Business & Finance - Cost Reduction
Business & Finance, 2 September 2009
The premise could not really be simpler. ERA Ireland Ltd, trading as Expense Reduction Ireland (ERI), has the knowledge and the contacts to save your company money. And you only pay out of the savings engendered. Which seems like a win-win for everybody.
ERI’s approach is based on a meticulous approach to analysing a company’s spend. It looks at every area of costs, excluding wages and salaries, analysing the last 12 months of outgoings. It is only through this level of attention that a true picture of what a company is paying – and, importantly, what it should be paying – can come out.
“There are two basic principles to savings,” said Seán Griffin. “Firstly, we look at how much a company is spending to buy what they need – analysing all items that make up the spend. We are then in a position to get the correct price for the company’s spending power. But secondly, by knowing the supply chain, when a client tells us who the supplier is, we will have a good idea of the potential savings. We bring a lot of detailed buying information to the table.”
This knowledge is drawn from the personnel of ERI, as well as the way the company operates. It knows the manufacturers and the prices that they charge to trade. It knows the mark ups that trade passes on to the clients. And it can use this knowledge to leverage the best deals for its clients.
“We don’t want to affect the relationship between the supply chain and our clients,” explained Griffin. “In fact, between 70% and 80% of the time, the supplier stays the same. And we know that everybody is entitled to make money. But sometimes the information on pricing that we have is better than what is being passed on to the client at the time.”