Without a distinct focus, in most organisations costs have a habit of increasing year-on-year. Whether it’s staffing, property, technology or 3rd party supplier costs you would think there is some rule that this has to be the normal state of affairs.
Beware of little expenses. A small leak will sink a great ship
– Benjamin Franklin
The reality is it doesn’t need to be that way – nor should it. Let’s take the case of 3rd party supplier costs. In addition to the services you want the supplier to provide, you would probably also want them to provide those services in the most efficient and effective way possible. As they gain knowledge of your business, the level of demand on them, and processes they should also be tasked with improving those processes, formalising the knowledge they’ve gained so they are less dependent on your teams.
In the face of supplier costs increasing more than 20% per year, we’ve negotiated significant cost reductions alongside service improvements. We’ve then migrated the same services to another supplier who delivered a better quality service, significantly improved customer satisfaction ratings and the resolution of long standing issues that the previous supplier had not addressed.