New research from O2 reveals that, despite experiencing the biggest economic recession since the Second World War, almost half of businesses in the UK are failing to review costs for essential suppliers and keep margins low.
Altogether, 47% of UK businesses admit to not having reviewed or switched their essential suppliers within the past two years, or even longer; this includes 15% who have never reviewed expenditure on essential business services such as technology, telecoms and utilities.
The research, developed in conjunction with Professor Christopher Bones, Dean at Henley Business School, was commissioned as O2 announces its move to offer a wide range of fixed line services to business customers. The findings further demonstrated that businesses still view complexity as a major barrier to switching (18%) and a further 22% fail to see the link between saving on suppliers and bottom line business impact.
To help customers address these issues, O2 is launching its new ‘Joined Up’ communications service. The new services will provide businesses with one single converged solution for their telecoms requirements spanning mobile, fixed line, data, broadband communications, equipment and professional consultancy. It gives businesses of all sizes an opportunity to outsource their telecoms, ICT and consultancy needs to just one provider, reducing the amount of time spent handling and managing systems and communications services, which are not core to their business.
Ben Dowd, business sales director for O2 in the UK, said: “Businesses are often dealing with a hugely complex network of suppliers but are motivated to simplify and streamline their bought-in costs. By moving into the fixed line market we are now able to provide our business customers with a genuine end-to-end service which incorporates landline, broadband and hi-speed data as well as the mobile and consultancy services we already offer.
“This development is in direct response to what our customers have told us they need. We have signed a new agreement with BT Wholesale to provide the O2 branded fixed line element for our new communications service. This is an exciting time for us at O2 and now we can truly join up our customers’ communications and IT needs.”
Bones commented: “If UK businesses fail to rein in their costs and keep margins low during this crucial economic time, they are wasting money that could be better spent on jobs, research and development and expanding into new markets.
“Other than reducing head count, essential supplier costs are quite literally the most obvious place to look to slash costs and ensure the business is operating as cost efficiently as possible. Small business, which is the lifeblood of economic recovery, is particularly losing out and if this isn’t addressed, money that should be spent on the innovation that will ultimately lead us out of recession is being wasted.”
Of the 50% of business who have managed to review and switch suppliers in the past 12 months, 76% made a saving by doing so. The average amount saved by businesses is just over £10,000. These findings also reveal that the average business spends £78,300 on essential suppliers annually. This means that in total, UK PLC could stand to save a staggering £1.2 billion by conducting a simple review of essential services to ensure that they are on the best deal.