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| The Client | Director of Technology Infrastructure International Imaging Company |
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| The Situation | After a recent reorganization, the company had consolidated all technology management for its US operations in a single business unit. Over the years, much of the company's PC, server and network equipment had been leased in numerous leasing agreements with a variety of leasing vendors. Lease monitoring functions were de-centralized, with significant impediments to lease tracking and financial accountability. | |||
| The Challenge | Identify and document the portfolio of leases, address expired leases, and develop a process and technology support for the ongoing management of the leased equipment portfolio. | |||
| What We Did | The DCL Group identified, organized and documented the lease portfolio. We negotiated with leasing companies to terminate expired leases, developed 5 year baseline leasing expense budget, and developed a tracking system for the lease portfolio with associated documentation, processes and procedures. | |||
| How We Did It | All existing lease documentation was gathered and reviewed. Contacts and relationships were established with each of the leasing companies.
Expired and expiring leases were identified. An analysis was developed to identify the lease expense paid throughout the lease life and to compare this to the original cost and current value of the equipment. An Internal Rate of Return analysis was developed to provide documentation to the leasing companies to support the company's position in negotiating cost effective termination solutions for the expired leases. The DCL Group represented the client in direct negotiations with each of the leasing companies to address the outstanding issues. An automated tracking application was developed and installed to support ongoing management of the leased portfolio. The application's functionality included system-generated worksheets to assist the company in timely decision making concerning expired leases by comparing buy-out, renewal and replacement options. Projected annual budgets were determined as a baseline for ongoing annual expense budget planning. |
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| The Results | Arrangements were negotiated with various lessors resulting in an $81K monthly expense reduction and the avoidance of $2.6 million dollars in lease buyout expense. Effective ongoing management processes were established. |
