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Cost optimization has become one of the top priorities for companies around the world. In fact, according to a recent study conducted by CFO Research of Industry Dive in partnership with Expense Reduction Analysts (ERA), 81 per cent of CFOs, CEOs, and other finance executives believe that maintaining a high degree of cost discipline over the next 24 months will be critical for growth.
“Now more than ever, it is critical for companies to know for certain, not just guess, that they are optimizing their costs to the maximum amount possible based on their industry, size, and geographic location”, said Charlie Smith, ERA’s CEO of North America.
“Technology and benchmarking data have far outpaced most CFOs ability to take advantage of opportunities that are hiding as expenses in their general ledger. Instead, they are left to flounder trying to cut headcount in order to hit their cash shortfalls. That is why using an established cost consultancy is crucial to realizing those cost savings as soon as possible.”
The smart solution
For almost 30 years, ERA has been helping businesses to optimize their spending and cut unnecessary costs, so that money can be utilized in more optimal avenues. Today, thanks to the creation of ERA’s SpendVue tool, these services have been supercharged.
“SpendVue is an intelligent business tool that is built on the data we’ve gathered from working in this industry for almost 30 years, and from having completed thousands of projects with our clients over that time,” explains Smith. “By working with a prospective client, we can use SpendVue to show them a personalized dashboard of all of their business expenses, and in real-time, show them exactly how much is being spent with each expense and how much potential savings is hidden there.”
SpendVue is an invaluable differentiator for ERA when recruiting new franchise prospects, but the cost optimizing tool will also soon be one of the most in-demand pieces of software available to CFOs and their organizations today.
The figures show exactly this: four out of five executives surveyed in CFO Research’s study say that they’d love to have a ‘do-over’, and regret not evaluating areas of cost reduction prior to the recent economic downturn. These same executives put cost analysis at the top of their business priorities for financial teams over the next 12 months.
Is Smith confident that these figures will prompt a spike in interest for ERA’s cost-optimizing opportunities over the next year? “It’s not a question,” he says. “The reason we know that is because when we went through the global recession of 2008, our volume increased double-digits, year-over-year. The reason is that when companies are making cash hand over fist, they know that they should be using cost consultancies, but so much is happening that they just don’t get around to doing it.
“When cash is tight, it becomes a big deal. While cost consultancy is normally a growth business to be in, it is especially front-burner right now, and we’ll remain in that exceptionally strong position for at least the next five years. Companies like us so much because we’re able to generate much-needed cash for them in areas that they never thought they could.”
The perfect ERA franchisee
It doesn’t take a business expert to appreciate the level of client retention and possible returns that a tool like SpendVue will bring to prospective franchisees. In fact, Smith believes that SpendVue will drive ERA’s average client retention period of five years much, much higher.
Couple this with ERA’s established no savings, no fee model, and you’ve got an investment opportunity that’s a no-brainer.
“This is the one franchise where you’re going to get paid exactly – to the penny – the value that you bring to a client. That’s really the benefit of this business,” says Smith. “When looking for new franchisees, we’re very attracted to individuals that have been executives in their career, because they see that for the first time in their career, they will actually get paid for the value that they bring to a company – that’s something that people strive for, but aren’t very used to. When you consider that an executive usually brings at least 10 times the value of his/her compensation to a company, that’s a very exciting concept indeed.” And while Smith had a swathe of cost optimization experience upon first joining ERA as a consultant, he doesn’t feel that this is necessary for entrepreneurs looking to join this expanding, global network of business specialists.
“The biggest asset that somebody can bring to our franchise opportunity is their communication skills. This is a high-value client acquisition proposition, so it requires somebody who is comfortable speaking with individuals within the c-suite. We’ll naturally train them and provide them with all the information and tools they’ll need to succeed and thrive – they just need the confidence to be able to present to clients effectively.”
A growing industry with uncapped potential
ERA isn’t just an award-winning, international franchise with over 700 consultants in more than 40 countries around the world. It’s the go-to provider of a fiercely in-demand service that is only going to become more popular as SpendVue rolls out globally, following its proven success in the U.S.
“SpendVue launched for the first time this year. Previously, a client would come in with maybe one or two projects to get the ball rolling. Now, because of this software and business intelligence we provide, clients start with seven. They often want to do more, but we provide a phased approach,” says Smith.
“Clients are no longer thinking whether or not they’re going to sign with us; they’re thinking about how many projects they’re going to do.”
At a glance Expense Reduction Analysts
Established: 1992
Number of units: 700+
Location: Worldwide
Investment range: $50,000 – $100,000 (single unit), $150,000 – $1,000,000 (area or master)
Minimum required capital: $50,000
Contact: joinus@expensereduction.com
