Interview with Ingemar Lanevi, Treasurer, NetApp
Transcript: How did outsourcing your leasing administration and automation help you? |
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Interviewer: So, originally you did it manually; paper, spreadsheets…
Ingemar Lanevi: Correct.
Interviewer: But then you automated…
Ingemar Lanevi: Correct.
Interviewer: And you brought in a partner that had both automation software and outsourcing with leasing expertise…
Ingemar Lanevi: Correct.
Interviewer: And, is that how you got control on the end-to-end process, and has that helped?
Ingemar Lanevi: A lot more control came into place because of that relationship, definitely. Fully well recognized that as we pushed it out and as the mandate became stronger, that, again, I don’t want to see any cash purchase of any serious IT equipment from anybody.
With that mandate, we needed to make sure that we could, obviously, handle the volume, because we were growing quite aggressively back then. This is going back, now, four or five years, when the growth of the company was in the range of 30 to 40 percent year over year.
So, pretty hefty growth, which required more investment from an infrastructure point of view as well as, on the engineering side, more labs to do more development of software products, testing of customer environments, etcetera, etcetera.
That all drove a high utilization, and obviously we needed to make sure we could scale and get a better process in place, because having one guy trying to do all these lease deals and all the documentation and everything attached to it became more and more complex and difficult.
So, again, by outsourcing a big portion of the program in terms of the programmatic piece of it, the administration, the follow-up, and having a system in place which would help us track all the deals out there, knowing when things come to term, getting automatic notifications way in advance before the lease has expired, giving the business owners the ability to have time and runway to plan.
And make decisions: OK, well, I know that server farm over there is going to come due in 12 months. I need to plan, what I am gonna do?
Do I keep it for another 12 months and extend it based on my predetermined price in, do I buy it out because I think I can squeeze another six years of use out of it, or do I start the migration and do I do a tech refresh? Is there a new box out there in that space that I need to stay current in my environment to make sure I can do the proper testing of stuff? Then let’s do the tech refresh.
But, again, have enough time to make that planning and make it all work for everybody involved in the process.
Interviewer: And because you have the controls and you have the data, you can push the data to the decision-makers in the field?
Ingemar Lanevi: Correct.
Interviewer: The financial decision information they need so that they can make the optimal decision at that time.
Ingemar Lanevi: Correct. So, they get full knowledge of what the whole thing looks like, and again, it starts with a deal up front with this new model of being able to look at all the alternatives and pieces so they can get a sense for what the big-picture savings are as well.
Not just the budget impact that typically is the only one that they really, truly care about. But it’s also an education for them, to let them understand there’s a bigger picture here. There is a cost of funds and a cash-flow benefit that you as a business owner get.
It might not impact you personally from a local budget point of view, but you’re a stockholder in this company as well. You should have the same mindset and urgency to maximize shareholder value as I do.
And, so, again, by educating them to get a full understanding of what the big picture looks like and why, again, this cash flow way of looking at it and the economic value of what that brings to the table is worthwhile. That is helping tremendously.
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