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BCN Group, the digital transformation and IT managed services specialist, has today announced the acquisition of NewCMI, a leading MSP and Microsoft Solutions partner.  This strategic move from BCN reinforces its Microsoft-first approach, building a complementary technology offering across the Microsoft ecosystem. The acquisition also brings a strategic foothold in the South East of England and Northern Ireland for BCN.

BCN is a leading digital transformation solutions and managed service provider delivering cloud-first data strategies, including Microsoft Modern Workplace, Microsoft Azure, Azure optimisation and analytics, Full Stack development, PowerPlatform, BI Data Analytics Solutions, Dynamics 365 Business Central, and cyber security services.

Founded in 2009, CMI is a leading MSP with offices in London, Belfast and the Thames Valley. Offering a complementary product set to BCN as specialists in Microsoft Modern Workplace, Microsoft Azure, cyber security and managed IT, the acquisition will bolster BCN’s portfolio and expand its UK base, which currently sits at 1,200.

This is the second acquisition since we invested in BCN in 2022, following on from the purchase of Microsoft Dynamics 365 specialists, Evo-soft, in September 2022.

BCN Group, the Manchester based IT cloud and managed services specialist, is delighted to announce the strategic acquisition of Evo-soft, a leading Microsoft Dynamics 365 Business Central specialist. The acquisition follows our investment earlier this year.

BCN is a leading digital transformation solutions and managed service provider delivering cloud first data strategies. This includes Microsoft Modern Workplace, Microsoft Azure, analytics, development, and IT security services to the mid-market and public sector organisations. The acquisition of Evo-soft provides BCN with an exceptional platform to provide solution driven services for businesses across the UK. The move enhances the group’s focus on and capability of delivering services and solutions from the Microsoft ecosystem.

Founded in 2001, Evo-soft is a UK top 5 Microsoft Gold Enterprise Resource Planning (ERP) Partner. The solution focuses on implementing, supporting, enhancing, and accelerating the use of Microsoft Dynamics 365 Business Central for customers that want to build on process efficiencies, integrate their business solutions, automate manual processing of data, and gain operational control.

Evo-soft have developed their own bespoke software called Evo-supply for the importation, distribution, and simple manufacturing industries. The flexible distribution management software has been designed by Microsoft Dynamics developers with years of industry experience and is continually refined, ensuring new and improved features are available.

In addition, Evo-soft has created specialist software for auction houses, aptly named Evo-Auction, a seamless and cost effective, front and back-end content management integration tool. The software reduces errors, speeds up processes and provides full reporting of live auctions with full integration.

We're delighted to announce our investment in BCN Group, one of the largest and fastest-growing independent Managed Service Providers in the north of England. The investment represents a full realisation for Beech Tree Private Equity which invested in BCN Group in 2018. 

BCN Group is a Microsoft Direct Tier 1 CSP and Gold Partner with bases in Manchester, Leeds, Runcorn and Bradford. It supports over 1,000 clients to deliver and manage business-critical technology solutions to over 30,000 users, with a customer retention rate of 98% and an industry-leading client satisfaction score of 89%.

BCN Group has completed five strategic acquisitions since 2018, significantly expanding its capabilities and customer reach, and our investment will provide capital to continue this buy-and-build strategy going forwards.  

How we’re helping

BCN is a UK-focussed IT managed and cloud services provider. It supports over 1,000 clients to deliver and manage business-critical technology solutions to over 30,000 users, with a customer retention rate of 98% and an industry-leading client satisfaction score of 89%.

BCN had completed five strategic acquisitions prior to ECI's investment, significantly expanding its capabilities and customer reach. Our team are proactively supporting BCN to continue this buy-and-build strategy, with the acquisitions of Evo-Soft and NewCMI since investment.

Following a milestone 2023 with several successful exits plus the final close of its largest ever fund, ECI 12, ECI has kicked off the new year with the promotion of two Investment Directors to Partner.

Daniel Bailey has been promoted to Partner. Daniel joined ECI in 2018 and his promotion reflects the exceptional contribution he’s made at ECI, including co-leading the recent investment in ISMS.online. Daniel has also led 12 acquisitions across our portfolio companies, including the strategic acquisition of Sipcom, by Content+Cloud which contributed to ECI’s 4.0x return. He has also worked closely with BCN, Peoplesafe and CSL.

Rich Pearce has also been promoted to Partner. Since joining ECI’s Commercial Team in 2019, Rich has been instrumental in several recent investments including Ciphr, BCN Group, and most recently Commify. Rich was also the Commercial Team lead on four successful exits including MiQ in 2022 which generated a 6.1x return and Tusker in 2023, generating a 6.2x return. He has also been instrumental in developing our People & Culture strategy and the resulting People Toolkit, a repository of tools and case studies that portfolio companies can use to create great places to work.

In addition to the new Partners, we’re also thrilled to announce Jin Ni Ooi’s promotion to Investment Manager. Jin’s promotion recognises her outstanding work in the Investment Team and her exceptional support on the exit of 4Ways, a leading UK and European tele-diagnostic company, which resulted in a 2.7x return in 2023.

