your spend budget per supplier in order to make it attractive for suppliers to propose discount pricing.