Auditel Consultant:
Lee Freeman

The Baker’s dozen – part two

07 Feb 2011 | Filed under: auditel, cost management

I hope you enjoyed the first set of tips on cost management published last week. If you missed it please click here www.auditel.co.uk/leefreeman.

So here we are with the next instalment. Before I dive into this though I was interested last week with the mystery shopper programme on Channel 4 Wednesday evening. Now this is not normally my cup of tea, but the topic of mobile phones intrigued me. I caught the end of the programme and a lot of the comments I was hearing made perfect sense. An overriding theme though just confirmed a message I have been sending out for a while and that relates to the amount of money we waste on our mobile phones by buying packages that are inappropriate for our use. Believe me this is not restricted to the consumer world. A recent exercise I undertook for a client of mine showed they has spent approximately £5.5k over the last 4 months for data access on their blackberry fleet. A quick review of the tariffs each device was on revealed about 30% of the devices on an inappropriate tariff to their usage. I estimate that changing to the correct tariff for the usage would have reduced the cost over the same period by over 90%!!! Now that is not a saving to be sniffed at.

Right anyway onto the second part of the hints and tips:

3. Build an inventory of contracts

It is essential to build up an inventory of all supply contracts and as mentioned in point 1 from last week make somebody responsible for maintaining this.
The information you need to record is relatively straight forward but should include the following as a minimum:
- supplier and service provided
- start and end dates of contract
- termination and notice clauses including any rollover provisions
- units covered and
- costs for service including discounts
- service levels
- make sure all renewal dates are diarised including allowing a date for serving termination notices on the supplier within the contractual terms

If I refer back to the tariff example I used earlier, one of the reasons individual devices were on incorrect tariffs was that the client did not understand the options available and the flexibility that their contract allowed them. There was also no central database which detailed the services/tariffs applicable to each device within the fleet.

4. Question the need for the service

Does that need still exist?
Review the process and re-engineer if necessary, making sure that any redundant services/products are cancelled.
Re use product if possible.
Recycle waste product, again if possible.
Set objectives for the service/product including service requirements, service levels required and cost parameters.

It still amazes me the amount of times I visit clients and find they are paying for services they no longer require or use. One of the prime examples is companies’ paying for additional phone lines for fax machines when the company may not even own any fax machines in today’s different technological world. I have also come across situations where companies’ have embraced modern technology and installed video conferencing facilities, only for this service to now be hosted over their computer network rather than the telephone lines previously used. However the telephone lines are still being paid for even though they are no longer used!!