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 Special Report


How‘all in one’ business software raises profitmargins


Rick Stoor, MD of Templa, examines the financial case for integrated business software in the contract cleaning industry.


It’s no secret thatmargins in contract cleaning are under pressure as clients drive down the costs of outsourcing. Ac- cording to research, the average net profit margin amongst the top 1000 cleaning companies is less than 4%. So for a com- pany with a turnover of £1million that’s a £40,000 reward for 12months graft - a fig- ure that could easily be wiped out without tight financial control. The concern for the cleaning industry at


large is that hundreds if not thousands of companiesmay notmake any profit at all. But if the 4%averagemargin is right, it begs the question: ‘without compromising service, what can be done about the 96% that represents a cleaning contractor’s cost base?’.


Unconnected software systemsmake tight financial control impossible


Most contractors Imeet use a combination of off-the-shelf packages and spreadsheets to run their key business processes. In doing so they experience the frustration of managing several unconnected systems (and suppliers),most of which don’t cater for the idiosyncratic nature of the cleaning industry. Themost common ‘symptoms’ are:


• Force fitting your payroll into a standard package that doesn’t recognise the unique nature of cleaning company pay structures, for example staff who work atmore than


Rick Stoor,MD of Templa: “Most contractors Imeet use a combination of off-the-shelf packages and spreadsheets to run their key business processes. In doing so they experience the frustration of managing several unconnected systems (and suppliers),most of which don’t cater for the idiosyncratic nature of the cleaning industry.”


one site, are paid atmore than one rate, and cover for each other. • Not knowing whether your payroll will be over budget before you press the button to process it. •Manually scheduling and issuing works orders and often neglecting to invoice clients. •Mistakes in invoicing consumables when you havemultiple suppliers and charge dif- ferentmark-ups to different clients. • Constantly keying the results of site- based activity back into your head office systems, for example quality audits, new starters, and risk assessments. • Forever downloading data fromdifferent systems onto spreadsheets to perform fi- nancial or operational analysis, for example ‘payroll budget versus actual’ or ‘site prof- itability’. Many of the owners Imeet talk about


having poor visibility ofmargin or ‘driving through the fog without headlights’.


Howintegratedmanagement software can solve the problem


Integrated business software can’t clean buildings, but it does control the cost of doing so bymaking processesmore effi- cient. The way it works is that a single, cen- tral database stores all client data which business ‘modules’ then use to process daily tasks and transactions. The benefits are simple:


• It is designed specifically for contract cleaning and reflects cleaning pay struc- tures. • You no longer need enter the same client data tomultiple systems, saving time and reducing the potential for administrative errors. • You further reduce admin by computeris- ing time consuming tasks such as ordering and invoicing consumables. • Touch of a button reportingmeans you know the cost of your pay run before you process it. In fact all costs and revenues can be budgeted and analysed down to site level. • Fieldmanagers can view and amend pay- roll data online and in real time, saving their time and your payroll department’s time. • You can schedule known future events in advance such as annual contract increases or periodic work, reducing the risk of clients not being charged correctly or at all. • Fieldmanagers performsite-based tasks on theirmobile devices, with data transmit- ting automatically to and fromHQ. Fre- quent office visits are a thing of the past. • You can share key information with clients, fosteringmore trusting relation- ships. The result? Financial control is improved


whilst fieldmanagers havemore time to support front line staff and keep clients happy. It not onlymakes existing contracts more profitable but helps companies reap the benefits of turnover growth without a corresponding increase in admin resource - which equals improvedmargin. www.templacms.co.uk


Outsourcing can help retailers make savings


Cleanliness is a key driver in customer re- tention and an effective means of adding value in the retail sector according to a new white paper fromEmprise Services. The paper reports that retailers can use cleaning services strategically to enhance the customer experience and increase brand loyalty, whilst driving operational cost savings and efficiencies. The retail sector is still facing some


tough trading conditions with a squeeze on consumer spending set to intensify [1]. As in-store spending still dominates, with 83p in every £1 being spent offline [4], retailers can use cleaning as an effective means of gaining competitive advantage, particularly if they focus on making the shopping expe- rience offered in their stores superior to their competitors. Research shows that the appearance of


a store has a major impact on whether a consumer chooses to shop there, high- lighting the importance of the overall customer experience going beyond good customer service. Figures from one study [5] found that 99% of consumers said poor cleanliness would negatively affect their perception of a retail store with unclean restrooms and unpleasant odours rated higher than poor customer service.


30 l C&M l JANUARY 2014 l www.cleaninghub.net


Cleanliness is a key driver in customer retention and an effective means of adding value in the retail sector according to a new white paper fromEmprise Services. The paper reports that retailers can use cleaning services strategically to enhance the customer experience and increase brand loyalty, whilst driving operational cost savings and efficiencies.


The findings are part of a new white


paper published by Emprise, which offers insights into the importance of a clean en- vironment for retailers and how this can add to the bottom line. The paper provides a case study from one national retailer, which achieved significant cost savings across its national estate through out- sourcing its cleaning services. As a cus- tomer-facing brand with over 250 stores, the retailer recognised the importance of cleanliness and how this could impact on the whole customer experience. A highly efficient output specification


cleaningmodel was implemented for this retailer, enabling smarter working and, at the same time, driving cost savings. This meant that time could be spent where it was required, not just routinely working through a list of jobs. With so much importance being placed


on cleanliness by consumers and the effect it can have on a brand’s reputation, working in partnership with an outsourced supplier who can also bring additional expertise can deliver a number of advantages. For exam- ple, specialist cleaning suppliers know how to reduce costs and maintain a great serv- ice, whilst guaranteeing that the responsi- bility for cleaning lies with the provider - and an outsourced supplier can bring im-


proved methods and cleaning techniques, which can save resources and reduce en- ergy consumption. The business case for retailers to create


high standards of cleanliness is clear. With 99% of consumers saying that poor clean- liness would negatively affect their percep- tion of a retail store [5] and 66%[6] saying they have avoided a place of business based on its appearance, the benefits of having an effective cleaning strategy pro- vides a compelling argument for improv- ing customer retention as well as attracting new customers. Cleaning is clearly a big deal for con-


sumers who are constantly looking not just at what they spend their money on but where they spend it too. To download the full white paper please


visit: http://emprise.co.uk/retail


References


[1] Deloitte: Store of the future report. [4] ONS Retail Sales, September 2013. [5] Cintas Corporation: Survey carried out by Harris Interactive [6] Morepace Omnibus: Report - Con- sumers influenced by a retailer’s physical appearance.


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