The Typical Corporate Resistance?

Employees feel threatened if an outsider works on reducing costs for their department.  Most employees feel this reflects on their job performance.  If large savings are found it is feared that this corporate benefit will cause the upper management to loose respect and could hinder career advancement.

Management must help encourage profit improvement.  Almost all companies have reduced staff and have increased employee responsibilities.  Time to work on Cost Reductions has been reduced and in many cases is non existent.

The solution is obvious, outsourcing this function is best way to maximize savings.  However, resistance from the inside must be reduced.  This will only be achieved with the cooperation of the staff and with upper management encouraging cooperation.  Also, upper management must work with staff and make it clear that job performance will not be negatively impacted if savings is achieved. 

In fact, employees will benefit in many ways.  First, cooperation will help improve profitability.  Second, upper management should work with employees and those that cooperate and achieve the biggest savings should be given some sort of a benefit.  Third, any time a company improves profitability job stability is improved.  Forth, Corporate Culture should be advanced to work to save money and improve productivity.  This benefits all.

Examples of Cost Reductions?

Over the past ten years ATI has discovered many tricks that enable ATI's clients to reduce costs without effecting operations.

Working with a supplier of office equipment and supplies ATI was able to inventory equipment.  ATI first found that equipment was missing and maintenance contracts needed to be terminated since the equipment did not exist.  Second, all "Evergreen Clauses" (Automatic Renewals) had to be logged and tracked and when able, terminated.

All contracted discounts had to be entered into a database and actual charges compared to contract charges.  ATI found that in many cases discounts were either miscalculated or non existent.

The savings on this project was in the six figures.

Businesses that are entrenched in the old ways of doing business will not survive.

Negotiations with Vendors is an ongoing process.

All Vendor relationships now must be managed to achieve the lowest possible costs with the most cost effective services.  All existing Vendor agreements must be reviewed and analyzed on a regular basis. 

This process has saved ATI clients millions of dollars.

Benefits of a database for Cost Reduction:

In order to reduce costs efficiently information on each account must be entered into a database.

Tracking comments and information about each vendor over time is essential.

Understanding the vendor agreements and relationships must be tracked and monitored on a regular basis.  The database must be able to remind the business when to contact the vendor, when to spot check invoices and when to renegotiate the contract.

If negative information is accumulated and the Vendor/Supplier is not providing adequate service replacement information must be accumulated.

A check list must be developed from the staff and from the database in order to enable the new vendor to understand what is required.

Contact negotiations must be handled in an organized fashion working with at least 3 potential vendors.

Patience and persistence will prevail.

How to Select a Vendor:

Establish the specifications for the function that you want the Vendor/Supplier to fulfill.  Always work with at least 3 potential vendors.

Learn from the Vendors/Suppliers.  They will help you determine the specifications.

Make sure they have been in business at least 3 years and have enough client experiences to be able to service your needs.

Make sure all information supplied by the Vendor/Supplier is understandable.  The best way to be overcharged is for the Vendor/Supplier to present an agreement that is not easily understandable with terms and conditions written in fine print and/or on the back of the document.

Read all this information carefully and NEVER sign anything that you do not fully and completely understand.

Insist that all terms and conditions comply with what you want not what the Vendor/Supplier presents to you as the standard boiler-plate agreement.

Make the Agreement Terms Short?

Short term agreements that become month to month agreements upon expiration are essential.

Make sure all supplier agreements are either very short or have lowest price guarantees that if prices fall either the vendor will match the lowest price and/or will allow early termination without a penalty.

Cost Reduction Services?

In order to negotiate with your vendors it is essential that all information is organized in a database that has multi-user capabilities.  ATI has developed techniques, customized software, systems, and trained staff that will enable our clients to achieve the most cost savings at the lowest possible price.

OUR PROMISE TO YOU: "We have developed a contingent fee program that enables you to save money at absolutely no risk to you.  The systems and database tracking enable our clients to achieve the most cost effective Procurement Services possible.  We  inventory your equipment and  services and make recommendations that best support your Cost Containment goals.  ATI will be able to work with your existing vendors and develop  saving suggestions that will substantially reduce your procurement costs and your service provider costs.   We do not work for vendors we work for you." 

We hope you will look forward to the Communicator and would appreciate any feedback that you would like to provide. 

Please email comments to dc@auditbills.com

ATI Cost Containment and Management Services

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