Using Flexible Financing for Large Big Data Projects
Large IT and Big Data projects can be extremely complex with a lot of moving parts that must be managed and integrated. These projects involve hardware and software components along with the associated implementation consulting services, and when thoughtfully implemented can provide strategic and competitive advantage. Flexible financing can reduce the financial risk component making it easier for the department to get approval from the CFO or other funding decision-makers.
IBM Global Financing can assist its customers with both large and small IT initiatives by providing flexible financing options for the hardware, software, and services required. IGF is the single largest captive leasing company in the IT industry and works closely with customers to accelerate their businesses by funding innovative projects. As a unit of IBM Credit LLC, a wholly owned subsidiary, IGF has the financial strength and backing of IBM. IGF has access to a vast array of technical talent to support a variety of IT initiatives that customers need to keep pace in today’s challenging business environment. Companies and organizations constantly need to innovate and IGF can provide a variety of funding options they need to stay competitive.
One of the challenges in any marketing organization, especially in IT, is keeping up not only with changes in technology but also understanding how consumers expect to engage with vendors. To adapt to this IGF has gone through a paradigm shift over the past few years. Consumers now expect instant information access when exploring potential technologies indicating that the marketing relationship has really evolved as people no longer rely on face-to-face relationships for buying and selling, but are more willing to spend time doing their own research. It is apparent that today’s consumers come to the buying process much more educated on what potential solutions are available to solve their problems.
To support this IGF has expanded its online presence and marketing reach to more thoroughly educate business partners, customers, and other parts of IBM on the services that IGF can provide, and how the cradle-to-grave process of managing IT assets can reduce time to implement solutions and enhance ROI. Many customers only look at price. They need to examine the entire IT asset value chain to assess the overall total cost of ownership. IGF can help these customers see the ‘big picture’ when going through the buying process.
A recent IBM Institute for Business Value (IBV) study shows that many organizations realize that for large scale IT initiatives, especially Big Data Analytics, they need to spend more on infrastructure because their current environments cannot support these projects. These types of projects can be resource intensive and require significant investments in both hardware and software. This makes the need to review all financing options paramount for making the right decisions for the enterprise. This means customers must consider early on in the overall IT procurement conversation how their projects will be financed..
Many organizations overlook the tangible value that incorporating creative financing into their IT procurement process can bring to the table. A recent IDC survey on financing noted that 68% of IT buyers said that the availability of creative financing options had a direct impact on the purchasing decision. Flexible financing can have a huge influence on a company’s available capital and overall cash flow. Because of this, many more CFOs and COOs are involved in the evaluation and procurement process for large scale IT initiatives. How these projects are financed can directly impact a company’s balance sheet and, when used correctly, financing can free up capital for other critical investments.
There are many ways that IBM Global Finance can enhance value throughout the entire asset life cycle with flexible financing options playing a major role. IGF can help customers with a number of creative financing approaches including 0% financing options to reduce overall capital costs, payment deferrals for cash flow, and various leasing options to reduce upfront cash needs to acquire tangible assets.
For example, a customer needs to start a project before the end of their fiscal year but budgets are tight and management is slowing purchases to achieve their financial objectives. IGF can provide deferred financing so that a project can get underway sooner rather than having to wait for funds to become available in the new fiscal year. IGF has worked with customers that have significant budget constraints. Leasing can really help customers get projects underway while conserving existing funds. Using leasing as an option reduces the amount of cash required to get a project off of the drawing board and into reality.
Some customers have their own cash or lines of credit and may prefer internal financing. But even internal funding has an associated cost and that cash might be better used elsewhere. IGF can offer zero percent financing depending on the project scope. This can free up cash for more critical uses. IGF offers customers the ability to get the financing necessary to get the projects they need underway and producing value to the organization.”
IGF has also implemented solutions for smaller purchases. Credit approvals for as little as $5,000 can be made in minutes and contracts have been simplified and restructured to be as little as two pages. This helps their business partners in their sales process by providing support for smaller customers immediately and in the future as they grow. IGF can also provide financing for purchases from vendors other than IBM giving our customers even greater flexibility in the technology buying process”.
Asset management is an area where IGF can provide substantial value to its customers by enabling them to manage technology acquisition as part of an overall life cycle process. It is not just about procurement but also maintenance, upgrades, retirement and disposal or repurposing. Many CIO’s do not adequately take into account the costs associated with managing end-of-life for hard IT assets. Decommissioning existing systems is an involved process that many CIO’s treat as an afterthought, but can be a major cost component of the overall cost of ownership.
IBM can help customers with the complete planning process for large scale projects, the acquisition and financing, installation, maintenance, upgrades, retirement/replacement, and disposal either through reselling or recycling. IBM has a worldwide organization equipped to refurbish used equipment or to properly dispose of retired hardware in an ecologically, secure and legally proper manner.
Thorough analysis of capital sources and costs should be done when undertaking large capital intensive projects. Flexible financing should be critical piece of the IT asset procurement process. IGF can accelerate business value by funding innovation with solutions that allow companies to more quickly implement large scale technology and big data solutions.