NEWS
The vast majority of UK companies are overpaying for telecoms, electricity and gas services.
Nine out of 10 businesses are overpaying for these core services, according to a survey of more than 300 organisations by utility procurement consultancy Utility Watch.
Organisations are missing out on telecoms savings of up to 35 per cent, and up to 20 per cent on electricity and gas, it added. SMEs suffer the most.
When it comes to telecoms, Utility Watch said most companies seek the best deal on paper but fail to look in depth at how specific costs - such as line rentals, connection charges and minimum call fees - add up, so end up paying over the odds.
Many commercial organisations are also reluctant to change an existing electricity or gas supplier when they move into new premises and this kind of inertia is costing companies money, said Utility Watch.
Greg Shepherd, director and founder of Utility Watch, said the problem is organisations approach utility procurement with the same attitude they have for buying equipment. He said they must learn to shop around - as consumers do - in order to achieve the best value for money, adding that as utility prices are on the up this is more important than ever.
Comments
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1. Roger Huffadine
The real cost of utilities to businesses is NOT what appears on the paper bill.
Cheap telecoms, for example, means that the 'utility' does not have enough bandwidth to give excellent service during busy periods (more busy signals) and it won't have as many experienced engineers (longer wait for repairs) and it probably has a 'crap' call centre (more stress).
If businesses want to be on line and excellent with rapid responses to problems then they need to shop around for excellent service NOT cheap bills.
The same goes for power utilities - if you don't mind not having gas, or electricity, for several days & your business will not suffer then go ahead go for cheap.
When I was in business our attitude was buy the best so that we could give the best to our customers. Even the workforce had maintenance contracts (medical insurance) because downtime on personnel is just as damaging as downtime on machinery & infrastructure.
Organisations like Utility Watch might be better employed concentrating on the factors that are important to businesses and spending less time sorting numbers on spreadsheets.
2. Jerry
If 90 percent are not getting a good deal, does this not mean that headline prices and 'advisors' are telling less than the whole truth?
I seems to me that there's not so much an issue of customers getting it wrong as advertising and salespeople being allowed to flavour the truth in a big way.
3. Kerry Ritz
I'm not surprised that most companies are overpaying for their utilities, particularly telecoms, but it's wrong to put the blame fully at the door of SMEs. Of course, they have to take responsibility for their own business decisions but the telecoms companies certainly don't make it easy for them - deliberately so.
Most telecoms companies (i.e. BT) use complication and confusion to drive inertia amongst consumers to reduce churn. After all, who has the time to look through all the different tariff options available when you're running a small business? Plus the industry is adept at hiding the true cost of a service in acres of small print; they publicise low call charges but ignore the hiked up line rental; they rarely mention call connection charges; and extras such as call waiting are never listed in the headline price. With all this going on it's inevitable that most UK companies are overpaying for what they get.