What is our role?

I'm often asked what our role is at TPG, and the simple answer is that it is to give you complete confidence.

 

We work with you and your team to firstly understand, and then tweak, your operational requirements so that stuff works for you operationally in the best way that it can for your business.  You and your team 100% drive the operational requirements of any project that we are engaged on.  This means we deliver precisely what your Ops colleagues need to function.

After forensically analysing your spend, together we choose suppliers to approach based on a combination of your requirements and our experience in the market.  This means that we end up giving you:

• simple fact based reports from which to make decisions so that we can go on and 
• deliver hassle-free implementation of our savings proposals. 

Throughout the process we provide you with guidance based on our years of business efficiency expertise, and we do all this at zero risk to you.

TPG provides you as the finance head with:

1. Reassurance, 
2. confidence, and 
3. peace of mind. 

This is all driven by our committed, warm, and friendly team, who, backed by technology, are constantly striving for perfection, whatever that looks like for each and every individual client. 

Simon Unger has been involved in his own entrepreneurial businesses since separating from the education system at the age of 16.  He has a broad range of experience in distribution businesses throughout the UK & Europe.  For the last 20 years Simon has used that experience to help TPG's clients make each and every year one to deliver savings and efficiency in their organisations.  

Simon can be contacted on 07768 421901 or by email at simonu@procurementgroup.co.uk

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The three of us need to talk; What Ofgem has not told you about British Gas’ fine.

Reading time: 4 mins

Outcome: cheaper, more accurate bills  

£4.5m. Could your business deal with that fine?

The Low Down

Last month British Gas Business agreed were penalised £4.5 million for failing to deliver smart meters to their large business customers. I could tell you the differences between meters and about the art meters have inspired. However, worrying about that kind of information is only necessary for my team at The Procurement Group and me. Although, we do not focus on art! Plus, I promised I would keep the reading time to 4 minutes.

What does the penalty mean for your business?

Now to the juicy parts. Ofgem did not tell you what we often forget about our providers. Instead, we think about the huge bills our suppliers just sent and how much they charged you last quarter.

It is easy to overlook that, like you and I, they have growth targets, profit goals and infrastructure plans to meet. Penalties hit those plans. Therefore, the fundamental question to ask is ‘why did British Gas not install the smart meters?’.

The answer; to get more money from their business customers. If you do not have a smart meter, you will receive estimated bills. Suppliers overestimate, and you lose out because your business has to pay the providers more than your usage. Without smart meters, you pay more on every bill, for every site.

How does this affect your business?

Think about how much the estimated bills increase your business costs every month. Now multiply that by 12, and consider how much money you are wasting on your providers every year. Ask yourself, what could your business do with that amount of money? You could employ efficient new colleagues, fit out new sites, present improved profits to the board. However, you cannot. The suppliers have that money because they have not installed smart meters.

Are you angry? Good. Keep on reading.

How can you protect your business?

Install smart meters and get exact bills! No more estimations and no more suppliers celebrating their profits, while your business loses out. Additionally, to get smart meters in every site, just ask your supplier. The responsibility to fit the meter is on them. It will not cost you a thing.

Hang on a minute. You have almost finished this article, and you still do not know who’s having the conversation?

Smart meters have a sim that talks with a data collector and the supplier; thus, providing precise bills based on usage. It is the meter, data collector, and the supplier that must communicate with each other. To receive precise bills, the three of them must talk to each other. Naturally, providers do not want your bills to be exact. Therefore, this conversation happening is a problem our customers regularly face. So make sure they are talking by checking that your bills are accurate, not estimated.

Let’s go back to that money your business is wasting because of estimated bills. Now, let’s install smart meters at every site and ensure the communication channels are active on each smart meter.

What did you say your business could do with the money wasted? Let’s do it.

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Simon Unger is the MD of The Procurement Group, specialising in saving your business money. If your business is spending too much, let us help you save.

Email Simon | 0800 019 3244

Follow Simon on Twitter | Connect with Simon on LinkedIn

Follow The Procurement Group on Twitter | Follow The Procurement Group on LinkedIn

How to Navigate Business Telecoms Like a Pro.

