Business challenge

Czech Property Investments (CPI) wanted to finance IT infrastructure and development projects through loans but found most banks were only willing to fund hardware under inflexible terms.

Transformation

Through its services, money that CPI would have to spend on IT is available to develop other projects that have a direct economic impact on operations, including the core business.

Results

Supports infrastructure

growth and enhancement without shortchanging operating IT needs

Eases budgeting

with access to lines of credit offering attractive rates

Frees up funds

to support strategic business acquisitions and initiatives

Business challenge story

IT project financing issues

Czech Property Investments (CPI) ranks as one of the most important investors in Czech Republic office, retail, residential, hotel accommodation and logistics center properties. Within Prague, major projects include the multifunctional Quadrio complex at the Národní třída metro station, the Meteor Centre Office Park C and the historic former Živnobanka. CPI also invests in projects outside the Czech Republic, such as the luxury residential Palais Maeterlinck in the French resort of Nice. The CPI property group currently manages assets with a value exceeding CSK 123 billion. This asset value offers wide access to capital and various financing methods. “For many projects, the banks are actually competing to offer financing,” says Jan Burian, Spokesperson and Communications Director at CPI. There are also terminology issues when negotiating IT financing. “IT is an alien concept for banks,” says Picek. “If you say you want to buy data storage, they think USB drives. It is basically impossible to explain to them that this is something completely different.” To address such financing challenges, CPI turned to IBM. “With IBM Global Financing, we have greater flexibility and support because it specializes in IT financing and is therefore known by those in this field and well aware of the established rules,” says Picek. However, the situation is different for IT funding. “Banks do not want to finance software, and even if they fund hardware, they are often inflexible and conservative,” says Radovan Picek, Chief Information Officer (CIO) at CPI. “For example, one bank offered us attractive terms for financing the purchase of servers but required the serial numbers of all equipment in advance. This was not possible, because the manufacturer does not produce servers until it receives payment.” CPI’s relationship with IBM Global Financing began in 2013, when CPI was looking for a partner to finance IT projects through loans. “We found that IBM Global Financing offered the best conditions, considerable flexibility, quality service and ability to meet our funding requirements,” says Tom Novotny, Business Application Manager and Deputy CIO of CPI. Picek agrees. “IBM Global Financing is much more flexible than banks. It is not a problem to negotiate individual conditions and exceptions. When we say we need something, it is able to adapt.” “With IBM Global Financing, we are still within IBM,” continues Picek. “Its people have extensive experience in IT. They know exactly what you mean, what you need and what that entails. In addition, all of our suppliers have signed contracts with IBM Global Financing. We simply buy what we need and forward the invoices to IBM Global Financing. It reimburses the vendors.” Peter Ščepánek, Channel Sales Leader for the Central Region within IBM Global Financing, adds: “We also offer financing as a loan, as well as leasing, which can be adapted to suit specific clients. Of course, there is a postponement of the maturity up to 90 days. We provide not only funds for the purchase of hardware or software but also comprehensively to the whole project, including implementation, training services and other necessary services.”  

IBM Global Financing is much more flexible than banks. It is not a problem to negotiate individual conditions and exceptions.

—Radovan Picek, Chief Information Officer, CPI

Transformation story

Enhanced flexibility

Over multiple years, IBM Global Financing has helped CPI finance IT infrastructure and strategic projects. During that time, IBM Global Financing helped CPI release the capital needed for expansion. It also provided quick and convenient access to financing for rapidly changing operating needs of the CPI IT group as a whole.<br><br>For increased flexibility in funding, CPI benefits from open IBM Global Financing credit lines that cover small and large outlays. To date, such credit lines have supported a range of CPI projects from network infrastructure—including integration services—to offices in the Quadrio building, in addition to funding countless minor operating costs such as an antivirus software license for 1,400 Symantec terminal stations. “A key argument for using IBM Global Financing services is the ability to finance mainly software products, without further conditions,” says Novotny.<br><br>In addition, CPI used the IBM Global Financing services for financing capital-intensive projects such as construction of a new data center and investment in a comprehensive corporate information system. “IBM Global Financing can finance anything—software, hardware and IT services—from any supplier,” says Picek. “For example, we established a data center where we used no IBM solutions. Yet the offer from IBM Global Financing was still more favorable than the offer of funding directly from the manufacturer of servers and data storage.”<br><br>

Results story

Freeing up funds for development

By teaming with IBM Global Financing, money that CPI would have to spend on IT is available to develop other projects that have a direct economic impact on operations, including the core business. CPI’s IT infrastructure is fairly extensive, including 1,400 end stations, 320 servers, hundreds of active network elements, extensive data storage and a tremendous variety of software tools. With each new acquisition, the number of managed elements increases, putting tremendous pressure on IT budgets and cash flow. “I personally use financing from IBM Global Financing because it is much easier when negotiating budgets,” said Picek.<br><br>“Moreover, the price of money offered by IBM Global Financing is lower than the return we make in the meantime on investment and development of our core business,” adds Burian.<br><br>“After 2.5 years of working with IBM Global Financing, we did not experience any negative deviation from the quality of service,” say Novotny. “It was thus a logical choice for us to finance our large-scale Microsoft Dynamics AX solution implementation project in collaboration with IBM Global Financing Certified Partner WEBCOM.”<br><br>The Microsoft Dynamics AX information system is a solid solution for multinational companies such as CPI that manage various types of real estate business for many organizations in multiple countries. “Our solution supports the entire rental process and all needs related to maintenance, repairs and renovations. Another module manages all activities for the construction of new buildings,” explains David Vajda, a member of WEBCOM.<br><br>CPI expects the Microsoft Dynamics AX solution to be integral in helping achieve its objectives because it will be the single platform across CPI group companies, replacing various information systems often operating on different platforms. “CPI expects to benefit by reduced costs of internal processes. Thanks to extra funding from IBM Global Financing, CPI can position the company future savings, without expending considerable investment resources up front.”<br><br>

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About Czech Property Investments

Based in Prague, Czech Property Investments (CPI) is a leading Czech Republic property group engaged in the investment, development and management of real estate in central Europe. The group comprises approximately 350 companies. Under CPI’s acquisition strategy, this number continues to grow.
 

Solution components

  • IGF: IT Financing - IBM Services and Project Financing
  • IGF: IT Financing - ISV Software

Take the next step

To learn more about IBM Global Financing, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/financing

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