Technology Reseller v50

01732 759725 44 Prof i le : Network Communicat ions Group Last year Network Communications Group added IT services to its growing portfolio of communications and network services. James Goulding finds out more from CEO Graham Powling reason why I chose the acquisition route. Acquisitions seemed the most sensible way to do it,” he explains. “I could build my own tech division, but while that would probably require less money, it would take considerably more time. Acquisition is the ideal way to bolt on those skill sets and bring those products into our group, giving us a complete set of products that services pretty much every requirement in the comms/tech arena.” Technology convergence This is a process that many comms and IT resellers are currently undertaking driven by a combination of factors such as technology convergence, hybrid working, digital transformation, the cloud and private equity-funded M&A activity. Powling adds that the rapid transition to cloud telephony and unified communications driven by the pandemic and new working practices has already had a transformative effect on the company. “If you’d asked me two years ago, I would have said that by now there’d be a 50:50 split between the cloud and onpremises equipment because with cloud the cost of ownership is slightly higher than owning the equipment. That is still the case, but the emphasis has changed considerably over the last two years. In fact, I can’t remember when I last supplied a new bit of hardware; pretty much everything we are now doing is cloud. “In a way, this makes diversification a lot easier for us because it means we need fewer on-site engineers – they are now desk-based; and we need to make fewer on-site visits than we did previously, though obviously we do meet clients via Teams and Zoom. It has changed the way we approach business.” While these factors are undoubtedly accelerating channel convergence, the reality is that NCG, like many other resellers, has spent the last three and half decades diversifying its offering through organic growth and acquisition as part of its natural evolution. Today its customer base includes SMEs and some enterprise clients, in the UK and overseas, from Ireland to Israel and even further afield in Asia, all at different stages of technology adoption, from legacy customers requiring maintenance of 20-years old ex-BT Meridian phone systems to digital natives who live in the cloud. “I entered the comms world in 1987 with a digital telephony company and over the years that has developed in different ways as we’ve grown. Sometimes I have used acquisitions as a means of growth. For example, I bought databases from Fusion Four Telecoms and Meridian Options to acquire their maintenance business back in 2014/2015, but I also launched our own finance company when money was not freely available in the lending market for small ticket items in 2008/9. “We decided we would make it easy for anyone to buy from us, which doesn’t require as much finance as you might think because when a finance company offers financing products it is financing the equipment, the profit, everything, whereas if you’re delivering the product, you are really only financing the hard costs of the equipment, not the soft costs of engineering, nor the profit. In a way it’s far easier to do that than sell pure finance. It’s not an enormous company but it gave us the means to sell more products at a time when it was difficult to sell hardware equipment.” Monthly billing Coinciding with the launch of Network Finance in 2008/9, Powling took the decision to move to a monthly billing model for everything, including services and hardware, which NCG prefers to supply on a rental basis. “We took a big cash flow hit for the first year, but we decided as a company that that was a long-term strategy we should adopt, as it suited the IT managed services style model and the network services model. And if we could monetise the hardware element by giving it a rental that’s what we did, underwriting it ourselves or through a third party finance company. That has been our model ever since. Celebrating its 35th anniversary this year, Network Communications Group (NCG) has prospered since 1987 by reacting to changing customer needs and expanding its product portfolio with new technology and service offerings delivered via four subsidiary companies: Network Finance, Network Business Call, Network Voice & Data and TECTA Systems. The Enfield-based business started out as a provider of on-premises communications equipment and maintenance, before expanding into finance and leasing, mobile communications, unified communications, cloud communications, network services & connectivity, CCTV and access control. Last September, it added a dedicated IT division with the acquisition of Greenwich-based Wavehill, bringing Group revenues to a substantial milestone turnover target and fulfilling a long-held ambition of CEO Graham Powling’s to round out NCG’s offering with a full range of IT services, including consultancy, cyber security and IT support. “We realised that integration of voice and data was inevitable – it was only a matter of timing. That was a part of the Still growing after 35 years Graham Powling