According to the OECD, Britain has one of the most expensive digital networks for businesses to use. We also have one of the most comprehensive, albeit with some black spots. So, what can you do about it?

1. Use a price comparison website.

Opera singers, pole dancing builders or meerkats… what a choice! These websites are great at comparing different deals from the main suppliers. But hang on… can you use these websites for your business? Well, no. No price comparison website we’ve seen does business telecoms. So, it’s a good job that we do! No opera, pole dancing or meerkats; just comparisons presented to you simply.

2. Check this map

Is your business operational in any of the weak signal areas? If so, it might be worth checking which suppliers offer the best service in that area. However, the maps might not tell the whole story and do you really want to find that your CEO lives in a black spot after the contract is signed? We have proven, tried and tested ways to ensure that you are 100% clear about coverage in key areas before signing your contract; it’s just another component of our Intelligent Cost Reduction plans.

3. Achieve Fair Market Value

You need to make sure that you are not sacrificing your business’ telecom’s customer service, voice/data quality and payment terms to get the cheapest deal. For business telecoms, alongside the price, we recommend listing the:

• billing cycle
• payment terms
• contract length
• call connection charges
• online billing access
• account management
• broadband upload/download speed
  

That way you can ensure your business achieves Fair Market Value. At The Procurement Group, our purpose is to help our customers achieve Fair Market Value. Our Intelligent Cost Control plans are not just about price; the plans are enshrined in a commitment not to  compromise service, product quality and payment terms.

That’s it! Simple, right? Now you can navigate business telecoms like a good ‘un. However, is that enough for your business? If you want to be a pro, why don’t you navigate your telecoms as a Procurement Group client? Call Simon Unger today on 0800 019 3244 to have your free 15-minute telecoms review. Or e-mail him now!

How To Maximise Your Buyer Power

The larger your business, the more leverage you have with suppliers. Instead of suppliers manipulating their pricing for maximum profits, you’re able to use your spend knowledge to leverage buyer power, bringing cost savings to your business, while still making it a valuable proposition for suppliers to favour working with you.

It all starts with categorisation.

Using categorisation of sales to leverage bulk price discounts

1) Item categorisation

It’s one thing to list an item but it’s quite the other to tag it to the right category. One way to categorise items being purchased is to use a hierarchy.

1.      Chief category

2.      Category

3.      Subcategory

Take for example replacement keyboards for computers. You could categorise that as office supplies. Using the hierarchy above though, that could be computing as the chief category, the main category, electronics, and the subcategory, replacement parts.

Costs could be cheaper by buying in from an electronics supplier offering bulk price discounts that aren’t on offer from a general supplier of office equipment.

The choice of categories gives your business more choice over suppliers rather than sticking to one general area. The reason being, suppliers in a specialised category will have a higher price per unit and therefore charge more for their expertise. It’s not to say you couldn’t get a better deal elsewhere on the same equipment.

Categorise what you buy so that you can accumulate the most units per supplier based on your category hierarchy to take advantage of bulk unit pricing.

2) Supplier categorisation

As the first step is about maximising the units you buy in at one single time to take advantage of bulk pricing, this part strengthens that to ensure that whatever you are buying, you’re only dealing with the minimum number of suppliers. That’s advantageous in itself, however what it’s also doing is putting buyer power in your favour because the more you order with one supplier, the better leverage you have to negotiate better pricing per unit.

3) Maximise category budgets

Whatever category’s your business spends on; you need to know them in order to maximise them. Ideally, what you want to do is lower the number of suppliers which reduces your administration costs, but more importantly it increases your spend per supplier. That again, puts buying power in your favour. The best scenario would be to find one supplier who can deal with your chief category, main category and sub-categories.

4) Leverage your buying power

The categorisation of items you buy will let you narrow your choice of suppliers but that’s useless if you don’t play it up. When you request a proposal for anything, stress that you’ve categorised expenditure and let suppliers know your overall budget at an organisational level and that you expect favourable pricing based on the volumes of transactions. This will also help you take out any supplier that isn’t large enough to cater to your needs.

