Most UK businesses have had a rough ride over the past 12 months but with a record year under his belt Agilitas IT Solutions CEO Shaun Lynn has spotlighted big demand for Inventory-as-a-Service and end-to-end outsource solutions.
From top to bottom the UK channel is coming under greater examination as sustainability and Covid-19 determining factors continue to hold sway. This has clearly affected the calibre of many VARs to effectively tackle new demands as revised business models and environmental priorities come to prominence. Yet business leaders like to keep things simple, so no wonder Agilitas notched up a record year in 2020. That’s not all: Every component is there to ensure Lynn achieves his three year plan to hit £50 million revenues following a transformational SBO last November.
The secondary buyout was supported by Perwyn which provides firepower to accelerate the outsources that Agilitas can complete for partners, as well as opening up M&A opportunities. “Completing a secondary buyout that provided an 8.5 times money return to our investors during a global pandemic highlights the resilience and relevance of the business,” stated Lynn. “All of that needs great people to be able to pull off, but more than that to keep a smile on your face and enjoy going to work.”
Originally servicing the IT channel (Cisco is now Agilitas’s number one supported estate) Agilitas has since expanded its proposition to adjacent markets including telco. “We are seeing a huge appetite for our Inventory-as-a-Service proposition with the likes of Maintel, Telent, Daisy and Allvotec leveraging our service,” stated Lynn. “Logistics and inventory management is in Agilitas’ DNA and for that reason it makes no difference to us if we were managing IT, voice or washing machine parts as the same outcome is required – ensuring the part in question is consistently delivered to the expected SLA.”
Strong pedigree
Agilitas started life in July 1990 as CPI (Computer Parts International) which was largely an IBM midrange broker. Acal invested in the early 2000s with a view to create a services business that would provide parts availability (largely reactive sales) for the IT marketplace based on CPI’s experience of distribution and specialist manufacturing. Lynn first became exposed to the IT sector when he undertook the IBM graduate scheme. So it is fitting that he joined IBM specialist CPI in 2010 following a strategic review aimed at relaunching the business as a channel-only services provider selling annuity support contracts. Fast forward to 2014 and an MBO was completed which allowed the firm to focus on investing for growth rather than being a non-strategic division of a large plc.
Agilitas now supports over 500 customers ranging from OEMs, system integrators, VARs, distributors, service providers, telco and owner managed businesses. The current headcount stands at 140 with approximately 45 new hires since July 2020. Lynn expects to add 20 more by mid-2021 with job opportunities created via organic growth, building on the £90 million worth of total contract value secured in 2020. Lynn hopes to continue organically growing the business at 25-30 per cent year-on-year.
In its last financial year to March 2020 Agilitas registered £14 million revenue and £4 million EBITDA. For March 2021 Lynn is forecasting over £20 million revenue and £8 million EBITDA – and targeting £30 million-plus revenue for March 2022 based on a contracted order book with between £11 million and 12 million-plus EBITDA. “Our three year plan is to organically grow from £20 million services revenue to £50 million, and to further establish the business internationally with the potential for bolt-on acquisitions to turbo charge our journey,” stated Lynn.
Completing a secondary buyout that provided an 8.5 times money return to our investors during a global pandemic highlights the resilience and relevance of the business
Currently, 80 per cent of Agilitas’s business originates from the UK market with the remaining 20 per cent apportioned to Europe and the rest of the world. To facilitate its expansion plans Agilitas is increasing the levels of automation between its systems and those of customers. “This has enabled us to process many more service requests and deliver hyper-scale projects,” he added. “Therefore making software-enabled Agilitas much more intrinsic to our customers’ business. Furthermore, our vendor agnostic approach enables us to deliver ‘as-a-solution’ service wraps that are focused purely on a business outcome, whether that is expanding geographic reach, enhancing service performance, reducing operational overhead or increasing the service portfolio.”
Agilitas’s growth areas include geographical expansion, developing more service offerings and investing in emerging technology areas such as security and IoT. “We are continuously monitoring new technology areas to onboard,” added Lynn. “In 2020 we added six new service propositions including Voice, EPOS and Workspace hardware support. In 2021 we have plans to increase this number to provide our channel partners with an end-to-end service. This now includes our latest support proposition around Apple hardware. We are also seeing traction for providing a service bundle of OEM/vendor software support coupled with our hardware support over a multi-year basis. This is essentially Agilitas investing in the upfront outlay and selling back to the partner on a monthly basis via subscription or leasing.”
