How financing can support the drive towards digital transformation and cloud services

As the investment in digital transformation grows, organisations migrate to cloud and the cyber threat landscape evolves, organisations are looking at how they finance and invest in their IT infrastructure. There are clear challenges: the impact of Brexit, declining IT hardware budgets and delayed investment in lifecycle refreshes beginning to hit home while the need for ever greater digital transformation and automation puts pressure on the IT team to deliver.

One option is external financing. The asset finance industry reported a record year in 2017 with almost £32 billion of funding required even through what remains a challenging economic climate. Of that total, £18.6 billion went to SMEs: a 12% rise from 2016, and of the total amount £2.285 billion was for  businesses IT requirements. This is also up 7% from 2016 (and it was 17% for hardware) – and the growth in services in 2018 is estimated to be 50%. In our personal lives we are seeing a shift towards “as a service” or “subscription” type models given that our lifestyles suits this fluid arrangements and Buying IT should be no different. Why should a business tie up capital when they can have a suitable payment structure in place for the planned IT requirement to match the term of the product?

The growth of the cloud means that the technology now maps to business processes. The operating expenditure of keeping a business going – rates, rent, utilities – now extends down the IT solution stack. Starting with the hardware people use (laptops, tablets), through connectivity (Wi-Fi, networking), applications (Office365, Salesforce) and all the supporting services (security, authentication, data protection, network optimisation, etc). The move to a monthly OpEx cost maps with the operating costs of running a business, provides greater agility for an organisation to map infrastructure to it’s soft human cost, and potentially makes it easier to look at great digital investments now they can be clearly defined and measured.

So, what does this mean for the channel?

This change in the IT landscape means for VARs there’s a significant opportunity to help their customers with the burden of phasing in new software, hardware and range of services – as well as increasing under pressure margins. The potential of financing is therefore great, but with a complex and volatile market, there’s a real challenge for VARs who lack the expertise to make the right choice of finance partner. For the channel, it’s also an opportunity to become even further embedded with their customers. Engaging with the CFO and finance team not only provides the opportunity for a proactive approach and the chance to build relationships throughout the organisation, it also helps to gain a better understanding of their approach to funding IT projects. Are they moving towards an OpEx model? Are budgets changing to allow for subscription and cloud services, in addition to capital investments? Are they looking to incorporate consultancy and support (such as managed services) into projects, and treat IT as a utility rather than annual expenditure? Are separate digital transformation funding pots available, to help IT enable and empower staff for flexible working and
cross-departmental collaboration?

To help address these challenges, e92plus have launched a new division: e92capital. It provides a full portfolio of financial solutions, with direct relationships with major funders but delivering the benefits of providing a single point of contact as part of the e92plus relationship. There’s every option from rental to leasing to short term funding to payment terms, all available for a bespoke solution package and with great margin opportunities – and it even enables the reseller to recognise the revenue immediately. It enables a fresh approach to finance, moving financing simply being a source of cash to help close last minute deals where budget slips away, to becoming a strategic tool that is part of an approach to deliver a complete solution that fits an organisation’s requirements from C level down.

For more information on e92capital, find out more at www.e92capital.com or contact your Account Manager today.