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Managed Services - The Vendor Perspective

Finance Directors in post recessionary Britain are all very cautious at taking on new debt. Traditional off-balance sheet solutions such as operating leases are often now viewed as debt too. A managed service contract however, is primarily a service contract between you, the vendor and your customer; not a financing agreement between your customer and a finance company. This is fundamentally different and is often misunderstood, but is possibly one of the most important points to understand in the whole of contemporary customer financing.


Managed Service contracts are much talked about and many vendors already recognise the benefits to themselves and their customers of using a managed services contract to deliver equipment and services:

It is a true “off-balance sheet” product; especially important for large corporates and the Public Sector – CSG believes that the Government will be encouraging the Public Sector to find new ways of keeping up with technology without borrowing – Managed Services is the answer.

One contract controls whole relationship with customer

One contract covering equipment and services blocks competitors and locks customer in Contract is fixed which provides you, the vendor with continuity of revenue, and your customer with a fixed budgetary cost.

The contract allows for simple upgrading of equipment or service delivery without need to re-negotiate a whole new contract

Many customers see the benefits of this product and will require their vendors to offer it However, vendors face a number of issues with this method of delivery of their products and services:

Negative cash flow; vendor has to buy in equipment etc, and then wait over term of contract

to be paid; this can restrict use of a MS contract or actually strangle the vendor

Legal costs of developing their own contract

Internal billing issues for this new contract

Revenue recognition; vendors can only account for revenue as they receive it from customer

CSG managed Service Financing – unmatched innovation

CSG’s MSA is designed to allow the vendor to accelerate all those costs associated with initial installation of the customer solution including equipment, software, installation and implementation costs. In this way the vendor recovers all their initial outlay at the outset including their profit margin on the sale of these delivered items, so the whole process is cash positive.

CSG has it's own template document that we work with you to match to your requirements. With our own in-house legal support, we can expedite these negotiations for a rapid delivery.

CSG can manage billing of equipment and services for you so taking away this additional cost.

CSG’s managed service agreement (MSA) has been reviewed by Grant Thornton who state that a vendor utilising it will be able to recognise the income generated as a result of the sale to CSG of the delivered items as above. You gain full revenue recognition for these items.


CSG can use variations of it’s product to even accelerate the profit margin on services that the vendor buys –in and sells on, e.g. fixed call costs and line rental in the telco sector.

CSG Managed Services – full support

CSG has extensive experience of negotiating, implementing and running Managed Service programmes throughout the UK. Our simple Road Map takes you from initial consultation to launched programme rapidly and painlessly.

CSG Managed Services – across all sectors

CSG is a financial innovator, and whilst much of our activity is within the technology sector, our products and expertise are equally applicable to a wide range of industries, especially those that combine equipment sales with on-going support and services. In this area our Managed Services Financing programmes can transform our partners.