INSIDE THIS ISSUE
There’s no doubt that independent schools need to take a
business-like approach to the way they manage their expenditure
and supplier base, in order to survive in the face of unprecedented
financial pressures and a rapidly changing educational landscape.
EXPERT NEWS - Brian Holmes
How can independent schools
tackle rising cost pressures?
owever the current economic downtown
has taken a toll on household budgets, and
with families keeping a closer eye on their
spending habits, many have questioned
increasing school fees, forcing many to go elsewhere
for their education.
So, how do independent school managers tackle cost
pressures in order to keep fees affordable? What can
a school do if increased running costs cannot easily be
passed on to its customers?
Addressing unchecked expenditure
Focus on jobs and headcount is not the only way to
achieve efficiencies, particularly in schools where
teachers are an important asset in delivering the end
product. The opportunity is for independent schools
to look more closely at non-labour expenditure,
particularly non-core costs that often go unchecked for
A close examination of these costs can have a dramatic
and positive impact on the bottom line. On a typical
profit margin of around 8%, a business would need
to generate sales of a quarter of a million pounds to
make the same bottom line impact as cost savings of
Principles of smarter spending
There are many misconceptions about what’s involved
in undertaking a review. One of them is that it is
simply about reducing expenditure when, in fact, it can
throw light on a range of other purchasing and supply
decisions – such as whether the products and services
you’re buying are actually the ones you need, and
whether the terms of contracts you may have signed up
to some time ago are still relevant to your school today.
Let’s look at some of the golden rules.
Focus on supplier costs not staff overheads
Schools need to understand their true operating costs
and the nature of their relationships with suppliers.
In the same way that prospective parents look for
better ‘deals’ on education, so those in charge of
school finances need to get better at monitoring the
marketplace and securing opportunities to make
savings or achieve better value.
Don’t purchase things you don’t need
Suppliers will often use tactics to sell you up to higher
margin items and/or bundle extra products and services
that are rarely, if at all, required. The key here is to
know what you need rather than what you want.
Create a cost-conscious workplace culture
Develop a culture where everybody is responsible for
challenging costs. Make staff aware that savings go
straight onto the bottom line.
Managing supplier relationships
The good news is that you don’t have to jettison existing
suppliers or undergo lengthy tendering processes to
appoint new ones. Significant savings are achievable
simply by overcoming the ‘contract fatigue’that sets in
when relationships have been in place for several years.
Suppliers will invariably respond favourably to requests
to refresh service level agreements or pricing structures
if they believe it will help them retain a valued client.
Similarly, negotiations can be assisted by a forensic
knowledge of the small print of an agreement, not
to mention the terms being offered elsewhere in the
As with all organisations in the current climate, the
market for independent education has rarely been more
challenging. However, by taking time to scrutinise
supplier bases and lock down savings on non-core
operating costs now, schools can put themselves in
the best possible position to prepare for whatever the
market may bring – this year and beyond.
There’s no doubt that independent schools need to
take a business-like approach to the way they manage
their expenditure and supplier base, in order to survive
in the face of unprecedented financial pressures and a
rapidly changing educational landscape. If they do, the
opportunity exists not only to survive the economic
downturn, but to grow through it and to reach a stronger
market position, ready to take advantage when the good
The UK independent
schools sector is a seriously
large business – educating
over 500,000 children at an
ever rising cost to parents.
How can independent schools tackle
rising cost pressures?
The UK independent schools sector is
a seriously large business – Andrew
Lees, shines a spotlight on purchasing
habits and how smarter spending can
assist them in keeping their school fees
The Full Package
Simon Phippen outlines the importance of
effectively assessing your organisation’s
packaging and delivery processes as a
critical part of the supply chain progression
Supplier consolidation empowers growth
With generous savings in excess of
£90,000, Clive Cowan and a team of
procurement specialists from ERA have
helped Matrix to streamline their business
and increase efficiency.
Bring your own device is here to stay
With companies looking at how they can implement a BYOD policy, including the
inherent security concerns - communications expert Brian Holmes highlights the
key questions surrounding BYOD.
