September 1, 2018
Companies can save cost and maximise the value of their IT investments by taking a total lifecycle approach to funding and managing assets – this is the belief behind Close Brothers Technology Services, while adding services like data security further increases the advantages of asset financing.
Close Brothers Technology Services’ lifecycle approach provides options that start with acquisition and end with disposal, for asset types ranging from hardware servers to smartphones, as well as software and maintenance services.
“We look at what drives a client’s business, how technology fits their plans, and see how we can help them use it to run their businesses better,” says Ian McVicar, chief executive officer at Close Brothers Technology Services.
Close Brothers Technology Services offers residual value finance, hire purchase and loans, typically on three to five-year contracts.
In a little over two years, the company has built up a 24-strong national team with a growing reputation for its client-focused ethos, with the North East served from its Newcastle office, which is headed up by relationship director, Craig Smith.
Understanding the SME market
Close Brothers Technology Services’ core client base is companies with turnover above £10 million and more than 100 employees that invest around £250,000 a year on hardware, software and IT services.
“It’s usually when companies reach this size that they can experience management issues around their technology assets. They need to establish clear rules on data security, decide on product refresh cycles, and keep an eye on bringing down the total cost of ownership,” says Ian. “Our solutions become more relevant at this point.”
Close Brothers Technology Services is adept at understanding and meeting the needs of company directors who may have differing views on technology investment.
Ian continues: “IT directors and chief information officers usually focus on delivering the best solutions quickly with the best quality products. On the other hand, CEOs and finance directors are often more interested in value for money and low cost solutions.
“Our client relationships are about finding the best path for everyone.”
Tackling the hidden costs of IT ownership
‘Think before you buy’ may sound like obvious advice, but it can be overlooked by businesses when they buy technology and services.
Close Brothers Technology Services’ consultative approach with clients focuses on answering practical questions, like how long they will want the equipment and what they intend to do when the time comes to replace it.
Ian reflects: “One issue businesses might not factor in is that the older the technology gets, the higher the ongoing costs of maintenance, updates and security. These can be significant hidden costs, sometimes two or three times more than the original investment price.”
By looking at the bigger picture in terms of their technology requirements, companies can save on the cost of financing their technology assets.
Ian gives an example: “It can be tempting to upgrade with cheaper laptops that don’t feature the latest microchips. But newer equipment offers benefits like faster processing speeds and longer battery life.
“Although you may pay a slight premium for newer kit, this is often outweighed by higher residual values, which bring down monthly asset finance costs.”
Clients are often surprised at how much value can be left in their old equipment. “We help clients get some of that value back, for example, if equipment can be broken down for spare parts or re-sold,” adds Ian.
Data security priority
Close Brothers Technology Services’ solutions go beyond traditional financing to include securely maintaining data held on equipment. “In fact,” Ian says, “we believe we are the only UK finance company offering Blancco data erasure software in our contracts.”
For a nominal extra charge in their finance agreement, clients have the peace of mind of knowing data can be removed from computers, smartphones, laptops and servers as often as they need. Data removal is certified as being in line with regulatory requirements, including GPDR. When the cycle of IT ownership ends, data erasure and equipment tracking during disposal can be included in the finance contract.
Client focus: InLink
InLink was a start-up company that needed funding for its unique assets. InLink units are replacing payphones in prime locations in London and other UK cities to provide ultrafast, free public wi-fi, phone calls, device charging and a tablet for access to city services, maps and directions.
Close Brothers Technology Services provided a multi-million pound deal to fund the full installation and equipment costs, helping ease cash flow concerns and speed up the equipment rollout process.
Monica MacKinnon, chief finance officer at Primesight Ltd & InLink Ltd, says: “The Close Brothers Technology Services team took the time to really understand the business and worked hard with us to create a bespoke solution which met all the operating and financial criteria we were looking for.”
Client focus: ICAS
ICAS – the world’s first professional body of accountants – has a stated ambition of becoming a leader in digital services and in 2016 embarked on a business transformation programme to set them on the path.
The funding solution agreed was a lease using a residual value investment by Close Brothers Technology Services, providing ICAS with a very competitive price over the agreed term with the total sum of the rentals being less than the cash price. This structure also allows the cost to be spread over the useful life of the equipment.
Carolyn Spencer, director of Digital Transformation, ICAS, reflects: “Close Brothers Technology Services were great to work with, they understood and predicted the questions and challenges our colleagues had. They clearly invested the time and the right skills to ensure our deployment of new equipment was successful without any major problems.”
Client focus: Third Financial
Third Financial Software Limited (TFS) provide market-leading investment management software and FCA Regulated Platform services, and wanted to build a new wealth management system to meet the needs of the UK’s smaller wealth managers.
Close Brothers Technology Services provided funding that was secured against TFS’s Software Intellectual Property Rights (IPR), a non-traditional source of security.
Stewart Foster, group chief executive at Third Financial Software, says: “We felt that Close Brothers Technology Services’ software intellectual property product was a great match for our innovative Wealth Management solution.”
Close Brothers Technology Services
To find out more about Close Brothers Technology Services contact Craig Smith, relationship director, North East of England