1. Finding Extra Profit
for XXX Corporation
Richard Ungaro
407-276-5312
rungaro@expensereduction.com

2. Agenda
1. Why focus on overhead?
2. Who is Expense Reduction Analysts (ERA)?
3. How can we help you?
4. Some key clients
5. How does the ERA process work?
6. Our typical cost categories
7. Where do we go from here?

3. Why Focus on Overhead?
• Current economic conditions are presenting challenges
for all companies in all industries
• Expense reduction is easier than increasing sales
• Saving One-Dollar of expense has the same impact of
raising revenue by $15 to $20 in most companies
• Expense reduction improves your ability to compete
• Expense reduction can be an alternative to headcount
reductions

4. Who is ERA?
• Established in 1992
• Over 14,000 projects completed world-wide in
more than 30 countries
• Average cost savings across all expense
categories is 19.7%.
• Focus on non-core operating expenses; savings
goes directly to the bottom-line
• No savings – absolutely no fee
• Work on a no-risk, contingent fee basis; fee is
derived from the measured savings that the
client receives
Demonstrated Experience and Results

5. How Can We Help You?
• What are your top initiatives this year?
• What seem to be the obstacles to achieving them?
• What metrics measure success or failure?
• How will achieving them impact your business?
• What do you need to achieve them?
• How might savings from your non-core cost
categories help you achieve your initiatives?

6. Some Key Clients
Broad Industry Experience

7. How We Do It
Alternative Approaches to Higher Profits
20% Cost Increase
Current
Reduction Sales
Column1
Revenue $ 100 $ 100 $ 140
Direct operating costs $ 35 $ 35 $ 49
Labor costs $ 35 $ 35 $ 49
Non-core indirect costs $ 20 $ 16 $ 28
Net profit $ 10 $ 14 $ 14
20% cost reduction or 40% increase in sales revenue
both yield a 40% increase in Net Profit

8. How We Do It
Analyze Define Options Implement
6-8 weeks 6-8 weeks & Monitor
per category 24 months
per category
per category
Process: Complete analysis of Select and manage suppliers Implement solutions,
business and requirements with recommendations measure and monitor ongoing
Activities: • Define scope • Identify Potential • Negotiate Supply Agreement
• Obtain data Suppliers • Implement recommendation
• Understand data • Benchmark to database • Monitor supplier compliance for
• Know requirements • Test the Market (RFP) 24-months
• Benchmark to database • Analyze the data
Deliverables: • Baseline Report • Recommendation • Implement & Compliance
Report review

9. Working Together
No savings = No fee
Expense Reduction Analysts Our Clients
• Operate with integrity and respect for our client’s • Provide timely access to information.
personnel and supplier relationships • Allow ERA to present a successful
• Analyze the client’s current costs and service recommendation and earn a share of the savings
environment during the subsequent Review Period.
• Identify and help implement hard-dollar savings • Have the sole right to select which of the
options for our clients utilizing our: successful recommendations is the best fit.
• proprietary process • Implement within 30 days, if ERA delivers a
• expert resources successful Recommendation Report.
• benchmark pricing data • Do not solicit any offers from suppliers or
duplicate ERA’s work, and refer all unsolicited
• Provide post-implementation support services
inquiries or offers from suppliers to ERA
throughout the review period
A successful recommendation is:
1. A lower cost solution from an incumbent supplier(s); and/or
2. A lower cost solution with savings above an agreed to minimum, from a non-incumbent supplier who provides
equal or greater products/service/quality; and/or
3. A solution from a non-incumbent supplier that our client elects to implement even though it does not meet the
criteria above; and/or
4. Provides savings realized from approved changes in methodologies or process

10. Expense Categories
Logistics Supplies
• Small Package Freight • Chemical
• Domestic Freight • Cleaning
• International Freight • Food Services
Insurance • Lab and Medical
• General/Worker’s Comp • MRO/Factory
• Health Consumables
• Packaging and Shipping
Services
• Printing
• Equipment Maintenance
• Stationery and Office
• Janitorial Services
• Payroll Processing
Telecommunications
• Printing
• Data
• Records Management
• Mobile
• Temporary Labor
• Uniforms • Voice
• Waste Management Merchant Card Fees
Leasing

11. Our Process Yields Predictable Results
• Savings can be achieved in 90% of projects
• Worldwide, we have completed over 14,000
expense reduction projects in 30 countries
• Our average savings have been 20% for our
clients
• We will continue to audit those category expenses
for the next 24 months to verify those savings

12. Best Practices (Summary)
• Gather and analyze the data
• Know the category/industry and market pricing
• Reduce supplier risk
• Go to market, then analyze results
• Negotiate well
• Implement quickly
• Monitor afterwards

13. What to Expect IF You Outsource
• What you should expect
• Deep category expertise and experience
• Detailed analysis with clear baseline pricing
• Access to aggregated (benchmark) pricing data
• Transparent earnings - disclose any commissions/incentives
• Implementation support
• On-going auditing of results
• Compensation based on delivered success
• The result should be:
• Much faster completion (by capturing lost savings)
• Much more savings (from using experts & benchmark pricing)

14. Effective Expense Reduction
Requires:
1. Detailed spend analysis
2. Benchmark pricing information
3. Category expertise
4. Time and resources
5. Auditing of the results
THANK YOU