With UK employment falling to its lowest level since 1974, ECI brought together its People leaders for an ECI Unlocked event to discuss the difficulty in finding new candidates, and why it massively increases the importance of an effective attraction and retention strategy.

Why is hiring people so difficult at the moment?

There have been several long-term pandemic impacts causing people to leave the job market. A significant proportion is the number of people no longer looking for work due to long-term sickness. Half a million workers over 50 years also took themselves out of the labour market during the pandemic, and the pandemic baby boom has also seen a concentration of parents reducing their hours, with 28.5% of mothers and 4.5% of fathers with a child under 14 reducing their working hours. Youth employment remains at >10% with 900,000 young people opting to stay in education due to low job prospects during the pandemic. These various impacts were compounded by Brexit, which saw 1.3m non-UK citizens leave the workforce since 2019.

It might have been expected that UK unemployment would have been impacted by the cost-of-living crisis, but so far this isn’t what we’re seeing. There are still fewer unemployed people than job vacancies. This puts a greater imperative on keeping the people you have, and upskilling them, as the process of hiring replacements has become too cumbersome and expensive. So how do you do that?

1. Flexibility is key

There is little doubt that if you want to retain staff, particularly younger workers, you need to offer hybrid flexibility. The next generation wants to have the social aspect of the office, but also be trusted to get on with it at home where possible. While managing hybrid working can raise challenges, it also presents a new hiring opportunity. Many over 50s have left the job market and more parents are looking for part-time roles. At the moment well-paid part-time skilled roles are hard to come by, so there is an opportunity for companies to tap into this economically inactive labour force. Another opportunity flagged by Rob Blythe, Founder of Instant Impact, the in-house recruitment experts, is the globalisation of hiring. 60% of the companies they’re working with are looking further afield than just the UK for hiring.

So, flexibility brings opportunities, but it needs investment to make it work. Sarah Willett, CPO at The Very Group, outlined that hybrid is only successful if there are strong people managers. People need clear objectives, personal development plans and coaching. Managers may need training in how to do this remotely. Similarly, it’s important to be flexible, but managers may also need training to be able to say no to unreasonable demands. Many may have found that the concessions given away during COVID-19 have now become unworkable, and if they now need to be rowed back, it will need to be done very carefully to not impact attraction and retention.

2. You can’t mobilise talent without a strong EVP

A sense of belonging and purpose is important to people, and it is increasingly a key differentiator for whether they stay or look elsewhere. In particular, we’re seeing more employees demanding that ESG gets put into practice. They want to understand where their employer is on the ESG journey, it to feel tangible with clear metrics, and ideally see a clear roadmap ahead. One People Leader highlighted how one of their Analysts pushed for change that was then rolled out across the firm, and as well as the immediate positive engagement, it was a powerful case study when talking to potential hires about the impact they could have.

Communication and celebration are also key. Bionic stressed the importance of an internal comms plan, and about listening not just talking. Celebrations included end-of-year thank yous, with each business area doing a wrap at the year-end, not just about business goals but also about the personal goals their team had achieved. Creating moments elicit a strong emotional response and they are remembered by teams.

3. Development and progression

Employees are keen for development and progression paths, and it allows firms to upskill people into roles rather than having to hire in a difficult market. Linda Jodrell, Chief People Officer at Citation, stressed the importance of discussing potential, clear development goals with a long-term view, and highlighted the benefit of having a growth-focussed PE backer to bring this to life. Linda pointed out that the average tenure for younger generations is significantly lower than previous generations, and therefore you need to make sure you are giving people a reason to stay, as they won’t due to loyalty or stability. One way they have done this at Citation is they have widened schemes around HR & Employment Law Academy and H&S Development programme, to attract and develop early careers and enable internal progression.

BCN discussed the role of its Academy apprenticeship scheme. Not only is it hugely attractive to those joining, but it also opens up training and learning opportunities to existing teams and enables promotion from within which is easier and more cost-effective than going out to hire. It also means people can move over into different tech skills as they progress during their careers. As well as helping to equip people with the right training to succeed, an additional benefit has been that people enjoy teaching others, and it gives them more purpose in their own careers.

4. Third-party recruitment models

If trying to access hard-to-reach talent pools with limited internal resources and budgets, third-party support can be a great way to achieve that. There are several models including Recruitment Process Outsourcing such as Instant Impact, which outsources your hiring team but still embeds them within your business, or Hire-Train-Deploy such as Grayce or Sigma Labs, as well as your traditional recruiters. These models give flexibility so you don’t have a bottleneck during a sudden spike in demand, and help you look more broadly at the market which can be helpful in areas like tech if you don’t have deep pockets.

Often you may need to find good people and train them in the relevant skillsets – tech skills can after all be taught in a way that EQ can’t be – but may not have the capacity. Third parties can again help here, in particular solving the issue impacting the under-25 market at the moment which is that everyone is looking for existing skillsets and experience.

While using third-party models can be a quick solution, you need to ensure that you have solid metrics to assess them, around not just the quality of hire, but also around delivering cost reduction for your team.

