How 50 sites got new copiers & 15% savings

Our client the United Synagogue operates 50 sites, the majority of which are within inside the M25. They have been a client of The Procurement Group since 2006 and we value the long-term relationship that we have with them.

The Procurement Group have been saving UK businesses money for over 20 years using our procurement management techniques to drive down their business costs.

In this instance, the United Synagogue had no formal strategy for acquiring photocopiers and The Procurement Group identified this, which led to this project starting.

The main issue was that every site had its own contract, meaning that there were over 30 different suppliers. Each supplier had a different contract end date, different pence per copy charges, different termination requirements, and provided different manufacturers equipment. This made the estate very hard to manage for the United Synagogue’s in-house IT department.

The Procurement Group (TPG) try to simplify clients’ lives wherever possible.   In this instance, we saw the opportunity to deliver a single contract, from a provider who would exit the United Synagogue from all of their existing contracts and still deliver a saving.   The benefits to the United Synagogue would be that they would have brand new standardised equipment across their estate and also that they would have one transaction a quarter going through their bank and accounting system rather than over a hundred as was the current situation.

For this project to work, TPG had to have a thorough understanding of what was being paid at each of the 50 sites currently.  This was actually the hardest part of the exercise because we had to contact each site and some of them don’t work five days a week so it was a difficult task to fulfill.  To achieve this each site was visited and it was established what equipment they had, how old it was, how many copies they’d done, whether it was owned or leased and how copies were paid for – pence per copy or by buying consumables.  That way we’d established a benchmark.  

TPG then engaged operationally with the United Synagogue to understand their requirements going forward at each site, drawing up a list of the equipment specifications required, tendering the business, arranging beauty parades for the client to meet with suppliers to understand who was the best fit, and then to negotiate the contract with the suppliers. 

Working closely with the United Synagogue’s head office team, we were able to achieve this and ended up delivering a 15% saving across the estate guaranteed for three years.  It was important to both the United Synagogue and TPG that title to the goods passed to the client at the end of the initial three-year term because usage is very low at each individual site and therefore, the equipment would be in good condition rather than need replacing which is the norm in the copier industry.

TPG like to take a long-term view of situations and rather than delivering the maximum savings at day one, in this case, agreed a two-step approach with the United Synagogue.  The first step was to get the estate consolidated with one supplier.  As an outcome of this, we were also able to install software which recorded the exact usage at each site, thereby, overcoming one of the biggest hurdles we all had at the outset which was actually understanding what the usage was.  The second stage will then be to retain the existing equipment and enter into simple maintenance agreements for all of the equipment going forward, meaning that the lease payments for ownership of the equipment disappear and deliver significant savings to our client.

This is an example of how TPG bring their considerable experience to bear for the benefit of clients and deliver long-term solutions, thinking outside the box and always taking the best route for their clients, whether or not that impacts on TPG’s revenue in the short term.

If you’d like to find out more about how we use cost reduction and spend optimization workflows and processes to analyse business data in order to ensure that we deliver best value for all of our clients in whatever sector they operate, then contact me, Simon Unger, on 07768 421901 or simonu@procurementgroup.co.uk

How Small Businesses Could Be Wasting Money

In this economy, every business is cutting costs wherever they can in an effort to make ends meet and increase profits.  Small businesses, in particular, have to work even harder to avoid wasteful spending because they have fewer resources than big corporations.

Here is a list of some of the ways that small businesses may be wasting money:

1.  Not making energy efficient choices:

The most common way small businesses lose money is through using appliances and fixtures that are not energy efficient.  For example, switching to fluorescent light bulbs could save up to £10 per kilowatt hour and turning off desktop computers in the evening could save £20 per computer per annum.

2.  Unnecessary food costs:

Constant lunching and trips to the local coffee shop could have an impact on your budget, especially if you have a tendancy to treat the rest of the office.

3.  Not chasing debts:

Many small businesses don’t have their own accounts department to chase unpaid debts and keep track of their own due dates.  This can cause an impact on cashflow and potentially result in unnecessary bank fees.

4.  Unwise Advertising & Marketing Decisions:

Online advertising can be one of the fastest ways of reaching a large audience of prospects.  However, using some online advertising methods, such as pay per click adverts, can be a costly waste of money if used improperly.

When deciding on your advertising methods, it is important to remember to take account of the return on investment to make sure it is worth the money spent and is bringing in enough sales.

5.  Losing track of the small costs:

20p or 50p here and there may seem insignificant, but they can add up in the long run.  For a small business, it is crucial to stay on top of where the money is going and the everyday expenses that can cause problems with your cashflow.  For example, if you overpay on each envelope by 10p and send approximately 30 letters a week, this would add up to an annual loss of £156.  In this scenario, it may be more sensible to purchase a franking machine to make sure there are no inaccuracies.

6.  Settling for the price tag:

It is a misconception that discounts are only for big companies who buy in bulk.  Many companies offer surprising discounts for small businesses in exchange for repeat business.  You may also be able to negotiate additional discounts for paying your bills promptly.  If you want help liasing with your suppliers to see what you can save today, the Procurement Group can help you.

What is Procurement and How Can It Help?

Procurement is defined as “the act of obtaining or buying goods and services”.  But in a commercial context, it usually involves a business bringing in a consultant to review all of their outgoings and identify where potential savings can be made.

The procurement specialist will use the combined purchasing power of their clients, together with their network of suppliers, to leverage increased savings for the business.  The Procurement Group, for example, guarantee to make substantial cost reductions within 4 weeks and our average saving is 25%.

But it’s not all about the money.  Procurement specialists will also usually do the following:

• Managing supplier relationships;
• Handling paperwork;
• Watch for new opportunities;
• Invoice validation;
• Arranging consolidated invoicing;
• Resolving historic billing issues;
• Match (or improve) service levels;
• Producing accrual schedules;
• Serving terminations on suppliers;
• And much, much more.

All of these jobs help to free up key employees to enable them to focus on the core business.

We understand that for many businesses, service levels are as important (if not more so) than the cost, so we work with you to ascertain any suppliers that you wish to retain and always try to improve (or at least match) the service levels of any existing contracts.  We provide a range of quotes for every area so that you can decide what best suits your business.

How Are Procurement Specialists Paid?

At The Procurement Group, we are so confident that we can save your business money, that we won’t charge you a penny if we conclude that savings can’t be made.   If savings are made, you pay us a percentage of the savings that we make for you and because we invoice quarterly in arrears, you will quickly see a positive impact on your profit and loss and cashflow.