“As Customers, we are Always in the Middle”
With a local presence, savings banks are characterised by their branch structure. For instance the Sparkasse Jena-Saale-Holzlan, which was created a few years ago from the merger of three local savings banks, has 40 branches for the 150,000 customers. Mike Neubert, Manager of the Jena-Saale-Holzland savings bank, talks to Cost Savings Today about the importance of systematic cost management and shares his experience of collaboration with Expense Reduction Analysts to investigate the cleaning costs and achieve savings of 30%.
Cost Savings Today: The Jena-Saale-Holzland savings bank assists customers in 40 branches. What made you want to investigate cleaning costs?
Mike Neubert: Expenses such as cleaning always play a big role and are regularly put to the test. Due to the current situation and the very low interest rates some items have brought significantly less revenue and we need to focus even more on costs. The loss of revenue needs to be compensated somewhere else, which is why we focused on expenditure with the highest potential of savings. Cleaning was initially not included, as we did not expect to find big savings there – which proved later to be a wrong assumption.
CST: Looking back on the project and the results achieved – what are your conclusions?
M.N.: We are very satisfied with the results and savings of around 30%. I was also impressed with the way the operation was handled with the suppliers. We could see especially during the discussions with bidders that the cleaning companies were dealing with true professionals and that is how Expense Reduction Analysts was perceived. Discussions took place on equal terms. The cleaning service providers have explicitly stated to me how highly professional the entire tender process and discussions were. During the course of the project, there were now and then a few problems, like at the beginning of the project when the communication was not yet running smoothly. Also not everything in the report was self-explanatory – but questions were always answered quickly, directly and clearly. Another aspect that was very positive was that, as the customer, we were always at the centre of things. I had already experienced this with different consulting projects. When we had a point to make, it was accepted and implemented straight away. We were never told “it’s not possible”.
CST: How were the procurement responsibilities split before the start of the project?
M.N.: In the past, the cost areas and contracts with the cleaning services were administered rather than actively managed. After the current labour agreements, we had tried to negotiate with our local suppliers but we did not have the internal resources for a successful outcome. We also simply missed the necessary knowledge and expertise in the field. This is one of the reasons why we asked Expense Reduction Analysts for external help.
CST: You said earlier that you were very satisfied with the project – what is your verdict?
M.N.: When the project began, we were certain that savings could be found – but we had not reckoned they would reach 30%. We had regular talks with our service providers and thought that they could not fool us. Therefore we expected much lower savings than what we did achieve. It was important that the very first thing they did was to develop new room plans. In order to do so, all the facilities of all branches were individually measured again. Although we had plans of the branches, they were not up to date and did not reflect accurately the changes in the business premises. And due to the merger from some years ago, the plans were also not of comparable quality. This basic work was therefore the foundation for the subsequent call for tender. As we have a strong local presence, we also work closely with local suppliers. In agreement with Expense Reduction Analysts, we have decided to choose a national service provider as benchmark. I think this was very important to get good results.
Mike Neubert: Since 1992, Mike Neubert has held various positions in the Jena-Saale-Holzland savings bank. After working as Head of Sales Transactions and Online Sales, he is now Department Manager for the organisation.