Middlesex Consulting Group

› Protecting Your Capital Equipment with a Service Contract

When you purchase any High Tech Capital Equipment, you generally receive a manufacturer's warranty. It usually lasts 12 month either from the date of shipment or, if there is installation involved, then from the date of acceptance. Some time before the warranty expiration, you probably will be asked to purchase a Service Contract (also called a Service Agreement or Service Plan). Sometimes the decision is easy; your company policy is to always buy the contract or, conversely, never buy a contract. In all other cases there is an economic decision to be made.

While many people are comfortable making these decisions others do not feel they fully understand all the issues. Middlesex Consulting Group helps you by providing the missing information by:

• Helping you clearly articulate your minimum support requirements (both tangible and intangible)
• Showing you how to perform the make vs. buy analysis
• Understanding the manufacturer's proposal
• Determining the real value of the proposed contract based on the benefits offered and the risk of downtime and large unbudgeted expenses among other areas
• Developing a strategy to determine if in future capital equipment acquisitions you can, if it makes sense, include the service contract along with the equipment purchase and take advantage of additional cost savings.

Since we work with numerous equipment manufacturers, we bring a unique insight into both sides of the analysis. A Service Contract can be very beneficial in the right situations but also can be a unnecessary expense for others.