5) Review and negotiate if you need to

When you categorise your expenditure and assign budgets to categories and then further add to that multiple sites, there’s often times extremely large volume. Sufficient enough to leverage discounts provided you work with a supplier who can meet your demands.

Some will be too small to manage your demand. Larger suppliers are often more expensive until bulk price discounts are applied because that’s the business contracts they are focused on attracting. When you match your contract requirements to the specialities of suppliers who target your type of business with volume discounts, there’s huge cost savings to be had.

The fastest way to access the savings is by categorising what you buy, lowering the number of suppliers you have and increasing your spend budget per supplier in order to make it attractive for suppliers to propose discount pricing. 

Is Your Business Ready For The Retail Water Market?

Businesses across England are set to benefit in reduced water savings, and enhanced services when the new retail water market emerges.

There’s no fixed date as of yet for when England introduces the retail sector for water. It’s expected to be sometime around April of 2017. When that happens, you could see your bill drop and quite possibly by a considerable amount.

There may be some business owners dreading the change though, thinking that it’s going to be just another utility, invoice and more suppliers, adding up to increased administration costs.

When there are admin costs, there’s savings to be had.

What’s more is that commercial water and sewerage can be combined into the one supplier. Given that business customers will be dealing with retailers, along with the new supplier comes customer service.

As things stand just now, you can’t exactly call up the water board and have an advisor come to your site to provide you with a water efficiency report. You need to bring aboard a consultant for that service. Given it’s a new market opening, new retail water suppliers will be competing for your custom so there’s no telling what’s going to be on offer.

In addition to the water services, it’s expected that other utilities such as telecoms, gas and electricity may be offered under the one contract. That will be of benefit to multi-site operations, as it will drastically reduce the administration involved. On that note, so too will be how you manage your utilities.

With other utilities, such as gas, electricity and telecoms, you can manage your bills online, including settling invoices. That doesn’t currently exist in the water market. The current water market has been described as an “analogue service in a digital age” something that will be changing when the retail water market emerges. The entire industry will change for the better, making it easier for commercial contracts to be managed, and savings made by choosing your supplier carefully and managing the contracts efficiently.

The most savings will be made (and fastest) by larger firms with multiple sites. The reason being, those are the companies water retailers will be targeting in early 2017 in a bid to win competitive contracts. Right at the time when the majority of business owners who haven’t researched prior to the water retail sector emerging won’t know much about the changes therefore, won’t know of the true potential savings.

For efficiency, it’d be wise to keep an eye on the Ofwat regulated companies so you know the companies that can supply you with the water services you need.

Companies will be required to obtain a licence from Ofwat. Those who do meet the licencing criteria will be listed on the website here.

There are two licences:

1.      Water supply and/or sewerage licences (WSSL)

2.      Water supply licences (WSL)

Some water retailers will only be licenced to sell you a water delivery service, with others being licenced for both service delivery and managing the sewerage.

What to expect when the water market opens

When the market opens (expected April 2017) retailers won’t only be providing water. There will be smart meters and advisors. Real people to help you with monitoring your water usage, increasing water efficiency, thus reducing your wastage and the subsequent charges wastewater incurs. In other words, they’ll be able to help your business become greener and operate smarter.

While it is a new market for England, it’s not unique to the UK.

Scotland opened the water market in 2008. One supplier in Scotland was able to assist a caravan park to reduce the water consumption by 20% by harvesting rainwater. With water retailers acting as advisory services, partnering with the right supplier could become a pivotal part of your environmental or sustainability policy.

Another example to come from Scotland is in the public sector where bundled deals were tailored to five schools, reducing the cost of wastewater by £56,000 per annum. That was done by increasing efficiency by 44%.

Of course, in order for suppliers to measure the results, smart meters will need used and the retailers providing the service will need to include benchmarking as part of their service provision to guarantee you that they are actually offering you a service and not just selling you water.

