Auditel Consultant:
Lee Freeman

The free management consultant

02 Aug 2010 | Filed under: auditel, cost cutting, cost management, government, savings, The Budget

It is not often I like to start one of my musings with I told you so, but this Monday I will. It is with thanks to one of my fellow affiliates, Simon Beechinor, who brought the article below to my attention.

http://www.telegraph.co.uk/finance/comment/tracycorrigan/7905344/The-public-sector-should-learn-lessons-from-companies-but-carefully.html

How could I have missed such a gem. A journalist on a national newspaper agreeing with a number my comments since the Emergency Budget back in June 2010, in that the Public Sector will not be able to deal with achieving the reductions in spend targeted without assistance from the private sector.

There are a couple of points in the article that as a professional cost management consultant I disagree with although others that I am in complete agreement with. One area where I am in complete agreement concerns the author’s comment on the numbers game. This is a prime example of why a number of firms cannot achieve cost reductions themselves, and one I am sure most of us have seen in action at some point throughout our careers. I recall a previous employer making redundant a non performing managing director of a division, only to “reemploy” said individual the next day on a lucrative consultancy agreement that was probably worth nearly the same amount as the pay they had been receiving up to the day before!! What was the point. Yes it made some nice noise that we will not tolerate those that under achieve, which was then washed away by having them back as a consultant. Headline permanent staff reduced by one, costs stayed the same!!

Items 3 and 4 in Tracey’s article can almost be taken hand in hand. I am of course in complete disagreement with the statement in comment 3 that “only weak managers employ consultants to cut costs as they should be able to do it themselves”. I have to admit there is an element of truth in that managers should be able to reduce costs however the underlying data that we at Auditel have collected over the last 15 years proves they cannot, well at least in the long-term anyway (excluding staff costs in this discussion). Yes many can achieve some short-term reductions but these costs soon start creeping up again once focus is diverted elsewhere. In fact I believe it is an enlightened manager who uses consultants to not cut costs but manage them over the long-term. This individual recognises that he does not have the skill set within his team to achieve his objectives and so employs someone (be them an external person) who does. What more with the Auditel proposition this does not cost him anything upfront, as the consultant is only paid once actual savings have been achieved. What fantastic news, a self financing consultant, who improves the profitability of the business, why shouldn’t you take advantage of that service.

This brings me to the last subject of procurement. It is because there is so much choice in the market place that the employment of an external consultant is the only way forward, and the reason why Tracey’s comment that “I keep switching provider to no avail” does ring true for a number of firms. Why I hear you ask. Often they have been seduced by the flash marketing literature or BMW driving salesman who promises them the best deal on say mobile phones if they change to supplier X. This may be true but only for a small period of time. Once the commission is paid to said individual, (often by the network provider themselves) he (or she) has no incentive to look for the next best deal for this company, just target the next company and persuade them to move. It is only if this cost is managed over a long period that true savings can be achieved. Using someone like Auditel means the chance of the company being on the “best” (service level as well as price) deal is greatly improved. My fellow affiliates and I are constantly reviewing the offerings in the market place, probably testing the market and asking for quotes from suppliers on say mobile phones up to 10,000 times a year, as we manage the cost over the long-term. This must mean that the chance of the company being on the best current deal for their organisation is greatly increased.

And the best news, the service is free, as mentioned above any remuneration for myself and my fellow affiliates is paid from the savings we achieve!!

Industry Tags: auditel, cost cutting, cost management, public sector