Tuesday, May 21, 2013

Expense Reduction: Freight & Shipping Cost Management

Freight and shipping costs are expense reduction targets for most large companies and the “bull’s eye” for those involved in manufacturing, retail and distribution.

Freight cost management is a moving target that keeps operational managers asking:

  • Are we leveraging our buying power or fragmenting it across departments, business units and a variety of shipping, freight and other logistics providers?
  • Are we working with the right freight carriers under the right terms?
  • Are we being invoiced correctly and consistently for freight and shipping services?
  • Are we incurring rogue expenses outside our contracted carriers and rates?
  • How do our freight and shipping costs compare to other companies?

Meanwhile, shipping and receiving staff is dealing with day-to-day concerns like damaged freight, missed pick-ups and late deliveries.

Meeting Freight and Shipping Service Expectations at Lowest Cost

When it comes to freight and shipping expense reduction, LAC Group works with clients to make sure their service level expectations are being met at the lowest cost using a variety of mechanisms:

  • Basics – Identifying how and where to make adjustments by understanding what is taking the most time and where money is being spent on shipping and freight.
  • Contracts – Reviewing and analyzing shipping contracts to clarify complex language, flag potential problems and identify opportunities. Guiding clients through the contract process by negotiating directly with freight carriers and other logistics providers or making sure they receive the best terms and conditions.  
  • Benchmarks – Evaluating what our clients spend on freight and shipping in comparison to industry standards and other relevant benchmarks.

Reduce shipping and freight expenses saves our clients time and money, yet I think an equally important benefit they believe they gain is support. We make it our priority to care about their business. We give them peace of mind, knowing our people are educated and experienced in contract language and negotiations. We understand and apply freight and shipping benchmarks and standards that give our clients the assurance that their terms, conditions and service levels are at or above par.

Freight and shipping make up a considerable portion of the overhead expenses for many corporations; as such, they provide ample opportunity for expense reduction. And because of the dynamic nature of fuel costs and other transportation factors, even businesses that have been diligent about freight management can benefit from a fresh look, especially when coming from the objective and experienced eyes of the professionals at LAC Group.

Wednesday, May 15, 2013

Expense Reduction Series - Software Licensing
(And it's About More than Expense Reduction)

As more business software is available under a greater variety of licensing and delivery schemes, you would think that expense reduction for software licensing would be less of an issue.  After all, greater variety generally equates to savings, thanks to greater competition.

Unfortunately, that’s not the case. If anything, the demand for software licensing expense reduction is greater than ever, along with the need to implement Software Asset Management (SAM) plans and processes.

Software License Complexity

Software licensing has never been more complex or more open to misuse and misunderstanding. (We’ll get into software license compliance in a minute.)

The right to use a particular software application may be granted under an End User License Agreement (EULA), an enterprise-wide license agreement or some variation. The purchase may be transacted through vehicles ranging from complicated volume purchase agreements to monthly subscriptions for Software-as-a-Service (SaaS), also known as cloud computing applications and services.

Add further complexity, courtesy of the IT environment:
  • Business employees using some combination of desktop computers on a network, laptops, tablets and smartphones. 
  • Access to enterprise software, personal productivity software and mobile applications.
  • Don’t forget the access itself, with an alphabet soup of wired and wireless networks. 
  • Also don’t forget organizational size and structure, along with increasing mobility and work-from-home arrangements. 

Software License Costs 

All this complexity comes at a cost.

Every application, small or large, includes a software license that must be purchased and managed. Applications come from different vendors with different purchasing agreements and terms. And increasingly, employees using a credit card can acquire software applications directly, whether it’s a web application or a mobile app from the Apple or Google store.

While software-as-a-service is touted as an affordable software solution, all those dollars and cents add up quickly when thousands or hundreds or even tens of employees are buying them, sometimes in monthly subscriptions that linger on long after a need is met.

Software License Compliance

According to Gartner, 65% percentage of clients were involved in publisher-initiated software audits in 2011, a slight increase from 61% in 2010.

Gartner recommends the implementation of Software Asset Management (SAM) programs and other processes to mitigate the risk, financial and otherwise, of non-compliance. The risk involves not only the additional software license costs, but preparation time, potential legal action and lack of negotiating power.

More Complex Software Licensing = More Pressure for Expense Reduction + Greater Need for Software Asset Management

Clearly, expense reduction is not the only software licensing concern. With the potential for costly and damaging liabilities, more businesses are coming to us for advice and protection. We give them one-stop shopping and greater peace of mind by helping them remain in software licensing compliance, negotiate the best purchasing terms, manage various agreements and minimize the complexity.

Tuesday, May 7, 2013

Expense Reduction Series - Legal Research

Legal research is a key component of any law practice and a powerful tool in the hands of the best attorneys. Yet legal research is also laborious, time-consuming, and expensive.

Online services like Westlaw® and LexisNexis® have greatly streamlined and improved the legal research process, yet they can be very costly. And dealing with them isn't easy, as their pricing plans and policies lack the kind of transparency found in most online services today.

As a result, the cost of legal research can be one of the biggest operating expenses in large law firms, and it’s often second only to the cost of personnel in small firms.

What makes the expense of online legal research even more damaging to a law firm’s bottom line? It cannot be as billed back to clients like the old manual research time spent in a law library. According to a recent legal research cost survey reported on by the ABA Journal, more law firms are reporting that clients are either balking at or outright refusing to pay for legal research. 

Although legal searches now take a fraction of the time, they still require human intervention, and in the world of billable hours those fractions can quickly add up to big numbers. This becomes a perverse disincentive for performing effective legal research or subscribing to the best services, which can hurt the client and the firm alike. After all, good legal research can be crucial to attaining a more favorable ruling.

The expense reduction conundrum facing law firms today:

  • Legal research is a necessary expense that must be managed, yet legal research is a valuable resource that can uncover a ‘needle in the haystack’ precedent that makes a dramatic difference in the client outcomes, and of course, firm revenue.

The best law firms find a way to manage legal research expenses without hampering their legal research benefits and value. It’s the reason many have turned to LAC-Group. For a law firm, legal research expense reduction is a challenge of staying in business. For LAC Group, it IS our business.

Our Chase Cost Management (CCM) division works on behalf of legal and other business clients to find meaningful savings without compromising their service delivery or product quality. Our expertise in pricing methodology and thorough understanding of contractual terms of the major online vendors allows us to achieve significant cost savings for our clients.

That means even as law firms pay us, the savings more than make up for the money and time they would be spending otherwise. It's like the personal story I shared in an earlier expense reduction post about the savings I gain even after paying a consultant to help reduce my property tax burden.

And lawyers know better than anyone: Time is money.