What does CSI do and how does it do it?
CSI is a global lessor and we have been operating for over 42 years. Headquartered in the US, we have legal entities in 26 countries across the world. We have European subsidiaries in the UK, France, Italy, Spain, Germany, the Czech Republic, Slovakia, Poland and Portugal.
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We can also transact business in numerous other countries on a cross-border basis, including a host of other European countries from our operating base in Europe, for example, Norway, Sweden, Belgium, Luxembourg, Austria, Switzerland and Holland.
CSI is a full-service residual-value lessor specialising in IT leasing. When we talk about ‘leasing’ we mean fair market value leasing or operating leasing. In most countries we’re not talking about how leasing may be interpreted in the UK, in terms of hire purchase or finance leasing, where ownership of the underlying asset is deemed to be passed to the lessee.
CSI typically retains ownership of the assets but injects a residual value investment into the equipment to make rentals lower and assist customers with their financial ratios, as well as keeping them at the leading edge of IT technical refresh. CSI is focused on trend market values and tailoring solutions to fit a particular customer’s needs.
We also provide a full-service cradle-to- grave solution; we are not just a financier. A lessor that deals in traditional ‘money over money’ deals with automatic ownership at the end are competing with the banks and their low cost of funds in this low-interest-rate environment.
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By GlobalDataWe emphasise a full-service package, dealing with relationships that ‘touch’ the customer at many points during the lease, adding value throughout and realising our residual value investment when a customer returns the gear at the end of the lease.
We can’t compete with the banks on the price of money, because we’re not a deposit-taking institution, so we have to provide other services that gives us competitive advantage. We’re not just a finance company, we are a full-service professional lessor with over 40 years of experience.
We appreciate that customers need to manage their IT estate and so we provide free of charge an asset tracking service via our online asset management system, called MyCSI, which details the equipment that a lessee has on a lease, including specification, location, start date, end date, user name, manufacturer, serial number etc.
MyCSI is customisable and clients can produce reports from MyCSI to help them manage their business, for example, when leases are going to mature, what the age of the equipment is, the manufacturer of the equipment and the profile of the equipment.~
CSI has also established equipment remarketing centres in Europe – one in Slovakia and one in the UK to offer a full cradle-to-grave solution for the customer while ensuring their data undergoes a data-sanitising process.
So for CSI, leasing is not just a strictly financial type transaction for us. We offer so much more while continually offering a refreshment and replacement of customers’ equipment to keep their IT assets up to date and at their most efficient, for the most economically viable cost.
How do you gain market experience?
Well, we have been in the business since 1972 so we’ve quite a lot of experience to draw on. But the market is always evolving and that is the key.
Moving with the times, providing solutions to a customer’s needs while maintaining our core values and competencies. But we are always evolving and today in Europe direct business accounts for 50% of our business, with the other 50% coming from vendor programmes with leading manufacturers and suppliers, while retaining our independent ethos.
Is the US ahead of the game in terms of service-led business?
No, I wouldn’t say so. The world is a small place these days and customers globally demand the same things. Many customers want a full-service or managed-service solution, at a competitive price, from organisations that know how and what to deliver.
In my view, the US corporates are perhaps a little more short-term in their thinking – dealing with the here and now, and the next set of quarterly financials perhaps.
They see IT assets as a tool for doing their business. They want to invest in their core business and not rapidly changing and developing assets that can soon become obsolete, so they choose fair market value leasing where they know having up-to-date technology can be an advantage to their business.
Many successful corporates use leasing as a financial tool to comply with bank commitments, to stay at the cutting-edge of technology, to retain their own cash to invest in their core business and to have the flexibility of a solution to suit their changing needs – better than owning non-core assets that eat up liquidity and which can quickly become obsolete, slow and inefficient.
Perhaps in Europe corporates take a longer-term view – that’s probably the fundamental difference.
Are there countries in Europe that are more engaged with life cycle management?
Well, the whole of Europe should be engaged and familiar with the concept of life cycle management.
Everybody has a responsibility to manage their obsolete data and hardware in an environmentally friendly way, but do all corporates practise this?
Linking responsible asset and data management policies with our core lease offering makes it easier for companies across Europe to facilitate this goal.
Our two centres in Slovakia and the UK are strategically placed to service the whole of Europe, but I’d say that perhaps in Germany, the largest economy in Europe, is where full fair market value leasing is most widely adopted.
In terms of strategy, where are you going to be focusing this year and the year after?
There are essentially two strands to our strategy. One is to have a mixed route to market where 50% of our revenues are obtained on a traditional direct-customer method, and 50% from our programmes with our valued manufacturing and reseller vendor programmes.
The second strand is, of course, to service all of our customers to the standard that they and we have come to expect: to listen to our customers, educate and develop our staff, and evolve and grow along the way.
How do you persuade manufacturers to set up a vendor financing programme?
It’s about value-add and showing and demonstrating to vendors that we can make a difference; that we can improve their business, sales figures and general offering by making use of our skills, experience and resources. It’s about relationships and delivering exactly what we say we can do.
We try to coach and educate our vendors sales teams on the benefits of fair market value leasing; providing ongoing training, accreditation at various levels and stages and implementing strategies to upsell more equipment by putting it on a budget rather than on capital expenditure.
We are fortunate in CSI Europe in that we have a very experienced and able sales leadership team led by Arnaldo Rodriguez and Enrique Riquelme, who live and deliver our vision on a daily basis.
How do you figure out where to pitch for new business and to gain new customers?
It’s a process to some degree, a mixture of art but perhaps more science. There is no point fishing in the wrong pools so like we tailor our services and solutions, we tailor our efforts to achieve the desired targeted customers.
It starts off with the size of customer that we are looking for, somebody with an IT budget that’s going to be sufficiently large to warrant their time and our time in operating a leasing programme.
In general we’re looking for customers with an IT hardware spend of at least 200-250k per annum.
We research the targets on the number of seats, or the number of employees, and of course we pre-screen our targets on the basis of financial standing, because essentially we are a cash flow lender, lending money in the form of IT equipment.
One doesn’t want to put in a great deal of sales effort to pitch to a customer, to agreed terms, only to find that their credit was not sufficiently robust for us to approve the transaction. So our sales teams all know that creditworthiness is the order of the day.
Leasing is not a lender of last resort. It is a premium, full-service offering – so much more than just pure financing.
