The Czech company El Nino distributes branded perfumes and cosmetic products to the retail and wholesale sectors. One of the market leaders in the Czech Republic, El Nino has also entered foreign markets and sells in over 10 countries. The company has achieved an annual turnover of 1.6 billion CZK, and its revenue grows by 25% to 30% every year. El Nino has been operational for over 10 years and has been awarded five times the Czech “Shop of the Year” prize.
Here Josef Klimenta, CFO of El Nino, shares his experience:
Management at El Nino took the decision to investigate expenses in the cost categories of transport of small deliveries, packages, travel as well as card acquiring, freight, waste and e-commerce. You chose an external company to carry out the project. Why did you choose Expense Reduction Analysts?
El Nino and Expense Reduction Analysts have something in common: they are both professionals in their field. We felt that we should entrust professionals for the cost issues. We have consistently paid a lot of attention to cost management and avoided wasting money. We believe that the ideal time to look for potential savings is during a period of growth, as it is when the company’s position on the market is strongest. Our attention was drawn to Expense Reduction Analysts’ concept of finding savings beyond our scope, i.e. in categories where our procurement policy gave us satisfaction. We were also happy with their expert specialism, as each cost category is managed by an expert with years of experience. Expense Reduction Analysts’ network of around 650 experts is a guarantee of quality for us.
Were there other aspects in the way Expense Reduction Analysts works that you found interesting?
Absolutely – the riskless fee system, where the remuneration is based on the savings achieved by Expense Reduction Analysts. The concept is as fair as possible. Additionally, Expense Reduction Analysts takes full responsibility for the chosen solution all throughout the monitoring period, communicates constantly with suppliers and oversees not just the achievement of savings but also any opportunity that may appear on the market. I would also like to highlight that the solutions implemented by Expense Reduction Analysts that eventually achieve cost savings are always designed to maintain the standard of quality we are accustomed to. The way Expense Reduction works with and evaluates qualitative parameters is something unique.
Could you share your views on the way each of the projects for El Nino was managed?
All projects were managed well and in a similar way. We only had to devote a minimum amount of time; if we had decided to investigate any cost categories by ourselves, we would have had to invest much more time and would have been at risk to achieve far less. This is because Expense Reduction consultants have expert knowledge of specific cost categories and are able to achieve savings that are substantially higher.
The Expense Reduction Team was international. The Client Manager was local, and in charge of the overall management; the team of analysts comprised experts from Czech Republic, Slovakia, Germany and Finland. How did this work?
It worked very well. Our Client Manager is Jitka Kulhankova, who set up the analytical team for El Nino. Although the team members came from different countries, they managed to provide us with output respectively in Czech and Slovakian. The work of the Expense Reduction Analysts partners from Finland and Germany was also made available to us and much appreciated; however thanks to the Expense Reduction Analysts methodology, we were able to communicate in Czech.
How satisfied are you with the savings achieved for projects already implemented?
The savings achieved have exceeded our expectations, as did the professionalism of Expense Reduction Analysts. After seeing what Expense Reduction could accomplish with our first three projects, we decided to extend our cooperation with four more projects. The savings achieved are a brilliant way to improve our financial accounts and report this to our shareholders.