Large financial & insurance institution

Client details:
This client was a large regional financial and insurance institution based in Victoria.

Client requirement:
Techfin assisted in providing funding for a new CRM software rollout and some hardware.

The client engaged with one of the larger CRM firms to supply and install a new CRM database. The total cost of the project was $700K which was made up of an annual licence fees for $375K, installation and training costs of $200K and some mid-range server hardware for approx $125K.

The client’s primary issue was that they did not want to pay the full cost of the project up front and wanted the ability to pay the contractors as and when certain milestones were met.

Whilst the suppliers could offer some temporary delayed payment plans they would not agree to provide the extended term the customer was seeking.

Client solution:
Techfin proposed a solution that meant the supplier’s received 50% of their costs upfront with the balance to be paid over a four-month period once certain benchmarks were met.

In addition the client also wanted to stagger the repayments to the financier so that the cash outflow was in line with their expected benefits from the CRM rollout.

The proposal that was agreed to by the customer meant that for the first 6 months their monthly payments were reduced by 50% of the full payment amount with the balance amortised over the remaining 54month period.

In providing this solution the customer was able to enter into and complete the project ahead of their initial timeframe, as we were able to manage their cash flow so the customer did not have to pay for the full project upfront.

This case study is based on a client being able to access the technology solution without having to pay all the soft costs up front. Soft costs = software / installation etc. By delaying the pmts to the supplier it gave the client leverage to make sure things were being done as planned and that the cash flow impact to the client increased as they started to receive the benefits of the expenditure.

It also provided certainty to the supplier that the funding was in place.