Initial Project Assessment-Confidential Client
REACHis founded on the principles of client-first consulting. We are committed to excellence and to delivering proven cost-management strategies even in challenging financial markets. REACH understands that organizations have a choice in selecting a consultant for the review of cost-reduction.
REACHConsulting Group has more than 30 years of experience working with clients from a vendor perspective. The Executive Management Team has managed greater than $65 million of total client volume across varied business sectors. REACH is confident that our recommendations for process improvements, vendor management, and product rationalization will deliver the cost-reduction expertise that you require.
REACHConsulting Group specializes in cost-reduction analysis for both large and medium sized organizations. REACH's expertise in cost management, as a reflection of indirect expenditures, offers savings in these sectors:
Founded in 1997, Confidential Client is a multi-line insurance claims adjusting company with fully equipped service offices located throughout the United States. Confidential Client consists of highly qualified and experienced insurance personnel, dedicated to quality work and customer service. Their professionals understand the complexities of risk management, risk transfers, insurance coverage and effective claim adjustment/management. Recognizing that every client is different, it is Confidential Client’s philosophy that customers can be best served by creating programs and strategies that anticipate and exceed their individual needs. Their broad range of adjusting services enables them to provide a variety of claims solutions. We believe that the value of these solutions is measurable, making Confidential Client "the viable alternative" within the industry.
Today, Confidential Client continues to provide exceptional claims services from their regional offices throughout the United States. Their clients and services continue to expand annually creating a great demand for their services.
This assessment is designed to identify whether best-value service providers are currently in use for the procurement of services across specific areas of concern for Confidential Client. Additionally, this assessment will analyze and evaluate potential savings delivered through both open and closed RFP (Request For Proposal) methods. REACH Consulting Group, at the direction of Confidential Client, Executive Vice President of Operations, was commissioned to conduct this initial cost management assessment. In a meeting with the REACH Leadership team, Confidential Client specified two potential areas for review; those areas included both the review of Travel Expenditures and Business Products.
REACH has made our initial assessment based upon the expenditure figures detailed in the January 27, 2009 meeting. The expenditure figures that REACH has based its findings are the following:
Travel Expenditures- $ 1.6MM
Business Products- $ 300K
REACH is committed to working with Confidential Client to deliver substantial savings; additionally, REACH commits to managing your program on a monthly basis to ensure that suppliers maintain their commitments to both cost and quality. See Appendix A, for an example of the benefit of our propriety cost-management procurement model.
We wish to work with Confidential Client to fulfill your complete needs in cost management.
Cost Management Overview
Cost Management is not a new idea, neither is Supply Chain Management or Vendor Modeling- these terms are merely new terminologies focused on achieving sustained cost reduction.
The capture of indirect expenditures has become the renewed focus of numerous organizations, most importantly, in our nation’s corporate system. No longer are urban centers the only focus for economic decline, no longer can corporate offices consider themselves to be recession-proof because of product diversification. Increasingly, corporations face the pressures of severely restrained resources, limited staff and lack of effective procurement strategies. These pressures threaten the value of general management models accepted by many corporations and create a need for expert review. Many corporate leaders and policy experts recognize the severity of this issue and fortunately they are not alone. Executives like Tom Vander Ark, of the education arm of the Bill & Melinda Gates Foundation states, “We need to do much better with the money in the system and one must reach the conclusion that if we more effectively allocated and spent the money we have, we could do a better job.” Current market conditions provide savvy corporate leaders, an opportunity to lower costs, while creating a roadmap to yield future savings.
Confidential Client as well as other corporations across the United States is faced with new and recurring issues such as locating additional funding, operational costs and changing cost drivers. Today’s corporate leader must start the process of thinking outside the box, while boxing in the expenses of their organization for cost-containment. When compared to previous economic downtrends, today corporations have the ability to plan for growth more accurately as well as stave off the impact of recession with more effective measures.
The first step in re-capturing indirect expenditures is recognizing that indirect expenditures are expenses that occur outside of the core focus of corporations. REACH has identified 2 primary review categories, which using 2009 data accounts for significant portions of Confidential Client’s organizational spend. The 2 areas of review are the following:
REACH consulting Group has evaluated Confidential Client’s business products and travel expenditures using market comparisons, trend and vertical analyses as well as current and quick ratios. Other calculations include rates of return, represented through percent savings.
Travel Expenditures for FY09 are reported as $1.6MM.
REACH will evaluate potential savings opportunities and assist Confidential Client by negotiating and implementing a managed travel program. To clearly understand the saving possibilities, travel expenses
should be broken down into several sub categories and must be analyzed separately.
Sub Categories for travel are:
REACH will determine best-value options for travel by analyzing the savings opportunities of travel through both online and agent managed resources. While there are several options for travel, REACH will focus our efforts on resources that offer dedicated team agents, toll free numbers, policy development, hotel and rental car discounts, airline discounts, airline incentive programs, reporting, after hours, etc.
Some of the benefits of creating a managed travel program include:
By implementing managed spend categories and determining the accurate record of air transactions monthly or annually, the savings potential is estimated at 15%-20% overall savings. Based upon the figures provided,
REACH Consulting Group estimates a minimum annual savings potential to be approximately $240,000.
While there are questions that remain unanswered, such as travel policies and hotel rate limitations; REACH remains confident in the opportunities for savings in Travel Expenditures.
Business Products Assessments
Office Supplies and Equipment Expenditures for FY09 reported as $300K.
REACH Consulting Group will request two utilization reports from the current supplier, Office Depot.
Reports will be compiled and reviewed, following which REACH will look for opportunities to standardize and introduce additional procurement methods to deliver savings.
With the realization that Confidential Client is located in 25 cities across the United States, we understand the importance of company-wide service buy-in. REACH would propose to create a forum to gather feed-back from at least the top 10 cities to help us understand the needs and service requirements of your organization.
Based on the data collected through this survey, REACH will draft and distribute a formal RFP to qualified Business Products service providers.
Based upon the FY09 Business Products expenditures of $300K, REACH estimates the overall savings potential in Business Products for Confidential Client to be20%-25% overall savings.
Based upon the figures provided, REACH Consulting Group estimates a minimum annual savings potential to be approximately $60,000.
REACH Consulting Group’s Initial Project Assessment defines our potential opportunity to deliver value to Confidential Client. As we further understand the needs and opportunities of Confidential Client, we fully expect the savings numbers presented to increase and further impact your bottom-line.
REACH’s work for clients focuses on reviewing indirect expenditures and recommending ways to return dollars to the bottom line by applying business processes and management principles to the procurement process. The result for our clients is a streamlined, transparent, improved procurement process with costs that are in line with or an improvement upon industry norms.
REACH Consulting Group, LLC.
Two Ravinia, Suite 500
Atlanta, GA 30346