The Cost Cutters

Who doesn't want to save money? From the largest multi million pound company to the individual, budgeting is the new black and in these credit crunching times more and more businesses are turning to companies like www.expensereduction.com

In a businesseviaitaly exclusive, we talk to Andrea Fraccaro, Lombardy Area Developer and Consulting Partner of Expense Reduction Analysts in Italia about how companies can benefit from this service.

Andrea begins by explaining the provenance of the multinational Expense Reduction Analysts (ERA) network. "We have more than 800 consultants in over 35 countries and have been operating since 1992," he says. "Since that time, we have undertaken over 15000 cost cutting projects and are considered the market leaders. In Italy, we currently operate all over the country and are organized into five major areas. We have analysts in various sectors and can also call in our network partners from other countries and they can request our help too."

ERA can help any kind of business that has overheads, including professional services, manufacturers, non-profits, public and private education institutions, healthcare providers, and retailers. In Italy, the major clients are small to mediums sized enterprises with turnovers of between 10 and 150 million euros. "I would say these companies make up about 90% of our client base," says Andrea.

So how does it work? "Well, once a client contacts us, we undertake an analysis of their expenses. We find out how they spend their money, we look at the invoices, the bills, and the choice of service provider. We sit down and talk to the key members of their staff and gather our data. This phase can take between four and six weeks."

The next phase, which takes another three or four weeks,  is to go to the marketplace and get tailor-made quotations from established, quality service providers to see how much can be saved. The consultant also approaches the company's original provider to see if they can better their existing offer. "People think that the solution is to change providers," he says. "But that is not always the case. About 50 percent of the time, the company keeps the same provider but pays less for the service."

Andrea strongly emphasises the need to ensure that the alternative providers approached are of equal or superior quality to the original. "It is pointless cutting costs if you are also cutting the quality of service," he says.

The analyst then goes back to the client with the feedback and the list of providers. It is then up to the client to authorise the new system. "We do not insist," he says. "We are consultants. We analyse, we get better deals, then we present to the client and it is up to them to go ahead or not with the provider they want."

This all sounds very exciting for companies. But how much does it cost? "Well it really is a low-risk strategy for both sides," Andrea explains. "We undertake the analysis free of charge. If we don't see a way that we can reduce costs then we don't take things any further and there is no charge. If we do see that costs can be reduced, we undertake the second phase of work. We then agree to share the results on a success fee basis. The agreement lasts for 18 months and during that time we undertake regular reviews to make sure things are going smoothly. After that period the client gets 100% of any savings made."

What is the average amount that ERA can save companies? "It is between 19 and 20 percent," says Andrea. "Which is pretty good, if you think about it. We get paid from the savings the client makes and their company still saves money. It really is a win-win situation."

What is the most popular category for cutting costs? "It is probably telecommunications," says Andrea. "Although here in Italy we deal with a variety of categories from office equipment to cleaning and transportation."

The company has experienced steady growth despite the economic turmoil. It makes sense really as in the boom days of the 90s people were more interested in spending than saving. But now everyone understands the importance of reducing overheads.  And Andrea knows how much his service benefits Italian SMEs. "I'm pretty sure 99 percent of Italian SME's need something like this," he says. "And the value of our business is that if I can help you it will cost you nothing because I get my fee from your savings."

A win-win situation indeed!

Expense Reduction Analysts is a consultancy company, founded in 1992 and now present in more than 30 countries, with more than 800 partners.ERA deals with general cost reduction and its target is the SME. It has achieved around 15.000 projects due to a consolidated methodology and with the help of proprietary tools.Each year some 1,5 billion euro expenses are analyzed with a 20% saving.

Our success fee philosophy grants the customers a no risk agreement.

I'm Interested in cutting my costs, What's the Next Step?

Contact us today and one of our representatives will be in touch with you to help you with your needs.