Ongoing validation is the key to success

Overview
RISO, Inc. is a wholly owned subsidiary of Tokyo-based RISO Kagaku Corporation, the world leader in digital duplicating technology. Headquartered in Danvers, Massachusetts, the US subsidiary is responsible for the distribution of digital printing systems, software, supplies, and accessories that help organizations improve information management while significantly reducing printing and copying costs. RISO, Inc. distributes its products through dealers and direct operations in the Americas and the Caribbean, with full sales, marketing, and service support. The company markets a multi-technology approach to information and document management designed for productivity, versatility, and cost containment.

Challenges
• Confirm competitiveness of existing contracts for indirect services.

• Squeeze out additional savings opportunities.

• Leverage internal resources.

• Achieve incremental savings without disrupting service or incurring upfront costs.



Cost containment is the mantra at RISO, Inc., a leading supplier of digital printing systems, supplies, and accessories that help its customers --including government agencies, schools, church organizations and businesses--improve information management while significantly reducing in-house printing, copying, and document duplication costs.  RISO’s most recent product is the newly released HC5500 color copier, which, by providing 150-page-per-minute, 3 cents-per-copy color capabilities, transforms the cost-effectiveness of color copying, making it practical for additional applications.

The same unswerving commitment to providing cost-saving benefits to its customers also guides the company’s approach to internal business practices.  John Perkins, Corporate Controller for RISO, Inc. in Danvers, Massachusetts, has implemented numerous internal cost-containment policies and procedures and has negotiated several favorable vendor contracts. Even though these efforts have been effective in controlling costs and have resulted in significant year-over-year savings, Perkins believed that additional savings could possibly be achieved in some areas by utilizing specialized expertise.

Continuous cost-containment demands external expertise
Perkins’ believed that by utilizing external, specialized expertise, he might be able to squeeze out additional savings in certain expense areas. Just as customers look to RISO for expert advice on reducing document duplication costs, Perkins recognized that external expertise would be required to realize these potential additional savings.  Perkins believes from his experience that even companies that do their homework well and  aggressively negotiate vendor contracts are probably leaving money on the table in some cases and don’t realize it unless they obtain superior market information and specialized expertise.   

As Perkins observes, “It doesn’t make economic sense ito pay for savings that the company can achieve internally.  We hired Better Cost Control (BCC) because they have a wealth of resources and expertise in negotiating various vendor contracts similar to ours.  We particularly liked BCC’s flexible approach to billing and the fact that they calculate their fees based on savings.  ” 

While some cost-containment consultants work only on an hourly-fee basis, BCC has a full menu of flexible billing options, including a fixed-fee option and the payment of a share of the savings.  “BCC has been a true business partner with us.  In some instances, BCC has identified cost reduction opportunities to us at no cost and has given us the information needed to do the work ourselves   I consider utilizing BCC as a no-risk proposition because we only incur fees based on cost savings that we determine would otherwise not be achievable either because of a lack of internal expertise or cost effectiveness.  The process of determining the areas of potential savings is conducted with BCC, who sometimes pass on projects that after an initial analysis indicates it would not be cost effective for them to pursue. ”.

Expertise in many areas
BCC has assisted RISO with an analysis of several existing vendor contracts governing telecommunications, freight, payroll administration and office supplies.  Because BCC had experience in negotiating similar contracts for other companies, it had access to competitive pricing benchmarks and industry information that RISO did not have, which BCC used to negotiate better pricing.  “BCC has knowledge and comparable data from other companies that negotiate similar contracts.  This allows them to leverage information that is unavailable to us or difficult to obtain.  Because contract negotiation is their business, they can use this information to get us a better deal.”

Perkins said BCC coordinated their efforts and analysis without taxing RISO resources.  “BCC has assisted us in all areas of the analysis process including copying of invoices.  They completed the work, which we simply did not have the resources or expertise to perform on our own, with minimal effort on our part.”

Savings nearly across the board
Through a combination of renegotiated contracts and newly implemented internal systems, including a method for auditing UPS invoices on a weekly basis that uncovers billing errors, BCC was able to cut RISO’s annual freight and shipping costs. “Our year over year savings exceed over $165,000 a year, based on UPS small package and LTL shipping,” Perkins says.  “This amounted to savings of over 20 percent in this area.”

BCC was also able to help RISO reduce office supply and payroll administration costs by 5 percent.  An analysis of telecommunications contracts confirmed that RISO’s staff had done a good job negotiating those contracts.  “BCC has also helped us to confirm areas where we feel that we have done a good job internally.”  Perkins stated that “Since we started working with BCC two years ago, we have been able to reduce annualized expenses by more than $200,000 without negatively impacting our services or vendor relationships.”

Perkins says the savings BCC negotiated demonstrates how aggressive cost-containment sometimes requires external expertise.  Perkins points out that “As a controller in today’s competitive business climate, I need to continuously find ways to control costs.  In addition, I have limited internal resources and must continuously evaluate the cost-benefit of everything either my staff or I decide to pursue.  With little effort and no upfront investment, we were able to work with BCC to accelerate savings and make a significant contribution to our company’s bottom line.”  BCC can assist firms that recognize these business realities and can generate new savings which directly improves a company’s bottom line.