Pension reform will gradually affect all businesses employing staff.  This starts in October 2012 and over the next few years will gradually affect businesses from the largest to the smallest.

If companies do not take early action they will be left putting arrangements in place at the last possible minute.  Without doubt, those that rush into last minute arrangements stand a greater chance of picking the wrong deal for them and their employees.

A Group Pension Scheme is something that any business can prepare for in advance.

With this in mind Avenue UK have selected Aegon, a leading provider of Group Pension Schemes who can make sure you have the right pension scheme in place.

The Avenue Purchasing Group, in partnership with Aegon is delighted to offer an exceptionalGroup Pension deal.

The offer is available to those setting up a new scheme and those wishing to review existing schemes to get their pension scheme members a better deal.

Check out the Group Pensions Scheme page on the Avenue UK site or contact us for more information.

I was at a gathering of business folk the other day and ended up having one of those conversations that make you raise a quizzical eyebrow.  That said, it did make me realise that saving money; reducing business costs; fiscal efficiency; improved profitability etc…. just isn’t for everyone.

So I had best tell you what happened and what it has led me to think.

I have known the chap in question for a while and he is well aware of the fantastic savings that the Avenue Purchasing Group is delivering.  We were in fact talking about a client of mine, a Recruitment Firm, who had just reduced their annual spend on Landline Telecoms (lines and calls) from £29k to £21k - an excellent saving of £8k.  It was at that point, that  the chap, having worked out it would mean a saving for his business of around £6k, said the trouble was that he and his other directors could not get excited about saving money as it was not that important, although he said it should be.  Wow!

I just wonder if he saw £6k dropped on the pavement, whether he would stop and stoop to pick it up…. My view is, that of course, he would.

It led me to thinking of what questions a potential client would need to consider before deciding to connect with Avenue UK about benefiting from the cost savings that the Avenue Purchasing Group delivers.

Here they are:

1. Would your organisation benefit from reducing its business overhead costs?
2. Would you be interested if there was a cost free way of identifying how much money your organisation could be saving?
3. Finally, would you be interested in delivering those opportunities to benefit from immediate and sustainable savings – without having to pay a fee?

So, if your answer to any of the above is no then, like the chap above, Avenue UK is not the right organisation for you to be talking to. But, thanks for reading this far.

But, if your answer to all three of the questions was yes, then contact me and we can arrange some time to meet and discuss further.

The economic outlook is uncertain at the moment and so, in my mind, there is every reason to strive to be as efficient as it’s possible to be.

This weekend saw my eldest son score his first ever goal for his football team.  Needless to say that after 5 years of waiting he was very very happy – and so was I.  It’s not often you see the ref jumping up and down (yes, I was the ref).  To be fair on Mikey, he is a defender and so opportunities to score  don’t often come his way.

Other than being an excited dad at football the last couple of weeks have been very busy.  Here’s an overview…

I was lucky to be invited to present at a CFDG conference to a group of Charity Finance Directors  at the office of Grant Thornton in Leeds.  The Conference was well attended and I thought all the presentations were insightful.  The whole concept of the conference was around  Collaboration and Shared Procurement and speakers covered VAT and Tax issues as well as the operational implications around collaboration.  My presentation looked at the merits of various types of collaboration from Joint Ventures up to Purchasing Groups.  In the preparation for this conference it was interesting for me to look at how the Avenue Purchasing Group approach fit in with these other options – which of course it does as a best practice model.

I also held a number of meetings with Suppliers over the past fortnight for supply areas that will soon appear on the site as Supplier Solutions.  Keep an eye on the site to see these come onboard.

The Landline Telecoms deal is working very well with a number of clients now having switched contracts onto this deal saving anything from 40% to 60% on calls and up to 20% on line rental.  I now love analysing Telecoms contracts as the result is always exceptional – and its great to feed the good news back to clients.

I did title this piece “a first time for everything’ and that wasn’t just to recognise my son’s first goal.  I find that companies are sometime reticent to meet because of the number of times they are badgered by other companies who, in the words of a friend of mine…. promise the world and end up giving you an atlas…..  or worse !

The whole idea around the services I have created is to provide top level consultancy solutions in a way that is affordable.  Creating services like Purchasing Support and the Avenue Purchasing Group was done to provide the means by which all companies can have access to the best solutions, service and price that it is possible to get for them.  These services are innovative and I would like to think the first to operate in the way they do.  They are client and service focused, but yes, we will help you to reduce your costs.

A number of existing clients are now referring us onto others they know, which is best possible reference one can ask for.  Thank you those who have done so.

So, thats enough for a quick update (!) but for those of you out there wondering what Avenue UK could do for you, feel free to give me a call and I will show you what can be achieved by working in partnership with Avenue UK.

So the summer is nearly over and the kids have returned to school.  I hope you all enjoyed some sun over the past couple of weeks.

Since my own return from holiday, I had an interesting conversion with one of my preferred suppliers about how sourcing teams ‘claim’ for savings they make and what they do in the following year after the initial (in the year – ITY) saving.

