Better buying helps BT cut costs

13 November 2009

13 November 2009 | Jake Kanter

Telecoms giant BT is the latest firm to credit procurement for cutting costs during difficult economic conditions.

In the company's second quarter results for the three months ended 30 September, BT said it was making good progress with cost reduction efforts, having already saved more than £900 million of its £1 billion target for 2009/10. It now expects to save at least £1.5 billion by the end of March next year.

BT has reduced capital expenditure from £766 million to £558 million as a result of improved purchasing and better management of capital spending projects. In addition, buyers in the company's Global Services division have negotiated better contracts with suppliers.

Other savings were made through reducing staff numbers and lower pension charges.

But the cutbacks could not prevent BT's revenue from falling 3 per cent to £5.1 billion compared with the same period last year.

Earlier this week Vodafone said it wants improved procurement to contribute to an extra £1 billion of cost savings by 2012, while last month BP said supplier negotiations helped it post better than expected results.


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