The Full Package
any businesses that market products
on websites and in retail outlets simply
don’t have the right processes in place
when it comes to the packaging and
delivery of e-commerce products. And in such difficult
economic times, businesses can’t afford to get this part
of the customer experience wrong.
Let’s examine the key steps to success.
To ensure the packaging and delivery meet the
expectations of your business and your customers, it is
key that it is integrated at a strategic level. It is vital that
every department works in harmony in the evaluation
process, from operations and warehousing to sales,
marketing and your executive level staff.
Many elements need to be considered in the packaging
and delivery decision process, for instance:
Does your customer base expect recyclable materials,
such as cardboard and bio-degradable plastics, to be
used in your products? Does your packaging meet
current and impending waste and recycling legislation
in the UK and on the continent?
How are you managing the rise in cost of plastics, paper
and cardboard? Do you incur short-term increases to
costs to deliver innovation to the internal manufacturing
process with the aim of realising long term efficiencies?
Are you engaging with your supply chain to investigate
the potential for innovation and cost savings within the
How much is enough protection in the packaging
material, and at what cost? Are your methods of
distribution causing unnecessary damage to products?
What is the cost benefit analysis of potentially
expensive initiatives such as tamper-proof labels and/or
tape? Do security measures have a negative impact on
the aesthetics of the product? Does hi-visibility branded
packaging increase the risk of theft?
What value does branded packaging add to the
customer experience? How often do you survey your
customer base to measure attitudes towards packaging?
Can innovations in manufacturing deliver smaller,
thinner packages to reduce distribution costs? Is it
possible to work with your supply chain to test new
packaging to ensure products aren’t damaged?
Does your packaging design promote efficiency, using
elements such as quick assembly boxes and peel and
Is your returns process set up to favour internal
policies instead of the customer’s experience? Will
the customer experience be negatively impacted if you
allow the outgoing pack to be resealed and reused by
the customer for returns? How does your returns policy
compare to your key competitors?
One size doesn’t fit all
The points above aim to stimulate thought and provide
guidance, so that businesses can begin to establish the
foundations for success. If packaging is integrated
and tailored at a strategic level, businesses won’t just
appease all internal departments, they’ll keep the
customers happy as well.
However, the points above must be considered in line
with your business objectives and the perceived value
customers place your products and brands.
For example, most businesses have departments
that pull in different directions, and many operations
departments are under pressure from financial directors
to cut costs in the packaging and delivery process.
However, sales and marketing teams argue that if cost
cutting measures are made to packaging or distribution,
it could lead to a reduction in sales or a negative impact
the value of a brand.
Unfortunately, these types of internal struggles can
prevent businesses from carrying out the necessary
evaluation of the packaging and delivery processes.
And while some businesses simply try and retrofit
procedures taken from other companies, sadly what
works for one business may not work for another.
While the economic downturn certainly isn’t
making life any easier in the world of packaging and
distribution, I’m pleased to say that I am seeing more
and more businesses successfully integrating packaging
and distribution into overall business strategy. In
addition to that progressive move, I’ve also seen a
number of companies working more closely with their
supply chain, realising improvements to manufacturing
and distribution processes without compromising the
quality of the product, packaging and brand.
Each year millions of global businesses spend a fortune
on marketing to attract new customers and increase
product sales. But when the orders flood in, many of
those businesses won’t pay the same time and attention
to the packaging and distribution of the goods being
sent out to customers.
Scandal is not a new occurrence, with pesticide residues found in fresh produce,
and glass in branded coffee, and many other supply chain problems that did not
hit the press as they were stopped before they reached supermarket shelves.
EXPERT NEWS - Brian Holmes
Traceability and Food Safety
has moved to the top of the supply
chain agenda recently having hit
the front page of every media outlet
suppliers who can actually provide provenance and
trace a product back to source – from farm to end user?
In my experience, so many suppliers simply do not
adopt these critical measures, and as a result of this they
are not normally allowed to supply supermarkets and
often move into the food service sectors.