My view was, that if the contract would have continued at the old rate had the saving not been generated, then it is fair to claim ‘Roll’ for year two etc….  although I appreciate not all Finance functions would easily agree to this.

The supplier then asked whether there were any areas where you could get two savings at the same time.  Good Question! Here’s one example:

Saving 1:      If it is something that is bought by the unit and you negotiate a reduction per unit, you claim the saving based on volume validation, whereby the saving is the number of units purchased x the reduction per unit.

Saving 2:       Then if you reduce the number of units bought, you would claim a further saving around Demand Management.

The key to identifying savings is to agree the definitions around the various Supply side and Demand side savings types, and there are many of each kind.

Finally, one of my favourites is Marginal Cost.

Marginal Cost is the change in the overall cost that happens when the quantity purchased changes by 1.  In other words it is the cost of producing ‘just one more’

A definition I saw described it as: “marginal cost equals the change in total (or variable) cost that comes with each additional unit produced”

So, next time you are meeting a supplier who provides you with units of goods, try asking them what the cost of just one more is – all the fixed costs ought to be built into the original quote so any increase in units should be cheaper.  The level of reduction you will eventually get will depend on how well you are able to understand the supplier’s costs.

Good luck…! And if you want a full list of savings types, drop me a line.

The presentation will be on ‘Collaboration and Shared Procurement’, Where Michael Jennings of Avenue UK will discuss the pros and cons of procurement around working alone or joining with others on specific areas, versus co-ops or buying groups.

Michael Jennings of Avenue UK will be joined on stage by Ian Bucknell, the Executive Director Operations for Asthma UK, who will focus on the internal considerations in joining a group such as the Avenue Purchasing Group, talking about the concerns and risks, and dealing with internal stakeholders.

The Avenue Purchasing Group aims of bring together business and charities to harness their combined spending power to deliver corporate levels of service and cost savings across a wide range of expenditure areas.

Notes: The Charity Finance Directors’ Group (CFDG) is the charity that works with finance managers to ensure best practice in charity finance, driving up standards and ensuring every pound given to charity works harder. You can find more about the CFDG at http://www.cfdg.org.uk/

Having launched the Avenue Purchasing Group with the aim of bringing together business and charities to harness their combined spending power to deliver corporate levels of service and cost savings, it is fantastic to have the support of the Charity Finance Directors Group in raising awareness of Avenue UK and the Avenue Purchasing Group with its member charities.

Who are the Charity Finance Directors’ Group and what do they do?

The Charity Finance Directors’ Group (CFDG) is the charity that works with finance managers to ensure best practice in charity finance, driving up standards and ensuring every pound given to charity works harder.

Founded in 1987, CFDG’s training and development programmes enable finance managers to give the essential leadership on finance strategy and management that their charities need. With more than 1,700 members, managing over £21 billion, they are uniquely placed to challenge regulation which threatens the effective use of charity funds.  You can find more about the CFDG at http://www.cfdg.org.uk/

As part of the launch of the Avenue Purchasing Group we developed a leading deal on Landline telecoms.

Over the last week, for one lucky client, it meant a saving on calls of 65% and for others at 58%, 53%, 48%, 41%, and one at 35%.  So when I say on the website  “Save up to 60% on your calls……”, I am spot on the money; oh and the client with the 35% saving will be saving plenty of money, in fact £7,064 annually.

So back to the title of Tricks of the trade in Landline Telecoms.  When analysing these bills I have seen a variety of tricks that telecoms suppliers use to drive your bill up – so the great deal you thought you were getting isn’t all it was made out to be.

I thought I would share some of the tricks I have found so far with you:

Processing Fee

I saw this on a BT bill and they charged £9 to deliver the invoice (I know stamps are dear but….!!).

Calls charged per minute

If you pay (say) 5p a min for a call and are on the call for 1 min and 1 sec you end up paying 10p an effective rate of 9.84p per min. Depending on the profile of your call usage, you could end up paying nearly double.

Rounding up to the nearest penny

This is another way of charging you more.  If your agreement says you should pay 0.9p per min for a type of call and you make a call that is 70 seconds long, your call cost should be 1.05p, but with the rounding up it will be 2p.

Minimum call charge

Then there is the minimum charge, so although again you may have a rate of (say) 0.9p per min, there will be a minimum charge of 2p (or higher) for each call.  So in this instance if your average call is lower 2min 13 sec then you end up on a higher ‘real’ rate.

I am sure there are plenty of other tricks out there, so if you have come across any others that made you raise your eyebrows let me know.

What Avenue UK does with Telecoms

When we organised the Avenue UK deal, for the Avenue Purchasing Group, we made sure that our clients would get the best possible landline telecoms deal and NO tricks.  So:

• All calls are charged per second with no minimum fee
• Only the final invoice is rounded up to the nearest penny (not each call)

On the call rates, we believe we have one of best deals in the market.

