Boutique energy strategy vital says PHS Group

CAERPHILLY, Wales - Dec. 3, 2014 - PRLog -- Businesses should adopt more pro-active, tailored strategies to reduce spiralling energy bills and provide budget certainty says Fiona O’Toole, Procurement Category Manager at one of the UK’s leading workplace service providers, PHS Group.

The workplace services company brought in energy consultants UES Energy in 2013 to help them develop a customized energy procurement and contract management strategy, and Fiona O’Toole says this has already resulted in significant savings and added much needed market context to the contract selection process.

“PHS Group provides a wide range of products and services - from washroom management to data shredding - to more than 200,000 businesses from more than 140 sites across the UK and, in doing so, we run up significant energy bills,” she said.

PHS worked with UES Energy to develop and implement a full energy strategy. UES Energy Business Development Director Richard Bennett said: “Like a lot of larger organisations with multiple sites, PHS’s energy portfolio was fragmented and difficult to manage. Unlike a lot of larger organisations, however, they realised they could be doing it a lot better and also saw the need to make this a real priority.

“The three things they sought were greater transparency, more sophisticated energy procurement processes and much better post-contractual support. In short, they needed a slick and highly efficient energy strategy which we helped them to draw up.

“To implement it we had to start from scratch as the data we needed simply didn’t exist in one place. This is often the case when businesses haven’t had a full energy strategy before. And with a business like PHS Group, with more than 140 sites across the UK and often multiple gas and electricity contracts at each one, in addition to further business acquisitions along the way, there is usually a lot of groundwork to do.

“We now manage 183 supply points for them and several more have been identified, many of which are in leased buildings. And we have been able to start providing them with energy procurement services, bill validation processes and significant support with portfolio management including query resolution.

“The procurement goal is to consolidate their contracts wherever possible to provide greater leverage when negotiating with suppliers and, having identical end dates, they become much easier to manage. By monitoring the markets we’re able to advise the best time to negotiate new contracts and as independent consultants we can find and present the best options for them. We’ve already made significant savings here and these will grow as other contracts join the group deal.

“We’ve also validated hundreds of bills, checking for mistakes and resolving a whole range of contract disputes ranging from supply transfer objections to meter installation issues. In all this we’ve saved PHS Group countless hours of administration time.

“While we continue to manage and implement their procurement processes, we’re now exploring further payment integration which has the potential to save them almost three working days every month. And we’re also helping them to understand the implications of EMR for the group and working with them to improve the data capture and usage.

“There’s a lot to do but when the process is complete it will have transformed their energy management into a fit, lean operation.”

Fiona O’Toole added: “It’s a major change we’ve been going through but Richard and his colleagues at UES Energy have not just shown us what to do but have gone out of their way to educate us so we can make many more informed decisions ourselves in future.

“With their continued support, we will achieve our goals of keeping energy costs down, providing budget certainty and reaching a state of transparency in this complex area of our business. And this is precisely what other businesses of our size and complexity should be doing. Energy procurement and contract management need to be handled with a tight rein and it’s clear to me that most businesses would benefit from this boutique approach.”

ENDS

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The challenge

PHS Group needed expert advice on procurement, identifying their needs, monitoring markets and quickly identifying contract options when market conditions prompted activity.
They also needed a more streamlined and efficient post-contractual system to avoid missing termination notices which would result in them paying expensive default rates. They would clearly have benefited from a team of dedicated experts to resolve queries, such as transfer objections, which the billing team were tasked with. Similarly, invoice validation would be more efficient if performed by experts.
The group also needed a strategy for adding new sites to its portfolio and specifically to the group contract.
And the data gathering system needed revamping to provide more accurate, extensive and reliable data.

The solution

UES Energy initially provided PHS Group with energy procurement services, bill validation and significant support with portfolio management, query resolution.
They originally started with 141 supply points that were readily identified from available data. They have since located more and now manage 183 and they have also identified other supply points in leased buildings. The process to bring all supply points into a group contract is ongoing and 35 have already been added, many of which were out of contract and being charged at a higher rate. Significant saving have been made by setting up bridging contracts for these.
Although just part way through the process, the average contract cost for hourly and non-half hourly metered electricity supplies and gas supplies has already fallen significantly and will save more than £48,000 in the first two years in addition to the bridging contract savings.
Sixteen contract disputes have already been resolved, ranging from supply transfer objections to resolution of a long-standing debt issue at one site in which UES Energy not only resolved the claim but helped negotiate a 50% discount on the amount owing.
More than 1,800 invoices have been validated in 12 months. UES Energy is now exploring further payment integration opportunities that could save PHS almost three working days every month.
UES Energy is also exploring the implications of EMR for PHS Group and reviewing options to improve data capture and its usage.

Caption: Fiona O’Toole, Procurement Category Manager at PHS Group and Richard Bennett, Business Development Director, UES Energy, work together to create boutique energy strategy

For more information contact UES Energy at www.uesenergy.co.uk.