Our experience has taught us that there are three key steps to ensure VfM strategies are embedded successfully and can demonstrate true value for your stakeholders.

1. Engage your community

Engaging stakeholders in any VfM initiative is vital, a service can never deliver value for money if it adds no value for the customer. Peter F. Drucker famously stated ‘There is nothing so useless as doing efficiently that which should not be done at all’. After all achieving customer satisfaction is extremely difficult if you don’t know what they need. Stakeholders within the organisation must also be able to contribute to the strategy and have a clear understanding of their responsibilities to deliver VfM.

2. Make Spend Visible

A common problem many organisations face is not knowing exactly what they spend. Once visible, costs can be challenged. But, first of all, you need to generate a complete understanding of your spend and a prioritised Cost Reduction Plan.

Once all spend is visible classify it to enable consolidation of spend across the organisation. The United Nations Standard Products and Services Code (UNSPSC®) offers a single global classification system that can be used for company-wide visibility of spend analysis & cost-effective procurement optimisation.

3. Ensure your VfM strategy is based upon a continuous improvement programme.

Your VfM Strategy should establish a rolling programme of reviews. Once your costs are visible and classified improvement opportunities can be identified and prioritised. CEOportal manages this for you and as you make improvements the system allows you to establish and monitor a cycle of improvement initiatives.

Value for money does not simply mean cutting costs as services will suffer. Instead a holistic approach is required that looks at optimising cost & efficiency. Eliminating waste and streamlining business processes used to deliver services will improve quality of the service whilst reducing and validating costs as a result.

Using a cost management system like CEOportal also ensures there is a full audit trail available on-demand for publishing costs & quantifiable results to your stakeholders.

For more information on how we can support your VfM Planning please contact us.

The Conference was designed to help local authorities and social housing landlords meet new regulations being introduced in April 2012, as well as the issues arising from the Localism Act and the Public Sector (Social Value) Bill, by making cost efficiencies as well as be more aware of the social return on their investments (SROI).

All of the materials from the February 2012 Conference can now be downloaded including our workshop presentations:

Introduction to Lean (Systems Thinking)

Continuous Improvement Planning – Applying the core principles of Cost & Efficiency Optimisation to identify, prioritise, and deliver VFM savings incorporating SROI.

It was therefore interesting to see a poll being conducted by the Process Excellence Network to determine which barrier to continuous improvement causes the greatest difficulty. These are the five key barriers we designed CEO Portal to overcome for our clients.

CEO Planner is the first stage in any continuous improvement programme, supporting the  identification and prioritisation of cost & efficiency optimisation initiatives. These initiatives can then be delivered using the Value or Process Optimiser modules to effectively engage with stakeholders, manage progress and ensure benefits are sustainable and locked in.

To learn more about continuous improvement using CEO Planner download our overview.

SROI is a framework for measuring the wider social value of procurement decisions, seeking to reduce inequality and environmental impact. It aims to improve wellbeing by incorporating social, environmental and economic costs and benefits into decision making.

EPI will be speaking at a Conference on Value for Money and Social Value alongside Chris White, Conservative M.P. for Warwick & Leamington, and promoter of the Public Services (Social Value) Bill, and Mick Warner, Assistant Director, Assurance & Financial Analysis at the TSA. The Conference is taking place in Birmingham on 9 February 2012 and will tackle the requirements of the new regulations being introduced in April 2012, as well as issues arising from the Localism Act and Social Value Bill.

EPI will also be delivering a hands-on workshop at the conference explaining how to apply the core principles of Lean Thinking. For more details see Assessing Social Impact and Value for Money Conference.

‘Inside Housing’ reports that the social housing regulator is monitoring a subsidiary of one of England’s largest housing associations after a major overspend on repairs and maintenance.

But why wasn’t an overspend of around £8million identified earlier?

A common problem many organisations face is not knowing exactly what they spend. Once visible, costs can be challenged. But, first of all, you need to generate a complete understanding of your spend and a prioritised Cost Reduction Plan.