• Calls to mobiles (O2, Vodafone, Orange, T mobile) all charged at 5p per min
• Calls to mobile on the 3 Network also charged at 5p per min (usually 15p – 25p per min)
• Local and national landline calls charged at 0.7p per min

On overseas calls the pricing is excellent and if you make overseas calls the savings are huge, for example:

• USA at 1.05p/min
• India landline 3.1p per min (saving a client 91%)
• India mobile 3.1p per min (saving a client 94%)
• China mobile 2.57p per min (saving a client 95%)

We think it is a market leading deal, that will save our clients valuable money – it already is for a number of them.

Let me know if you want any more info on this Avenue Purchasing Group deal.

I was asked this question yesterday, as in “are you a Cost Consultant”.  It is a question I get asked from time to time.

The answer is, ”No, I am not a Cost Consultant”

“So what are Cost Consultants and what are you?” is normally the next question.

Let me explain….

A Cost Consultant will typically pitch their service on the basis that if they can’t save you anything, they won’t charge you anything – and that if they generate a saving they will then ask you to share a percentage of that saving with them.

It all sounds good, but the problem (and this is my personal view) is that this charging method is wrong and is not in the best interests of the client.

If the Cost Consultant is motivated and remunerated by how much they save, the likelihood is that the focus will be on making things as cheap as possible (to maximise income), rather than on finding the right business aligned solution that the client really needs and buying that as cost effectively as possible.

Furthermore, most of the Cost Consultants I have met rarely have any purchasing or operational experience in the areas they are “consulting” on.  They are sales people from a variety of backgrounds “giving it a go” and so it’s no wonder they can’t align procurement strategy to the business plan.

The net result is that service or the product suffers as the supplier is forced to meet an unrealistic savings target so that the Cost Consultant earns a decent fee.

I am sure some companies will say it worked for them, but I really do think there are better alternatives.

At Avenue UK, none of our services work on a shared saving basis and they never will.

Our team are highly experienced professionals who provide strategic consultancy and procurement support to businesses with global operations, but we also have innovative ways to deliver purchasing solutions to almost any business or charity in any sector and of any size.

Everything we do is business aligned first and only then leveraged to extract maximum value.

We save money but only where it is the right thing to do.

And for us at Avenue UK, that is the difference.

I had a meeting with Sara, who amongst her many talents is known as (and trades as) the Spreadsheet Queen.  It is her assertion that  50% of Excel users use less than 20% of Excel’s capabilities.

If you’re using a spreadsheet, she can improve it, automate it or create a new one that delivers what you need, meaning you’ll spend less time on the number-crunching and more time on what’s really important.

And it is true.  Two good examples of formulas I use are  ”ROUNDUP” and “SUMIF”

ROUNDUP – does what it says on the tin.  When you use this in a calculation, it will provide the answer up to the number of places you specify (and you can use others to round down or up/down)

If you were dividing the contents of cell A1 by the contents of cell B1 and you wanted it to 2 decimal places the formula would be:

=roundup((a1/b1),2)

SUMIF – if you had a long list of sales people in column “A” and their sales in column “B” you can use sumif to find their total sales.  So if you wanted to find Gavin’s sales – sit in the cell you want to show the answer and the formula would be:

=SUMIF(A:A,”Gavin”,B:B)

So, my challenge to you this week is to find out what your favourite formula is….

I was talking to a potential new client this week and I thought the conversation would be good for a blog around the fear of change.

Having spoken to the client for a few minutes about the work that Avenue does and what it could mean for them in terms of increased efficiency and reduced costs, the client said, “I’m not sure if I want to know if we are getting a bad deal with our suppliers”

It was a surprising line, so I asked why.

In essence his answer was that, all the while he did not know if he was paying over the odds or could get a better service, he could convince himself that everything was in order and nothing had to be done.  However, if we were to establish that he could do better and was paying 15% , 20%, 25%+ more than he needed to, then he would have to act.

He went on to say that if the findings pointed to change, he wouldn’t relish the prospect of sitting them down and talking with them and he would feel sorry for some of them if he had to let them go (!) – even though they were massively overcharging him and seeing him as a way of making better profits and earning higher commission.

His last question, was “and what should I do if they say they can meet any revised service and price offer that was on the table”

I resisted the urge to say what my answer would be…….

I know a number of suppliers rely on this fear of confrontation and change to get away with enjoying massive profits from clients.

And of course, the last line of defence from many of these suppliers is that they can match any offer someone else has made.

Of course they can !!! they’ve been pocketing excessive profits for so long they can afford to!

So, anyway the Purchasing Support audit is going ahead and they are also looking to join the Avenue Purchasing Group.

On dealing with their existing suppliers, I have agreed to manage those meetings on his behalf or to attend meetings and support him – which has made him feel much more relaxed about the process.

Above all else, if your suppliers aren’t working in your best interests, don’t let them get away with it and don’t let the fear of change get in the way.

As Franklin D. Roosevelt said, albeit in different circumstances “So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself”