SDS
Between the years 1997 and 2000, John Miller, the Business Founder was The Sales and Marketing Director of a company called (SDS) Special Delivery Services, now called SMS (Special Mail Services). The company had a turnover of approx. £11m and produced profits of £1.1m.
SDS dealt with every financial institution in the UK and with some of the new American entrants into the UK arena. SDS provides a discreet delivery service of credit/debit cards on behalf of all of the financial institutions. SDS delivers to postcodes which the banks consider are at high risk of fraud. John and the MD managed all the relationships with clients.
One of SDS’s clients (they will remain anonymous due to confidentiality agreements), during contractual negotiations, offered to provide their cost reduction service to SDS, (the concept of which they were trialling at the time). The financial institution at that time (1999) had £3.4 billion of annual purchasing power in areas of indirect spend. Every service was provided by pan European or worldwide suppliers, thus ensuring service level agreements were very high. The cost reduction programme was instigated and substantial savings were achieved within 3 months, all of which fell onto the bottom line.
Although successful, the financial institution did not progress its cost reduction trial to become a full blown service as the board of the institution did not consider it to be a core activity.
John was so impressed with the results; with the results that he launched his own cost reduction service and clients have benefited tremendously ever since.
August 2005
By now, this financial institution’s annual direct spend had increased to £4.9 billion!
First year
After a lengthy period negotiating agreements with suppliers and the financial institution, Atlantic Business Resources PLC (John Miller and Adrian Drewe, the Chairman), began to promote its own services in August 2005, to a few companies we had worked for personally or with over the years. The financial institution does not own any equity of Atlantic Business Resources PLC, however it has first option to purchase our company. To date the company has been funded by the owners.
The trials were very low key and in their infancy. The key factor here was proving the quality of our services to both clients and indeed to us. Many clients were not even asked to pay for the services as Atlantic Business Resources were trialling the concept. We felt this was the best way to test our services.
Corporate Purchasing Card Payment
Within the first 6 months we had converted a large number of clients and had instigated 6 services to them in total (stationery, gas, electricity, fixed line telephony, mobiles, and insurance). The initial problems we encountered were few, however, the first being one of payment, as initially all of our clients paid for Atlantic’s services with the use of a corporate purchasing card (supplied by our financial institution). Although we achieved substantial savings for our clients, the day to day minutia of paying with a corporate card for services such as stationery was simply not practical. Suppliers were happy as they were paid within 5 days.
One supplier for each service
In the early days (first year) we also suffered as we only had one supplier for each service. We quickly realised that if we were to compete AND remain impartial we had to expand our list of suppliers. Our Chairman also wanted us to ensure we were not beholden to the financial institution. Fortunately we were approached by a number of suppliers who had lost their clients business to Atlantic’s cost management ‘Business Support Programme’. They expressed their desire to be part of our offerings once they understood our business model. In addition, we changed our business model to include negotiating with the incumbent supplier too.
Rates consistent with £5 billion annual purchasing power
We then spent the next 9 months re-negotiating with our existing suppliers and with our new suppliers (all were large multi-nationals or worldwide suppliers), to ensure we have the availability of at least 4 suppliers for each service we offer the client. This was vital with regard to our wish to remain impartial. What we found interesting, was that each new suppliers rates were either 1 or 2 % more competitive or 1 or 2 % less competitive than our existing rates for each service. We now have a broad range of 25 services with numerous suppliers; all with rates pre-agreed and consistent with £5 billion + of annual spend.
To Date September 2007
We now have an enviable track record of providing sustainable cost reduction strategies for clients across all industry sectors. We have developed our services from a mere 6 to the 25 + our clients now enjoy. Our largest client is a £1.1 billion annual turnover organisation with 285 locations. Our ‘median company’ has a turnover of £55m.
We will not stand still. We are committed to continually research, develop and provide new services to clients. We will continue to monitor quality, service levels and sustainability as we move forward.
We are confident of our success (and in line with our Environmental Policy, particularly with regard to Climate Change), we are embarking upon the Franchise Plan as conceived in the original Business Plan in 2004. Atlantic is exhibiting at The NEC National Franchise Exhibition October 5th and 6th, this year with a view to recruiting local experienced business people. This will enable local consultants to deliver Atlantic’s cost reduction Business Support Programme to local companies.
The financial institution does not own any equity of Atlantic Business Resources PLC, however it has first option to purchase our company. To date the company has been funded by the owners.
We intend to ensure we continue to capitalise upon our consolidated purchasing techniques for the benefit of our clients and for the company as a whole.