EPI empowers clients with innovative web-based spend analysis tools and techniques. Registered Provider clients gain a complete view of spend to rapidly identify opportunities for value improvement as part of a structured VFM plan.

Read the full article on the Inside Housing website.

NHS hospitals in England spend around £4.6bn each year on a huge range of supplies and the study looked at how hospitals purchased 66,000 products, from nurses’ uniforms and bandages to paper clips. The conclusion is that the NHS as a whole spends almost half a billion pounds more of taxpayer money than it needs to. And that would make a big dent in the savings ministers say the NHS must make. Purchasing inefficiencies and small orders were the key culprits with price variations for the same items of between 10-50%!

The report also identified that in 61 trusts, 21 different types of A4 paper were purchased along with 652 different types of surgical and examination gloves.

The chair of the Commons’ Public Accounts Committee, Margaret Hodge MP, said “The range of similar products that trusts buy is sometimes so wide as to appear ridiculous: how can it be, for instance, that while one trust does its work with just 13 different types of surgical glove, another requires 177?”

Nigel Edwards, chief executive of the NHS Confederation, which represents the bulk of NHS Trusts in England, said it was a “challenging report which suggested there were some real opportunities to save money.”

With a coherent strategy to optimising costs and efficiencies, the scope for improvement in the NHS is clearly significant.

Read the full story on the BBC News website.

123-Reg reported that the GMTV website disappeared because they forgot to renew their subscription.  Technology site The Register reported that the GMTV website was briefly replaced yesterday by a page containing links to other websites. This was embarrassing but it could have been disastrous. Imagine the financial implications if this was a high volume eCommerce site!

But this is not unusual, in fact it seems that many high-profile brands lose control of their domain name and this results in a site going offline for a while. The damage can be repaired by either renewing again – if the domain is still available – or by setting up a redirect as GMTV has done. But GMTV is not alone, Emirates Airlines and Comcast have also been forgetful. It does seem incredible this keeps happening when it’s really easy to prevent. Most web hosting companies have tools to help you manage this.

Domain renewal has a small cost but a potentially huge value. The same is true for other contracts. Especially painful could be an energy contract that unexpectedly ends because there was no scheduled review. You then default to exorbitant out of contract rates and a very time consuming exercise to try to get back onto a sensible tariff.

Our advice is to always schedule pending contract reviews to make absolutely sure you do not miss any  renewals.  And our CEO Planner tool is the perfect way to avoid small surprises that could have a very big impact on your business.

The Telegraph quoted the experience of a small web development company called Fubra. They employ 25 people and identified the potential for to make a 97% saving on the annual £4.7 million hosting bill for the Businesslink.gov.uk website.

They tried to pitch this idea directly to HM Revenues and Customs but they were rebuffed because its tendering rules require companies to have prior experience of working for the public sector.

Whilst there are very good reasons to have a tendering process, Fubra and other SME’s think the government could do much more to embrace new ideas.

Read the full story on The Telegraph website.

We are specialists in business efficiency and we have developed an exclusive consultancy service called Intelligent Cost and Efficiency Optimisation (iCEO). At the heart of iCEO is an innovative and powerful software portal that eliminates waste, improves efficiency and drives down cost.

Based on years of experience and developed in collaboration with Warwick University,  iCEO has saved clients millions. The demand is huge, especially in current economic circumstances where there is such an acute focus on cost and efficiency improvements. But we can’t do it alone, and that is why we are looking for partners to deliver iCEO solutions to their clients.

If you have the right skills and domain expertise, this is a great opportunity to extend your offer to clients and build additional revenue.

You can download a prospectus to get the full story and if you want to take it further, please get in touch and we’ll arrange a more in-depth discussion.

G4S said the savings would not affects its profit margins as it would scale back non-essential work such as cleaning and painting and decorating. The company said walls that were once whitewashed and repainted every year will now only be touched up only every two-years.

G4S is one of the first company’s to outline how it plans to save the Government money after signing a memorandum of understanding following the comprehensive spending review.