5. Pay and benefits

With inflation still in the news, the team discussed some solutions they had used to help protect staff. These included cost-of-living one-off payments, bringing forward annual pay increases for lowest earners, more frequent pay reviews during the year, pay flexibility around not only paying in arrears once a month, and placing an emphasis on market-based rather than inflationary linked pay reviews. While many leveraged solutions such as these during the last 12 months, we are now going into winter with its high associated costs plus the mortgage time-bomb, which means this is clearly an ongoing issue.

Worth also considering benefits alongside pay, as companies need to do the over-and-above salary stuff to attract candidates and keep them happy. There are benefits benchmarking providers to help check you are in line with the market, and a wealth of innovative benefits providers which can make a big impact on staff wellbeing and their impression of the perks of the job.

At our last People Forum the war for talent and hiring challenges were front of mind. We look forward to our next People Forum where we are discussing the realities of making hybrid working work, the role of AI in HR, and how to effectively report on HR success.

We're over the moon to announce that ECI have been recognised in three shortlists at the GP Bullhound 2023 Investor Allstars awards, or 'The Oscars of the tech world'. Investor Allstars recognises and celebrates the successes and achievements within Europe’s technology universe, drawing attention to those who are shaping the industry's future and creating the global winners of tomorrow.

ECI has been nominated as the Growth & Buyout Fund of the Year, following an exceptional 12 months which saw ECI realise 7 investments during the judging period, generating gross returns of 4.5x gross MOIC, as well as completing one new investment and 11 portfolio acquisitions.

One exit, the realisation of Tusker, was also shortlisted in the Exit of the Year category. The sale of Tusker, a market-leading UK-based vehicle management and leasing company to Lloyds Banking Group for a value of c.£300m generated a return of 6.2x gross MOIC.

Tom Wrenn, Managing Partner at ECI, has also been shortlisted as Investor of the Year, acknowledging Tom's leadership in ECI's investment in BCN Group, and the exit of MiQ generating a 6.1x return.

See the full shortlist here. 

As part of our ECI Unlocked programme we recently welcomed tech leaders from across our portfolio and network to discuss some of the challenges and opportunities facing CTOs today.

We were joined by Mark Rotheram, CTO at BCN, to discuss something front of mind for lots of tech teams. In today’s inflationary market, how can teams manage tech costs, with the challenge of balancing innovation and cost? Not only is there the cost of maintaining existing systems, the complexity of multiple licenses, but companies are also facing growing cyber threats, and don’t want to be left behind on innovation.

Businesses like BCN, a provider of flexible managed IT services, can help. Here are Mark’s top tips for staying on top of tech costs:

1. Have a solid tech roadmap

If you have a good tech roadmap as your foundation, it should provide clarity to the strategy and costs of the year. This helps to make sure everyone understands where the business is investing, and what will happen if that investment doesn’t happen.

That doesn’t mean that tech roadmaps need to outline everything you want to happen. It is about having a solid process that considers both risks and costs. It should be agile as you go through the year, but the roadmap should have board approval so everyone has visibility as to what needs to happen and can refer back to it as things change.

2. Negotiation

Tech contracts should be negotiated, and where possible volume discounts utilised. It is the benefit of using a partner like BCN, who not only understand how the price compares, but importantly understand the level of service you are getting, so that you haven’t negotiated a cheaper rate at the expense of requirements. Negotiation is an art, and it’s crucial to understand where you’re losing and gaining.

3. Open-source code

Open-source code provides a fantastic opportunity to save costs in your business. It is free and flexible so worth exploring.

One caveat here is that what is free now doesn’t always stay free, so there is a risk to take into account around future uptick in costs.

4. Automation

While automation is much easier to say than to do, there is still a lot of automation opportunity that is being underutilised. If done right it can reduce costs, particularly around maintenance.

One of the keys to getting it right is progressing slowly. This also means not trying to reduce team need too quickly. Instead gradually reduce team commitment as automation starts to take on some of the lower value tasks.

Microsoft in particular has lots of capabilities around automation that are not fully exploited. A partner can help to understand potential scope and determine whether processes could use a low-code/no-code solution.

Teams may have been burnt by seeing automation go wrong, which is why it’s important to set ground rules. At the start the strategy should be absolutely clear and any ancillary impacts considered.

5. Optimisation

It’s important to be very rigorous on costs, which means first reviewing the technology you have and deciding if you still need it. Go back to your roadmap and assess your existing tech stack against it. Do you still need everything you have? Some tech can be retired, but it often becomes BAU if it’s not being looked at properly.

Similarly, lots of companies are often overspecced for their needs. That may be using products that aren’t fully utilised, or with excess licenses hanging around. Check licenses against usage, in particular if they are being used by third parties.

Another way to optimise is that often vendors have consolidated since your initial purchase, and that means so can your licenses.

BCN have helped many companies move to the cloud, and the real value is about how to deliver more efficient business processes and ensure tech is delivering value. There are some areas where it is important not to try and skim the fat too much – cyber being one of them, as short-term savings may lead to long term costs both financially and in reputation. If you have your tech maintenance well managed and cost-effective, it allows you to invest in innovation, confident that you are adding value. Get in touch with one of the BCN team here if you’d like to find out more.