Worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 5.5 per cent from 2021, according to the latest forecast by Gartner, Inc. In the same report, we see that global spending growth on devices reached a peak in 2021 (15.1 per cent) as remote work, telehealth, and remote learning took hold, but Gartner expects 2022 will still show an uptick in enterprises that upgrade devices or invest in multiple devices to thrive in a hybrid work setting.
Since the pandemic, CIOs have felt the pressure to deliver greater levels of efficiency. An increase in IT investment is a result of companies applying IT to solve problems across the business. However, the global chip shortage and subsequent high demand for devices such as laptops and tablets saw a sharp increase in PC prices. In response, leading organisations adopted transformational sourcing and procurement practices to drive savings, speed, and agility.
The quick adoption of cloud services and the growth of As-a-service Models have seen many businesses move towards flexible consumption models as part of their cash preservation strategies. Here the company only pays for what it uses, thereby freeing up capital for other investments.
Due to the speed at which technology is changing and the burden on companies to keep up with the competition, it is now imperative to implement flexible and agile strategies in key areas of the business that will allow companies to cost-effectively change on demand.
One of these key areas is in IT. IT-as-a-Service, Hardware-as-a-Service, Device-as-a-Service, and Software-as-a-Service show that there is a global movement in which many companies are choosing to pay for use rather than owning equipment.
When it comes to IT hardware, companies are also turning to leasing. Leasing uses a pay-per-use model where businesses pay for the use of the equipment during its determined useful life span, and they are free to return the equipment to the leasing company at the end of the contract.
Similar to as-a-Service, leasing IT equipment is affordable and provides immediate accessibility. Leasing gives the organisation the ability to maintain regular technology refresh cycles and manage cash flow with precision by using the funds originally allocated to hardware on other vital areas of the business such as innovation, marketing, and business expansions.
In the Kenyan market, however, some businesses still maintain the cultural mentality of ownership where cash and business loans are the primary means of acquiring equipment. They fail to see the advantages of leasing. Unlike CAPEX which is required upfront, or a traditional bank loan that includes interest payments, leasing requires little, if any money upfront, and with predictable payments, budgets are managed better, and the investment is spread over the leasing period.
This pay-per-use model offers full scalability, complete flexibility, better resource management, and more agility in a constantly changing business world. Leasing is now emerging as a method of acquisition for businesses looking for new ways to serve customers in a competitive market, with minimal pressure on a company’s financial operations.
With leading leasing partners, such as InnoVent, an IT leasing specialist who offers subsidised finance, the total cost of ownership can be reduced even further, allowing companies to conserve capital, preserve credit lines, and keep their equipment up to date.
InnoVent’s end-to-end solution will also see a company’s IT assets through their entire asset life cycle from procurement to maintaining the assets while they are in your environment to preparing them for second use and the eventual disposal of those assets.
Access to equipment vs. ownership promotes a sustainable business model that focuses on using equipment during its useful life and when that period is over, it can be returned and utilised again, promoting the circular economy.
For more information on leasing solutions, visit the InnoVent website.