Financing for the future of business
Take a deep dive into the future of financing
with Wayne Peters, TD SYNNEX VP, Global Financial Solutions
Financing plays a crucial role in addressing business concerns around capital budgets, particularly when it comes to executing IT projects. These concerns may include the preservation of capital, improving cashflow, budget flexibility, faster project implementation, technology upgrades, scalability, tax benefits, and asset management and disposal.
By leveraging creative leasing and financing solutions, businesses can address capital budget concerns and strengthen their balance sheet. Financing provides the ability to execute IT projects without comprising stability, enabling businesses to leverage technology for growth, efficiency, and innovation.
How priorities have changed toward IT investment and expenditure
Shifts in financial demands and priorities reflect the changing landscape of technology and the evolving needs of organisations. There’s a current emphasis on digital transformation, subscription-as-a-service models, cloud computing, cybersecurity investments, data analytics and business intelligence, sustainability, and IT skills development.
By adapting financial strategies, businesses can align IT investments with emerging trends to drive innovation, efficiency, and competitiveness.
Key factors driving alternative IT financing models
Ownership mentality is changing. Allocating expenses to usage has more focus these days, right down to per user, per CPU, and/or per TB. There are many factors driving organisations to explore alternative financing models for their IT needs, including:
- Cost management.
- Technology advancements.
- Scalability.
- Risk mitigation.
- Cash flow preservation.
- More effective budgeting and planning.
- Potential tax and accounting advantages.
- Asset management.
These factors contribute to better financial management, agility, and competitive advantage.
Shifting from CapEx to OpEx for IT investment
Cloud-based services offer pay-as-you-go and subscription-based pricing structures to allow companies to treat them as operational expenses.
There are several financing options for cloud-based solutions. The main ones are pay-as-you-go, subscription-based plans, consumption models, and leasing. We have seen a significant increase in MSP’s wanting to utilise financial solutions as an effective way to acquire assets needed to deliver services and/or solutions. This also allows for assets to be stored on-prem, off-prem, or in co-lo facilities.
Payment solutions and TaaS options from TD SYNNEX Capital
Our solutions benefit customers and channel partners through increased credit capacity, asset management, and establishing a predictable refresh cycle. Benefits specific to customers, include:
- Improved cash flow management.
- Increased credit capacity.
- Ability to entertain an effective asset management strategy.
- Predictable refresh cycles.
- Flexible financing options to allow financing terms to align with the expected life and value of the assets they are financing.
The benefits specific to channel partners can include developing better sales opportunities, creating long-term relationships with customers, streamlined sales processes, accelerated revenue and profitability growth, improved working capital, and developing upselling/cross- selling opportunities.
The future of IT financing
The market has been moving where financing has been for years. How customers want to utilise IT equipment and recognise the expense of that use, can be solved with an effective financial solutions strategy that considers subscription-based models, and more personalised (or custom) financing models that adapt to the solution being financed through a more integrated approach.
From a technology standpoint, I see financing companies engaging with more efficient tools, such as Blockchain and AI, to make decisions and deliver financing solutions. I also see financial solutions becoming more integrated through API’s in procurement systems.
As an example, TDSC utilises electronic documents to speed up the signature process, and we own our own platform to automate and integrate small ticket financing into ecommerce and vendor websites. Regardless, the goal will always be to find a way to seamlessly integrate financial solutions into the selling processes, to provide ease of use and an improved customer experience.
