ESG's Mark Peters discusses marketing challenges during these challenging times with Jim O'Grady of HPE Financial Services.
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Mark: In this series of videos, I've been talking to industry execs about the impact of the pandemic obviously. Today, I'm particularly pleased to be joined by Jim O'Grady from HPE. I'm particularly pleased because Jim can give us some insights into the massive economic stimulus, I suppose, or program that HPE was able to introduce.
So, let's start off just by talking about your life in the pandemic before we talk about the program specifically. I know you're actually in the office and I think you're responsible for an essential business as much as anything else. So, how much has life changed as a result of the world order?
Jim: I think life has changed tremendously. First, just managing ourselves through this crisis has been just an incredible experience because it has allowed us to get a lot closer to our customers and helping them solve some of their liquidity and cash issues. But the other aspect is keeping an essential business running.
So, I'm sitting in Andover, Massachusetts, which is part of one of our owned and operating technology renewal centers, which configures and remarkets to our end clients, certified HPE pre-owned product. And keeping that operations alive and well and running through this crisis has been quite a learning experience.
Mark: I said we're going to talk about this program, $2 billion worth, at least that's, I believe, what's been earmarked. So, what are the headlines of the program?
Jim: The headlines is we have several broad offerings that we can help our clients with, especially the ones that find themselves in cash constraint or liquidity issues. One is simply to help them to defer or reduce their expenses. You know, the first offering we can help clients defer payments of new technology purchases 'till 2021.
We can help them by paying basically 1% of their contract and deferring the rest of it till 2021 where they begin to pay full payments plus interest rates. The second one is just matching payments to production. So, a lot of our clients are deploying new technology, but they're very cashflow concerned and they're waiting for this new technology to bring on new revenue inflow into their companies.
So, we're trying to help them match expenditures and cash inflow. So, this really helps a customer deploy new technology, stand it up, get it productive, start generating revenue, and then we can help match a payment plan to put those two together to make it a lot more effective for them. Another one is just generating cash from existing assets. Customers when they're moving from one platform to another, they generate end-of-use assets, those assets can have a lot of value.
That value can be applied to the new technology transformation. So, we can buy those assets back for those clients and help them redirect those proceeds from those assets in a very creative way. And lastly, we have a short-term rental program. So, for clients who are looking for workplace assets, we can help them with a one-year short-term rental program.
Mark: You start talking about contractual items and financial flexibility, and you know, I mean, every man and his dog from the legal department and the operations department, notwithstanding finance, has something to say, how on earth did you get this done so quickly?
Jim: We sort of leveraged the prior programs that we had with helping clients with onboarding cloud technology. So, we were able to leverage all of the talented people in the organization. It really was having a little bit of insight and foresight that this is going to happen and it's going to happen quickly. Anticipating our customer's cash flow concerns, I think we just got ahead of the curve a little bit faster than our competition.
Mark: The world is already beginning and hopefully, it is right to talk about reopening. What happens with a program like this? When does it stop? Is there a known end to this?
Jim: We don't have a hard end date yet, so I think we're going to wait and see, and then we'll adjust as we go. So, I think we're taking it on a week-to-week basis to figure that out.
Mark: No. Okay. Yeah, I mean, that seems to make sense right now. I'd like to close with something that I sort of, you mentioned straight off the bat, which is helping customers. Both in terms of helping them and helping yourselves to help them, are there lessons learned in doing all this that you think will carry forward? I mean, we talked about added flexibility from the way we're all having to work.
Do we lose that because we just go back to being slothful human beings again?
Jim: Yeah. I think the lesson here is that customers really need our help, especially when they find themselves in a cash or liquidity issue and limited financial capacity. So, we're really been paying attention to get as close as we can to our customers every single day.
We are quite convinced they're going to remember us as we come out of this crisis and we'll just have a better overall relationship. Now, they understand we're just more than a financial company, that we have other asset management based offerings like our certified used equipment, our asset upcycling services where we can buy back assets and get creative how we structure all of that together. I think they realized that we can help them keep their short-term IT investments going a lot more optimally and increasing their capacity with it.
Mark: Well, thank you very much, Jim. It's interesting most of these conversations have been with people from, you know, understandably from the marketing and sales perspective. It's nice to talk to someone from a different perspective, but doubly nice to hear that many of the, not the issues, but the upsides are also consistent and that there seems to be an intimacy and a closeness to customers that can be generated by this; hopefully, we're all going to keep for the long-term.
Jim: Yeah. It's been great. Thanks, Mark.