Major High Street Retailer Discovers £1million Reasons to Implement Ostara
In the light of a profit squeeze due to increasing online competition, rising costs and the consumer slowdown a major high street retailer, with thousands of properties, was faced with having to save money without compromising the safety or smooth running of its stores.
They employed disparate systems to manage their maintenance throughout the UK and Europe – ranging from Excel spreadsheets to a reliance on data provided by the varied contractor base. Furthermore, there was no integration with accounting systems resulting in a disproportionate amount of time and resource spent trying to track what had taken place and what the cost associated to this should have been. They were also aware they could not easily demonstrate their level of compliance and had only a ‘gut feeling’ of the satisfaction levels regarding support the maintenance team gave to the stores.
By implementing the Ostara Computer-Aided Facilities Management solution they were able to bring together and gain visibility of all maintenance activities and the contractors employed. The major challenge of data collation and preparation was overcome by adding to and customising the rich data set which is pre-populated in Ostara and based on years’ of FM knowledge and experience. For the first time, by integrating their accounting system with the Ostara solution, they were able to track and manage the end-to-end activity and costs from a work order being raised to the invoice being processed. Although Ostara is not an accounting system it is one that has improved financial control and returns at the heart of its design.
The Client and Contractor Portals, which can be provided as part of the solution, enabled the Company’s employees to raise jobs directly and as such increase, the accuracy plus lead to a reduced helpdesk requirement. The helpdesk, although smaller, could carry out a more ‘value-added’ role by concentrating on contractor management rather than logging calls. In addition, the onus for accepting jobs (which the system has been designed to automatically allocate to the correct contractor) plus logging on and off jobs and uploading any required certificates was a function that the Contractors had to perform. The Portals also enabled valuable real-time feedback on the quality of work carried out which initiated the measurement of satisfaction plus unbiased and accurate contractor performance measurement.
All contractors were put through the PQQ (Pre Qualification Process) which led to a rationalisation via natural wastage where there were overlapping tasks being carried out by more than one contractor or where contractors were not able to demonstrate that they were fit to carry out the work they had been attending. Reasons for this ranged from inadequate training and insurance cover to an inability to meet the required response times without subcontracting and therefore increasing costs and risks to the business due to lack of control of the work being carried out.
The simple activity of invoice reconciliation and consolidation gave a 12% saving on reactive spend alone. The number of errors due to duplicate calls being logged and the wrong contractors being sent were dramatically reduced as all contractors plus the services and areas they were approved to serve was now embedded in the solution – this made a further 4% saving on reactive spend.
The clarity of what was required, where and when, meant that a collaborative working relationship between the Company and its supply chain began to emerge. An incentive programme with clear SLAs (Service Level Agreements) and KPIs (Key Performance Indicators) was put in place. The rebates required for repetitive failure to meet KPIs, targets for improvements and feedback on performance available actually led to £100,000 in rebates in the first year. This then considerably reduced and was coupled with a noticeable increase in service.
At the end of the first year, the system had paid for itself plus delivered a saving of £350,000. However, the forecast for the end of year two is a saving of £1 million based on analysis of the quality data at their fingertips as they are able to maintain the reduction of reactive spend; significantly impact that allocated to preventative planned maintenance; assist the contractor base to become more efficient and to reduce headcount.