Why an SME Should Lease Enterprise Mobility Solutions
In most cases when companies undertake an Enterprise Mobility project they are looking to improve the productivity of mobile workers who are located away from a traditional desk based IT environment.
They soon realise that to make the deployment a success they need to synchronize a number of key moving parts including app design database hosting training hardware device provision and management. In terms of financing many have realised that the secret sauce is actually the utilisation of the system rather than actually owning it. This has been the case for many years for large companies who have always known the importance of leasing.
We talk to many SME’s who are competing with large competitors. They see mobile technology as a way of demonstrating process excellence to their customers. Whilst at the same time enjoying improvements in their own effectiveness and efficiently.
For SME’s undertaking an enterprise mobility project leasing provides them with a way to invest in a high return solution without having to blow up a huge part of their annual IT budget. In many cases the primary reason a project is parked is that whilst an ROI may be compelling an organisation may simply not have the free cash to make a one off purchase in an area they may not be familiar with. Adding another vehicle or employee can often seem a simpler option.
What Sort of Lease?
There are various type of lease but the most common in this scenario is an Operating Lease. In this scenario the customer only buys the right to the property for a specific period of time. At the end they can return the property or pay a nominal sum to acquire title.
The changing pace of technology along with inevitable revision of operating practices has led many to use an operating lease as a way to bundle all the elements into a single off balance sheet transaction that is treated as an expense not company capital. This can dovetail very well with the 24-36 month technology horizon that has become the norm in the minds of many buyers.
8 Leasing Advantages for an SME
- Gives the SME position power of a cash buyer.
- Allows for the payment of a capital purchase with low monthly rentals – budget and manage cash flow.
- Manage obsolescence with technology upgrades – without writing off large single sums.
- Invest money in other areas – more return on capital.
- Bridge the gap between what you need and what you can afford.
- Fully allowable against taxable income.
- Spread costs and save on tax. Payments are treated as operating expense so are tax deductible.
At the end of an operating lease the client can
- Add further capability to the system refresh and re-new.
- Send the assets back.
It is not uncommon for an Enterprise Mobility project to have a positive financial impact on a business function within 9 to 12 months. It is our firm belief that after the 36 months of a typical lease the solution will have proven it’s worth beyond the value of the rentals paid.