What the 'unavoidable' Budget means

by TBausemer 23. June 2010 12:12

Overall, George Osborne’s budget is tough but fair.  It will hit jobs, spending, and hamper recovery, but in the end it was necessary for the greater economic good.

 

Here is my take on how Chancellor George Osborne’s budget impacts small business, the ICT industry, and Retailers.

Small Business – The Corporation Tax reductions will produce a competitive entrepreneurial environment for British business.  For the UK economy to recover, we need to increase small company creation, and reduced corporation tax will be a key driver.

Two other points that will help small business:

1)      Special incentives for new companies whereby they don’t pay NI on the first 10 employees, which will certainly increase the competitiveness of the UK in fostering small, local service firms and start-ups. 

2)      ‘Entrepreneur’s Relief has been extended to the first £5m of any capital gain in your lifetime at 10% - encouraging most small business owners to still sell their business when the time is right without a massive fee to the tax man.

UK ICT Industry – No shocks here.  Osborne reiterated the £6.2b already saved this year, and further cancellation of £2b in projects that were previously approved in 2010.  Education and Health are largely protected – good news.  Many of the details will be laid out in the upcoming Spending Review to take place on 20 October.  This much we know, Health and Education are protected, but those departmental budgets that are not protected are in store for a cut of about 25% by 2014.  ICT suppliers to the UK government should be very worried. 

Retailers – The biggest increase is of course the widely anticipated bump up of the VAT to 20%.  The VAT increase will hurt consumer spending and is certainly bad news for Retailers. It is important to note that this is still below most of the EU, and that items like food and child clothing are not charged VAT. 

This makes the current world cup season even more important to consumer electronics retailers (come on England!), and further magnifies the importance of the run up to Christmas shopping, as the VAT increase will dampen January sales. 

 

 

 

 

 

 

 

 

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Cash is King but Service Quality brings them back for the milk and bacon week after week

by TBausemer 30. March 2010 14:09

 

We have saved our clients a lot of money over the last three years.  One client recently told me that they have saved 50% almost overnight on Field Service Engineer costs, simply by switching to a per service event model, rather than paying full whack for an engineer, van, NI, etc. for 40 hours per week, they now only pay for an engineer when there is work to be done.

 

 

OrderWork started out as a ‘Services Marketplace’, in this early incarnation clients would place work orders that were automatically matched out to Service Partners who met certain technology skill and geographic filters.  These Service Partners would then ‘bid on’ work.  Our buyers would often choose their Service Partner based upon the lowest price.  The results were not good – clients were happy with the price, but unhappy with the quality. 

 

After about 6 months in this ‘cost – driven’ model, we flipped the switch in early 2007 to Plan B - a ‘Managed Service’ model.  This enabled our clients to have ‘one neck to choke’ if something went wrong, and enabled us to directly manage our Service Partner network.  The logic went that OrderWork’s Service Delivery team knew:

 

·        Who the best engineers are, because they had better insight into their performance ratings, and…

·        Critically we gained insights into the most customer friendly engineers in our network, and it has been this skill that has driven up our customer satisfaction scores. 

 

My point is that our first incarnation was too cost focused.  We have now twisted this in the new world to blend a competitive price with truly great customer service.  This enabled us create a high performance culture amongst our base of Service Partner engineers - on average they have been rated more than 60 times.  The better they perform, the more work they receive.  Job 1 everyday is to delight our customers with great service - our Service Partners live and breathe this.

 

We are not perfect, and we still use new Service Partners and new installers as we expand into every nook and cranny in the UK.  As we do so our shared focus on Service and Quality has enabled us to serve our clients well, and most importantly – allowed our clients to uphold their reputations for service quality.  After all, OrderWork is always representing someone else’s brand – and it is this responsibility that drives us forward in our Service led approach. 

 

In a tough economy, everyone knows that cash is king – but to gain true customer loyalty and repeat business – companies need to provide more service value to keep customers coming back.  Firms that sacrifice quality and provide a 'service for the masses' approach will lose existing customers as a result.

 

 

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