To combat and react to a scare, we must have proper
processes in place to be in a position to withdraw
product from sale immediately or to prove that our
product is safe. In order to achieve this, we firstly need
to know where our food came from – all the way back
to farm – and secondly where it went! Then, with an
effective product recall process in place or proof of safe
provenance, it is possible to make a positive statement
to the marketplace, if a potentially business damaging
Communication is key. It is critical to be on the front
foot with communication, by briefing the food agencies,
clients, consumers and other relevant factions in the
supply chain of your positive news or the resulting
immediate actions to resolve issues.
in the supply chain similar to what we witnessed in the
recent scandal. However, by having proper traceability,
it is far easier to minimise the damage caused. If the
purchaser raises the alert, implements a proper process
of due diligence and product recall, it is possible that
the consumer will actually receive the negative news in
a far more positive way.
Unfortunately, many food suppliers will not know the
provenance of the product or be able to implement a
product recall once they are made aware of a pending
issue, leaving the purchaser isolated. The key is to
ensure that the supplier can prove traceability at the
point of contract.
Today’s buyer has to ensure that the product recall and
subsequent substitution process is in place at the point
of supplier selection. There are so many great suppliers
out there delivering exciting, tasty and safe food.
Equally, there are many who do not.
Trust through provenance is crucial to avoiding
problems. Having the right processes in place and being
quick to communicate are vital attributes if they do.
ecent issues with meat are not isolated
but prevalent in so many areas of the
food chain today as so many wholesalers
still do not adopt an end-to-end supply
chain traceability process. In the recent episode, it
was actually a case of illegal supply deliberately
contaminating the chain.
The key to managing a food scare is to have a system of
end-to-end traceability in place throughout the supply
chain. Often with food safety and traceability it is your
ability to react, communicate and resolve potential
issues, threats or scandals which proves to be the best
way of ensuring damage limitation and due diligence.
Therefore do we not think it is critical to be linked with
- Richard Clayton
EXPERT NEWS - Simon Phippen
for Shale Gas?
n the US in the space of six years shale gas
has reduced America’s gas price to a third of
European prices, dramatically increased tax
revenues, created thousands of jobs, and made the
prospect of American energy self-sufficiency a reality
within the next 20 years.
Clearly, until full scale exploration begins, the UK
potential is unknown, but the British Geological Survey
recently upgraded their estimates of viable gas from the
Bowman shale in Lancashire.
Bizarrely, the Department for Energy and Climate
Change has consistently talked down the prospects for
the shale industry, and Cuadrilla, the only company to
have drilled in the UK, has been subjected to endless
interruptions and delays at the hands of environmental
Indeed it seems apparent that the Department for
Energy, the Climate Change Committee and indeed
the wider EU is very much in the grip of the green
lobby, whose focus is entirely on the decarbonisation
of the EU economy – seemingly at any cost. From this
perspective, the development of any further fossil fuel
resources goes contra to green lobby objectives.
If shale gas stays in the ground and imported gas prices
increase, then the case for renewables becomes more
attractive, as they become cheaper by comparison.
However, the fact remains that there are currently no
affordable renewable technologies available to replace
fossil fuels. Wind, solar and tidal technologies all need
fossil fuel back up for the substantial periods when the
wind, sun and tide are not available, and the fossil fuel
with the lowest carbon is gas.
There is a real and rapidly approaching energy crisis
in the UK, which is presently being met with paralysis
in Government decision-making and a stark conflict
of objectives between the green lobby and the energy
Shale could be the answer.
The bring-your-own-device (BYOD) trend is now an irresistible force that has actually
made an impact on the vast majority of companies in one way or another.
EXPERT NEWS - Brian Holmes
Bring your own
here to stay
The iPad Is Secure, Too
IT decision-makers should also see value in Apple’s
iPad. Another popular product for BYODers, the
device is capable of being monitored remotely, and
with some help from Apple’s software development
kit, companies can create their own programs for the
device. It’s a win-win.
It’s All About Productivity
When it comes time to evaluate the BYOD possibilities
for a company, it’s important to consider productivity.
And as much as companies have resisted it, they’ve
found that consumer-focused products, like the iPhone
and the Samsung Galaxy S4, actually make people
more productive than former business favourites, like
the BlackBerry. Why? It’s all about the software, the
advanced features and the touch screen. The devices
are intuitive. And intuitive devices make it much
simpler to complete tasks.