As with everything that involves commercial purchasing and contracting issues - research the market before committing.

For multiple sites, there will be cost-savings to be had, and those smaller sized firms who don’t expect to save much, it’s likely to be another service that will benefit from collective purchasing so every size of business throughout England will be able to benefit from the open water market when it emerges. In particular, those who bundle together water, energy and telecoms as part of an energy management strategy. With that in mind, if your energy contracts are due to renew, it may be worth holding out for a few months before committing to a long term fixed rate, which will affect the amount you can save.

Be ready to save. 

Managing Tail-End Spend Efficiently

The Pareto Principle applies to business expenditure as much as it does to many other aspects of a company. With a well-managed procurement process, strategic spending will account for 80% of a business’s total expenditure. The other 20% is where it becomes problematic because the purchases are:

·         Erratic

·         Of low value

·         Bought by people outside the procurement area without buying knowledge

What we mean by buying knowledge is that not all members of a workforce know about service level agreements, are concerned with contractual obligations, or know the specifics of buying on a commercial capacity.

That last part of staff is a critical aspect to address when you’re looking for a tail-end spend solution to bring your complete procurement process up to 100% managed level, rather than 80% managed well and 20% running amok.

4 Steps to Retake control of your expenditure

1)      Identify the low value purchases

This is one that’s pretty easy to do yet it remains undone in many a business. It can be done with just an Excel spreadsheet, but you’ll likely find whatever accounting solutions you have in place will also be capable of sorting your expenses by value.

Take a list of your expenses and arrange them from high to low. At the top will be your most used supplier. You’re likely to find that the Pareto Principle of 80/20 can be applied to your expenses. If you work with five suppliers, the bulk of your purchases will be with around four suppliers. Yet you’re likely to have many more suppliers invoicing - and often regular.

The reason being that at the bottom of your list will be numerous spontaneous purchases, occurring with multiple suppliers and be of such a low value amount that the accounts department has paid the invoices and never really investigated it.

When you delve into your smaller purchases, you can find that the total amount of them is substantial. Substantial enough for you to want to invest in making changes to minimise the leakage this problem’s causing.

Identify where the leak is by finding out the suppliers and categorising purchases.

2)      Get staff buy-in

Whatever solution you implement, staff must be on-board. Give them the information they need to know about how buying will work. Whatever they need to buy-in, have procedures in place for them to follow.

Hint: A list of preferred suppliers or one preferred supplier per category will greatly increase the volume spend and minimise incoming invoices.

3)      Implement categorical purchasing

With the buy-in of all your staff, it’s helpful to let them know about the buying process applied to procurement for strategic sourcing; the hierarchy of the chief category, main category, and the sub-category.

When staff can do this that have the authority to make buying decisions, they can then allocate a category to their purchase and divert more to the same supplier, reducing the amount of fragmented purchases. This happens much more than you think when you take into account the amount of people with buying power for low-value purchases across multiple departments requiring the same stock.

4)      Have credit agreements with preferred suppliers

Instead of being invoiced per order, have your preferred suppliers invoice periodically, such as monthly or fortnightly for high value accounts.

The reason you want to have a credit account is because you’ll have less invoices and it’ll make it plain-to-see to suppliers how much your regular spend is. This is helpful when you go into negotiations as it gives you buyer power, helping your business case for a discounted transactional unit cost.

In Conclusion

Strategic buying is difficult to roll out for every single purchase a business will make. There’s far too much involved. Things like stationery that doesn’t require office personnel to have to run through the accounts department for approval prior to purchase.  There are a lot of those purchases adding up and approval isn’t the solution. That’d slow the process down, making it detrimental to operations.

A successful buying program will have staff on-board with a policy and procedures in place so that everyone knows your policy on what can be spent and how they should go about buying what they need and will be in the best interest of the business.

Strategic buying can account for 80% of your total expenditure but if you leave it at that, you’re leaving money on the table. Combine category purchases to increase your buyer power and minimise the administrative burden that out-of-control tail-end spend brings.