According to Lynn the full effects of Covid-19 on organisations are yet to be felt, and he says a lack of long-term planning among business and Government leaders will be damaging. “Companies are too reliant on schemes such as furlough,” he explained. “Leaders are not looking at key data points and leading KPIs. Once public sector demand diminishes, once the private sector has resized post-furlough and new technology buying behaviours are more established, the bubble of ever increasing new product sales and increased minutes purchased will stop growing. Success will be far more service and solution centric, based on understanding peoples’ needs and behaviours.
“If Covid-19 and its aftermath teaches us anything it will be to genuinely put people at the heart of everything you do and why you do it, playing a much longer game, and building far stronger and better quality businesses that will be more attractive to our clients.”
It goes without saying that the pandemic has forced businesses to accelerate their digital transformation plans, meaning that channel firms have had to adapt and become more agile to remain relevant. This has had a significant impact on demand for Agilitas’s expertise. “Due to our scale and access to inventory we can reduce the overhead to channel partners in the provision of hardware spares while increasing service performance,” said Lynn.
“Clients have realised that supply chains are difficult to manage. If something is not the core skill of a business, meaning a sub-scale performance in those areas both commercially and operationally, why do it? It makes strategic sense to outsource to someone who can improve the service, provide additional options and drive value. We provide full outsource solutions that release channel partners from inventory spares ownership, enabling them to focus on the customer experience and first line services. Covid has accelerated the drive to outsource and leverage a more flexible service.”
This approach contrasts with an industry norm that is too transactional, believes Lynn. “Too many people push a product to make a sale that may or may not be right for the customer,” he added. “That is purely about hitting a monthly target at a fairly low margin to benefit a vendor that is totally removed. To survive and thrive many me-too VARs and SIs need to identify what they want to be famous for and become more collaborative with agile partners to deliver a differentiated service.”
I’ve never been a techie or into technology in any way. I’m a technophobe and proud of it
Becoming famous for championing the green agenda would be a wise option, believes Lynn, as sustainability trends become ever more entrenched. Government pressure is growing on technology hardware vendors to reduce their carbon footprint by extending the life of hardware refresh programmes, and this needs to be managed by businesses like Agilitas, says Lynn. “Agilitas extends the life of hardware with support options that include the maintenance, repair and training of legacy systems, so people understand how to keep the lights on,” he noted. “More importantly, we help channel firms to reduce our industry’s carbon footprint.”
Lynn’s formative years were spent in retail sales ranging from music and DVD, typewriters and palm pilots through to jewellery and watches. “My early experiences taught me that everyone is different and that each customer places a value on something slightly different to the next,” he said. “I’m a creative thinker and problem solver by nature and happiest challenging my customers on what’s working and what’s not working in their businesses, and their plans to do things differently. Building honest and open relationships is the secret to business. No one has all the ideas or answers, that gives us the impetus to make a difference.
“I’ve never been a techie or into technology in any way. I’m a technophobe and proud of it. It took me a long time to learn that the safest and most fun and engaging place within a business is with the customer. I always urge everyone in our team regardless of their role to spend more time with our customers as it’s where we learn the most and make the biggest difference.”
Just a minute with Shaun Lynn...
Role model:
My colleague Ricky Chadwick: He spent three months in hospital on a ventilator last year with Covid and has taken everything in his stride, demonstrating such a positive attitude and returning to normal life, inspiring us all.
What do you fear most?
Needles, snakes, spiders – and not being needed.
The biggest risk you have taken?
Joining what is now Agilitas to lead the turnaround in late 2010 and then MBO’ing the business.
Who do you admire most in the channel:
The best speaker I’ve seen is Vin Murria. The way she sees the world and puts people at the heart of it is thought provoking.
One example of something you have overcome:
I’m currently recovering from a major Achilles reconstruction operation.
Name three ideal dinner guests:
Tony Hancock for laughs, Winston Churchill for inspiration, and Simon Sinek who challenges you to see the world differently.
Industry bugbear:
To make the sector less product and more people centric.
Tell us something about yourself we don’t know:
My passion is Tony Hancock. I collect everything to do with his radio shows from the early 1950s and listen to them most days.
Your main strength and what could you work on?
I learn from my mistakes, share my experiences and surround myself with fantastic people, but I can sometimes be too impatient and take a view that the world should think like I do.
Top tip:
Find a balance between product sales and service. The most successful resellers are always one step ahead of the competition.