Remember the Apps
The number of corporate-friendly mobile applications
available to companies today is astounding. From
productivity apps to simple programs that handle
something like a to-do list, there are programs out there
for everyone. And companies can benefit greatly from
It Helps Constrained Budgets
Although a recovery is going on, companies are still
being negatively affected by constrained budgets. So,
IT decision-makers need to delay plans to buy new
products or software. By allowing employees to bring
their own devices into the office, the cost of buying
those handsets and computers drops. And in turn, more
of the budget can be used on security products and
It’s Happening, Anyway
Corporate managers who believe that employees aren’t
already using their personal devices for work are
kidding themselves. Employees are accessing corporate
emails from their personal devices, they’re logging into
cloud services from home, and they couldn’t care less
if the IT side knows about it. So, why fight it? It’s easier
to control the behaviour by allowing it and supporting it
than by turning a blind eye to it or banning it.
It’s All About Android Security
For many CIOs and IT decision-makers, the issue with
running an Android device is that the operating system
has been hit hard with security exploits. It appears that
those security woes will only increase in the coming
years. But it’s the same issue that companies have been
facing for many years with Windows. The malware
creators have turned their attention to mobile devices,
and Android has become the target of choice. Now
companies need to adapt.
Control Really Is Possible
It is possible to impose sensible management controls
in a BYOD-ready company. For instance, companies
can require that certain security software must be added
to devices brought into the space. With remote device
management, monitoring mobile usage is simple and
effective. BYOD does not mean that control has totally
The Competitors Are Already Doing It
As noted, the vast majority of companies around the
globe are adopting a BYOD strategy in some form
or another. So it doesn’t make much sense for those
teetering on the brink of plunging into the trend to hold
off any longer. BYOD is the future. And it’s about time
everyone acknowledged that.
Smartphones Are Delivering More Enterprise-
Smartphones as they were once known are no longer
the same. Vendors such as Apple, Samsung, LG and
Motorola are all realising that companies are more
willing to accept new handsets, and they’re bundling
more enterprise-friendly features into their products
because of it. And because of that, smartphones are
actually quite secure.
ost enterprises have recognised that
they have to find ways to manage the
movement because there is no way to
stop it. In some cases, BYOD policies
allow for employees to use whatever products they
want and use the applications they prefer. In other
implementations, the IT side strictly controls BYOD
with certain parameters about which products can and
cannot be brought into the office.
In either case, BYOD is here, and it’s here to stay.
It’s time for companies to look at how they can work
effectively with the movement. Although there are
inherent security concerns with BYOD and the chances
of actually having employees adhere to policies at all
times are slim, companies have no choice but to try. The
sooner the companies get in on the BYOD movement,
the better. There’s simply no time to waste fighting it,
and the BYOD movement can actually deliver benefits.
The iPhone Is Relatively Secure
Apple’s iPhone is one of the most popular devices
employees are bringing into the office. Although some
companies have been less than willing to support the
smartphone, IT decision-makers should realise that the
iPhone is relatively secure and runs many apps that can
be used effectively in business.
Supplier consolidation empowers growth:
Expense Reduction Analysts helps Matrix to streamline
their business model
atrix is unique in that the company
operates the most advanced, resilient,
state of the art Energy Management
Centre (EMC). The EMC not only
houses a team of expert engineers, available 24 hours
a day, 365 days a year, acting as first line support, its
systems also provide a central hub for all client data
including energy usage, alarm status, carbon reporting,
invoice validation and project tracking. Matrix can be
found in offices across the UK and at www.matrixsee.
Clive Cowan of Expense Reduction Analysts was
introduced to Simon Oldfield, the Finance Director
of Matrix, through personal contact in the Summer of
2010. The first project – a review of their insurance –
was conducted by Scott Ingham of ERAICM (ERA
Insurance Cost Management, Expense Reduction
Analysts’ specialist insurance unit). This successful
start led to a larger programme of work being agreed.
Matrix was growing quickly, gaining more and more
offices through acquisition. Clive Cowan and his team
were able to develop a template of suppliers, which
speeded the bedding-in of these new offices, as well as
delivering significant cost savings across the network.
