A sure way to EBITDA betterment

At Procserve we unashamedly pursue the betterment of EBITDA for our customers through procurement savings in both cost and efficiency that comes from implementing our eMarketplace, the Procserve Commerce Network.

The audience for this message are the CPOs of organisations large and small who, for the first half of 2014 at least, have in the main been too busy to hear it!

As Chief Commercial Officer for a software company I fully understand the pressures of the day job, but if someone told me they could improve my company’s EBITDA by 10% and only ask me to invest the equivalent of 10% of those savings in order to get it, I would proverbially bite their hand off and have no choice but to listen to their proposition.

On average every pound saved is the same as £16 of revenue generation†, so we think it’s worth putting in a little effort to make those savings! Procserve understand that this effort needs to come from both you and us; that’s why we commissioned BDO LLP†† to validate the savings we make for our customers. Furthermore, we offer our clients one of our top Procurement Consultants for half a day to further validate those savings within your organisation and map them directly to the improvement of your EBITDA. We do this for free and with no obligation.

So if you can spare 1 hour of your time, be willing to share some basic data markers about your spend and existing procurement processes, we will show you just how well we invest that hour and how you could improve your EBITDA by 10%.

†IBM Procurement: Optimizing savings and mitigating risk in a complex world
††BDO International is the fifth-largest accountancy firm in the world

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Feeding the Bottom Line in Food and Drink Manufacturing Through More Efficient eProcurement

Over the last couple of years, one industry has received more negative press than others: the food and drink manufacturing industry. A recent study1 suggests that just 7 in 10 people have confidence in food safety now compared with 9 in 10 before the horsemeat scandal.

As manufacturers begin to tighten up quality control processes and increase their spending on achieving compliance with various legislation madates, margins have never been tighter. A study by BDO2 noted that margins within the industry are being placed under greater pressure each week with 83% of food manufacturers experiencing similar or worsened operating margins in comparison to 2012.

So what can food and drink manufacturers do? What actions can they take? The only way to compete is to be cheaper or be different, right? And this requires investment.

 

1 Which?, Future of Food Report, 2013
2 BDO, Food and Drink Report, 2014

Public Sector Frameworks; Closed or Open?

It’s common knowledge both within the Public and Private sector that within the government exists a department with the sole purpose of negotiating and contracting framework agreements to meet the needs of the various types of public sector organisation.

However what may not be known is that these agreements are often let for a very small subset of government organisations and given the common spending requirements of the public sector this often leads to more than one framework for the type of goods or service. This is not only a doubling of work for the government, but also for the supplier and therefore a waste of both public and private sector funds.

Now this may be an over simplified view, however why does the government not go back to each existing framework and request the suppliers allow the agreement to permit all of the wider public sector to buy from it?  This will not only drive more business for the supplier and given the pricing is often fixed, the supplier will not lose out financially.  Initially this will only simplify the use of approximately 116 existing frameworks, but this in itself would be a tremendous step forward.

A step further would be for the government to ask the supplier to allow the frameworks to be used by Private Sector organisations as well! This requires a significant change in culture, particularly within GPS, however the benefits are clear; private sector organisations get an opportunity to buy more efficiently, which in these times of osterity is sorely needed, suppliers get an opportunity to sell more and most importantly from the governments point of view, GPS get to negotiate better pricing based on higher volume going through the framework, thus benefitting the taxpayer too.  Now for legal reasons I am sure this could only happen when new frameworks are let, but this does seem like a quick win for all concerned!?