Initial Presentation 2010
1 like291 views
The document discusses how Expense Reduction Analysts (ERA) can help XXX Corporation find extra profit by reducing non-core expenses through their proven process. ERA analyzes a company's expenses, identifies potential savings opportunities, implements recommendations, and monitors for 24 months to ensure savings. Their average cost savings across all expense categories for clients is 19.7% with no fee unless savings are achieved. The document outlines ERA's approach and encourages XXX Corporation to work with them to lower costs and increase profits.
Initial Presentation 2010
- 1. Finding Extra Profit for XXX Corporation Richard Ungaro 407-276-5312 rungaro@expensereduction.com
- 2. Agenda 1. Why focus on overhead? 2. Who is Expense Reduction Analysts (ERA)? 3. How can we help you? 4. Some key clients 5. How does the ERA process work? 6. Our typical cost categories 7. Where do we go from here?
- 3. Why Focus on Overhead? • Current economic conditions are presenting challenges for all companies in all industries • Expense reduction is easier than increasing sales • Saving One-Dollar of expense has the same impact of raising revenue by $15 to $20 in most companies • Expense reduction improves your ability to compete • Expense reduction can be an alternative to headcount reductions
- 4. Who is ERA? • Established in 1992 • Over 14,000 projects completed world-wide in more than 30 countries • Average cost savings across all expense categories is 19.7%. • Focus on non-core operating expenses; savings goes directly to the bottom-line • No savings – absolutely no fee • Work on a no-risk, contingent fee basis; fee is derived from the measured savings that the client receives Demonstrated Experience and Results
- 5. How Can We Help You? • What are your top initiatives this year? • What seem to be the obstacles to achieving them? • What metrics measure success or failure? • How will achieving them impact your business? • What do you need to achieve them? • How might savings from your non-core cost categories help you achieve your initiatives?
- 6. Some Key Clients Broad Industry Experience
- 7. How We Do It Alternative Approaches to Higher Profits 20% Cost Increase Current Reduction Sales Column1 Revenue $ 100 $ 100 $ 140 Direct operating costs $ 35 $ 35 $ 49 Labor costs $ 35 $ 35 $ 49 Non-core indirect costs $ 20 $ 16 $ 28 Net profit $ 10 $ 14 $ 14 20% cost reduction or 40% increase in sales revenue both yield a 40% increase in Net Profit
- 8. How We Do It Analyze Define Options Implement 6-8 weeks 6-8 weeks & Monitor per category 24 months per category per category Process: Complete analysis of Select and manage suppliers Implement solutions, business and requirements with recommendations measure and monitor ongoing Activities: • Define scope • Identify Potential • Negotiate Supply Agreement • Obtain data Suppliers • Implement recommendation • Understand data • Benchmark to database • Monitor supplier compliance for • Know requirements • Test the Market (RFP) 24-months • Benchmark to database • Analyze the data Deliverables: • Baseline Report • Recommendation • Implement & Compliance Report review
- 9. Working Together No savings = No fee Expense Reduction Analysts Our Clients • Operate with integrity and respect for our client’s • Provide timely access to information. personnel and supplier relationships • Allow ERA to present a successful • Analyze the client’s current costs and service recommendation and earn a share of the savings environment during the subsequent Review Period. • Identify and help implement hard-dollar savings • Have the sole right to select which of the options for our clients utilizing our: successful recommendations is the best fit. • proprietary process • Implement within 30 days, if ERA delivers a • expert resources successful Recommendation Report. • benchmark pricing data • Do not solicit any offers from suppliers or duplicate ERA’s work, and refer all unsolicited • Provide post-implementation support services inquiries or offers from suppliers to ERA throughout the review period A successful recommendation is: 1. A lower cost solution from an incumbent supplier(s); and/or 2. A lower cost solution with savings above an agreed to minimum, from a non-incumbent supplier who provides equal or greater products/service/quality; and/or 3. A solution from a non-incumbent supplier that our client elects to implement even though it does not meet the criteria above; and/or 4. Provides savings realized from approved changes in methodologies or process
- 10. Expense Categories Logistics Supplies • Small Package Freight • Chemical • Domestic Freight • Cleaning • International Freight • Food Services Insurance • Lab and Medical • General/Worker’s Comp • MRO/Factory • Health Consumables • Packaging and Shipping Services • Printing • Equipment Maintenance • Stationery and Office • Janitorial Services • Payroll Processing Telecommunications • Printing • Data • Records Management • Mobile • Temporary Labor • Uniforms • Voice • Waste Management Merchant Card Fees Leasing
- 11. Our Process Yields Predictable Results • Savings can be achieved in 90% of projects • Worldwide, we have completed over 14,000 expense reduction projects in 30 countries • Our average savings have been 20% for our clients • We will continue to audit those category expenses for the next 24 months to verify those savings
- 12. Best Practices (Summary) • Gather and analyze the data • Know the category/industry and market pricing • Reduce supplier risk • Go to market, then analyze results • Negotiate well • Implement quickly • Monitor afterwards
- 13. What to Expect IF You Outsource • What you should expect • Deep category expertise and experience • Detailed analysis with clear baseline pricing • Access to aggregated (benchmark) pricing data • Transparent earnings - disclose any commissions/incentives • Implementation support • On-going auditing of results • Compensation based on delivered success • The result should be: • Much faster completion (by capturing lost savings) • Much more savings (from using experts & benchmark pricing)
- 14. Effective Expense Reduction Requires: 1. Detailed spend analysis 2. Benchmark pricing information 3. Category expertise 4. Time and resources 5. Auditing of the results THANK YOU