Clive Cowan takes up the story: “The success of any
of our projects depends upon the specialist knowledge
of our experts. I was fortunate to be able to call upon
Malcolm Tait to analyse PPE, Stationery and Utilities,
Scott Ingham of ERAICM to review Insurance, and
Paul Giness of ERA Property to investigate Business
Each category may demand
a different strategy
“Each category of expenditure has its different ways of
operating and may well demand a different strategy. For
example, with PPE, Malcolm found a new supplier who
could support the whole Matrix network, and the scale
of this increased business with the company generated
good savings. On the other hand, with Stationery,
Matrix enjoyed a good relationship with the incumbent
supplier, they could handle the increased workload and
their retained business garnered 33% savings.
“Utilities were different again. Malcolm decided that
the best strategy for maximum savings was to retain
multiple suppliers across the business and generate the
best price for each location.
“Overall, what this supplier consolidation gives Matrix
is the ability to grow more easily and cost-effectively.
When a new office is opened, there are stationery, PPE,
utilities and insurance suppliers ready to move, and
business rates expertise ready to call upon.”
Simon Oldfield sums up the benefits of his company’s
partnership with Expense Reduction Analysts: “As a
business, we are growing fast. We’re a consultancy,
so we have no real overheads, but we do have many
indirect costs. Two of our biggest business challenges
are keeping control of those costs as we grow, whilst at
the same time empowering rather than inhibiting that
expansion. Clive and his team have helped hugely in
controlling costs, whilst also equipping us to grow the
business at the rate that we want.”
Matrix is the UK’s leading energy management
company with a proven track record of delivering
extremely impressive results.
Category Saving £ Saving %
Stationery £26,680 33%
PPE £14,916 34%
Utilities £6,632 33%
Insurance £27,308 17%
Business Rates (Leeds site)* £14,885
*Based on savings over the life of the project
Table of Savings
Simon Oldfield, Finance Director, Matrix
“Expense Reduction Analysts have not only saved
us a significant amount of money, but they have also
helped to streamline our supplier template, making it
far easier for us to roll out our business model across
each new office”
Expense Reduction Analysts Success Story
EXPERT NEWS - Jason Adderley
Expense Reduction Analysts Success Story
Laying down the law
for Withers’ worldwide
ounded in London in 1896, and now with
700 people in 12 offices worldwide, Withers
LLP is a law firm which acts for some of the
wealthiest individuals and families in the US,
Europe and Asia.
“When I first met Michael Priestley at Withers, I
was impressed with the great job he was doing in
procurement,” says Paul Pearse, Client Relationship
Manager at Expense Reduction Analysts. “Utilities,
stationery, cleaning, rates – he had them all pretty well
covered. But when we came to discuss Travel, we both
realised that there was the possibility that Expense
Reduction Analysts could add value.”
Michael Priestley takes up the story:
“At our stage of development – with a £140m turnover
and operating in three continents – we needed a
company to come in and assess how we should best
manage our travel requirements, and to walk us down
the path towards producing a travel policy and selecting
the right Travel Management Company.”
Paul Pearse called upon the specialist knowledge of his
colleague, Derek Hodd, to analyse Withers’ worldwide
travel requirements and recommend a way forward.
Derek Hodd outlines the project: “Withers’main Travel
Management Company (TMC) was really too small for
their evolving requirements. Individual travellers were
using various TMCs, or booking on the web, so there
was no ability within Withers to gain detailed control
over their travel spend. It was even difficult for me to
get the travel expenditure data together – particularly
around hotel bookings – because the whole process was
Online booking tool automatically
enforces the travel policy
“I therefore had to ask a lot of questions of a lot of
people in order to build up a picture of Withers’ travel
expenditure. Once this was done, and the results
analysed, I started to develop a travel policy and get
internal buy-in on its precepts.
“From a full Request for Proposals (RFP) process,
we produced a short-list of Travel Management
Companies, reduced it to two and Withers finally chose
one. I helped Withers staff through the implementation
process, the necessary systems and processes, including
an online booking tool, which automatically supports
the parameters defined in the travel policy.
