There is a growing trend towards consumption-based business models such as leasing or subscription services. Attitudes and behaviours surrounding renting, borrowing, and leasing items versus ownership, are shifting. Services such as Airbnb, Uber and other carpooling programs are testament to these new behaviours.
In today’s increasingly fast paced world, there is a rising need to be agile and cut down on maintenance and storage costs. It makes sense to only pay for the capacity that you are going to use, in a flexible and scalable manner, with the freedom to adjust your expectations on demand.
Consumption based business models offer products and services based on usage and are a great way to access equipment or services as and when required, without the commitment of capex expenditure or fixed, long term contracts.
The case for transformation
Historically businesses have opted to purchase technology even though this commodity rapidly depreciates and will have little or no resale value after use.
The exponential rate at which technology is advancing, is driving a demand for the adoption of consumption-based offerings. According to Gary Audin, President of Delphi Inc, products go through a rapid life cycle that seems to get shorter every day. The time it takes for storage systems to fall to half its original value is about 15 months, and for servers about 36 months. This phenomenon continues at a rapidly increased rate.
New products eclipse current models every two to three years. Organisations need to consider faster replacement cycles. Another point for consideration is that ageing technology is not as energy efficient as new technology and cost more to operate.
It makes no sense to invest in traditional ownership models when the convenience of leasing technology allows businesses to ride the crest of technology advances and access more energy efficient devices. The resultant greener IT environment yields additional value towards a more sustainable future
Choosing the right leasing company
To take full advantage of these benefits, it is important to choose the right leasing provider. The right leasing partner will offer you an end to end solution that minimises third party involvement. A partner that helps to save money both up front and over the lifecycle of the equipment, without compromising on the integrity of the technology. A partner who has the capabilities to keep you using the right technology while having the infrastructure to reuse and recycle your old, dormant technology.
There are several important factors to consider when choosing a leasing partner:
- Read the fine print: Make sure to look out for hidden costs, such as swap out or refresh penalties. Evaluate the end of lease process to make sure one does not fall victim to forced lease extensions and look out for limitations on which products and brands can be leased.
- Ensure the service provider has an up-to-date asset management tool: It is essential to manage IT equipment throughout the life of the asset, to avoid incurring additional costs when assets need to be returned at the end of the lease. Staying in control of leased asset information is crucial.
- Ensure that assets are insured by a reputable party: Insuring company equipment and protecting company assets applies when leasing equipment. It is important to clarify who will be insuring the assets.
- Consider refresh and disposal implications: When leasing, be clear on whether the provider includes disposal or logistical services. When the lease contract comes to an end make sure it’s understood who pays and takes on this responsibility.
- What happens to your expired estate: A leasing partner must not only have the means to environmentally dispose, reduce and recycle your used technology, but also the means of providing an auditable data destruction process to ensure military grade data wipes.
InnoVent’s IT leasing solutions
InnoVent, a specialised IT leasing company whose been in business for almost 15 years, is transforming the leasing industry as you know it. InnoVent has come up with a solution for each stage of an asset’s lifecycle from procurement, to the eventual disposal of those assets.
- Procurement: Unlike conventional financing, InnoVent offers numerous solutions to reducing the cost of your hardware. This means an organisation only pays for the equipment for the duration that its used. In doing this, overall costs reduce significantly, resulting in a lower cost of finance that compare favourably to traditional forms of finance.
- Asset Management: During the leasing contract, InnoVent offers asset management solutions made up of asset tracking, dedicated asset managers, online contract information, comprehensive insurance & extended warranties, to help an organisation manage their leased equipment for as long as they require the use thereof.
- Asset Refresh & Disposal: InnoVent’s reverse logistics process eliminates the hassles of storing and disposing obsolete assets, and when it’s time to refresh with new equipment, InnoVent will assist with the planned upgrade. The obsolete equipment undergoes a thorough data destruction process and the remaining hardware is recycled into various forms contributing towards a greener, sustainable technology environment.
For more information, visit the InnoVent website.
This article was published in partnership with InnoVent.