“One important additional point is that the Travel
Management Company is contractually obliged to
provide detailed management information and hold
account review meetings, so that, for example, Withers
can over time examine buying patterns in all of their
What are the benefits for Withers LLP of the travel
project undertaken by Expense Reduction Analysts?
Derek Hodd explains: “Cost savings will naturally
come from this enhanced ability to manage, but that
was not the initial focus. At this stage, it was all about
bringingWithers’entire travel procurement activity into
line, making it accountable and therefore more cost-
effective, as well as ensuring that the company is acting
in a way that is compliant with current legislation when
their executives travel the world.”
Michael Priestley, Head of Business Services Europe
and Asia for Withers LLP, defines the benefits from his
point of view: “Expense Reduction Analysts spent a
long time getting under our skin, as a company, finding
out what we were about. And then they were very
tactful in pointing us in the right direction – a direction
that we would not have found by ourselves. In fact, the
range of Travel Management Companies they selected
for us to look at, was so good that we could have chosen
any one of three or four.
What does the future hold
for law firms in the UK?
What’s the biggest or most important
thing that law firms will be doing in five
years’ time that they’re not doing now?
Downward pressure on fees, new market entrants
and regulatory change will lead firms to be more
discriminating in the work they take on, and how that
work is handled. It will be far more common for firms
to adopt lean and continuous improvement processes
to accelerate workflow, reduce WIP and improve
profitability, particularly in areas of business that are
high volume / low margin. Some early adopters of these
methodologies, such as Clifford Chance and Midlands
firm Higgs & Sons, are already reaping the rewards.
What could law firms do to work more
effectively with their suppliers?
It’s important to adopt a strategic rather than a tactical
review of non-salary costs so that firms don’t fall into
the trap of treating products, services and software
as self-contained silos. A good example would be
photocopiers and digital print. Even in a reasonably
small firm, a digital print project might encompass
print, scanning for archive, rules-based printing
software, tracking software for assigning costs to
cases, lease finance, developing a robust service level
agreement for maintenance and so on. In our experience
in working with clients, suppliers are experts too and
are able contribute valuable ideas and enhancements
but are often never asked.
What could law firms learn from
businesses in other sectors?
The confidence to be able to quote either a fixed-fee or
incentivised fee for an agreed body of work.
The willingness to point out costs that need not be
incurred by a client – after all, losing a little revenue is
better than losing a client because they realise that they
have purchased services they don’t need.
What are the top things firms could do
to be more efficient/profitable?
Top line growth is often the priority for partners,
however this should be ‘healthy growth’ without a
disproportionate increase in non-salary and business
Turnover growth can be difficult to achieve in the
current climate in any event, and often our clients are
concerned with margin protection – which involves us
in a rigorous and forensic interrogation of costs and
Technology and outsourcing can help enormously,
but neither is a panacea unless planned, procured and
implemented with great care and expertise.
What are the benefits of implementing
a smarter spending culture within a law
By focussing on the non-core costs, the main benefit
is to be able to deliver significant savings without
disrupting the supplier base too much, if at all. We’ve
recently saved a client in excess of £150,000 annually,
without changing any of the six suppliers involved in
our review – and two of the suppliers are also clients
of the firm.
Conversely, another client has benefitted from an
annual £100,000 saving by wholly outsourcing a single
back office activity.
Jason Adderley of ERA, shares his views on the future of law firms and how
continuous improvement processes will improve profitability and efficiency.
“At our stage of development – with a £140m turnover and operating
in three continents – we needed a company to come in and assess
how we should best manage our travel requirements, and to walk us
down the path towards producing a travel policy and selecting the
right Travel Management Company. Expense Reduction Analysts has
performed superbly in fulfilling that requirement”
Michael Priestley, Head of Business Services Europe and Asia, Withers LLP
“For me personally, overseeing
the project from Withers’ point
of view, what struck me was
Expense Reduction Analysts’
patience, professionalism and
thorough knowledge of the
travel market. They talked to
a lot of people with a lot of
different ideas, and formulated
the very best travel policy for
us and sourced the best Travel
Management Company for our
mix of requirements.”
Michael Priestley, Head of Business
Services Europe and Asia for Withers LLP