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16
magazine
Many small and medium business (SMB)
organisations are already using financing in
their business, whether this is for company cars,
coffee and snack vending machines or office
printers, photocopiers and scanners. However,
information and communications technology
(ICT) financing and leasing has not had the
same success, even though it can help to iron
out peaks and troughs in ICT budgets and help
to create a better, longer-term ICT strategy that
is optimised to support a business.
New research from Quocirca sponsored by
BNP Paribas, a leading provider of leasing finance,
with102 SMBs in the UK, provides new insights into
views on various aspects of the use of financing
and leasing of ICT hardware and software and
comparisons with existing use for other areas such
as vehicles and office equipment.
For the research report titled ‘Using ICT
financing for strategic gain’, Quocirca asked
respondents their general views on financing and
leasing, and their thoughts about ICT financing
in particular. The results reveal that many SMBs
are unaware how ICT financing works, preferring
to spend cash on ICT purchases. The research also
revealed that few resellers include a finance option
during sales negotiations.
A key finding from the research include that the
majority of SMBs expect IT budgets to shrink this
year. More than 64 per cent of respondents expect
technology budgets to decrease in 2013, with a
further 21 per cent expecting them to stay level.
Through financing, this available budget can go
much further.
Acquisition costs are a key consideration for
SMBs in new IT projects. Over half of respondents
consider up-front costs to be of critical or high
concern in their procurement process. Through
financing there is no capital outlay, meaning this
concern is allayed immediately.
Many SMBs buy technology ad-hoc, mainly
online. 41per cent of respondents use value added
resellers (VARs) as their main channel for buying
ICT hardware and software. However, some 81per
cent use the internet as either their primary
or secondary means of procurement. Ad-hoc
purchasing could actually increase ICT costs in the
long term, where financing can help SMBs make
more cost-effective and strategic ICT investments.
Few SMBs use ICT financing, while fewer still
understand the benefits of it.While 76 per cent of
respondents currently use car financing, only 30
per cent are using financing for IT and telephony
equipment. Just 1per cent are using it for software
– with some 40 per cent never having considered
software financing at all. To compound this, more
than 50 per cent of respondents are unaware of
the benefits of IT finance in comparison to a cash
purchase or bank credit lines, while just fewer than
40 per cent believe financing is unnecessary as they
have enough cash already. This demonstrates that
much more must be done to help SMBs understand
the benefits of ICT financing, and how it allows
valuable cash reserves to be invested in supporting
core, strategic objectives.
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Financing ICT
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nancing ICT equipment for SMBs
any small and medium business (SMB) organisations are already using financing in their business,
ether this is for company cars, coffee and snack vending machines or office printers, photocopiers and
anners. However, information and communications technology (ICT) financing and leasing has not had
e same success, even though it can help to iron out p aks and troughs i ICT budgets and help to create
etter, longer-term ICT strategy that is optimis d to support usiness.
w research from Quocirca sponsored by BNP Paribas, a leading provider of leasing finance, with102
Bs in the UK, provides new insights into views on various aspects of the use of financing and leasing
ICT hardware and software and comparisons with existing use for other areas such as vehicles and
fice equipment.
r the research report titled ‘Using ICT fina c or strat gic gain’, Quocirca asked r spondents t eir
neral views on financing and leasing, and their thoughts about ICT financing in particular. The results
veal that many SMBs are unaware how ICT financing works, preferring to spend cash on ICT
rchases. The research also revealed that few resellers include a finance option during sales negotiations.
key finding from the research include that the majority of SMBs expect IT budgets to shrink this year.
ore than 64 per cent of respondents expect technology budgets to decrease in 2013, with a further 21
r cent expecting them to stay level. Through financing, this available budget can go much further.
pected 2013 ICT budgets
quisition costs are a key consideration for SMBs in new IT projects. Over half of respondents consider
-front costs to be of critical or high concern in their procurement process. Through financing there is no
pital outlay, meaning this concern is allayed immediately.
any SMBs buy technology ad-hoc, mainly online. 41per cent of respondents use value added resellers
ARs) as their main channel for buying ICT hardware and software. However, some 81per cent use the
0%
5%
10%
15%
20%
25%
30%
35%
40%
Increase by more than 10%
Increase by 5-10%
Increase by between 1 and 5%
Roughly stay the same
Decrease by between 1 and 5%
Decrease by between 5-10%
Decrease by >10%
benefits of IT finance in comparison to a cash purchase or bank credit lines, while just fewe
cent believe financing is unnecessary as they have enough cash already. This demonstrates
more must be done to help SMBs understand the benefits of ICT financing, and how it allo
cash reserves to be invested in supporting core, strategic objectives.
Current use of financing
Many ICT vendors hardly mention financing when discussing deals – if at all. The option t
deal is brought up regularly in around 30 per cent of ICT purchasing negotiations, while in
conversations it’s never brought up at all. The conclusion has to be that ICT financing does
be top of mind for many SMBs. However, the research presented in this report indicates tha
0%
20%
40%
60%
80%
100%
Company cars
Telephony systems
Office equipment
IT software
IT hardware
Not considered
Considered but not used
Considered and used in the past
Currently using
Expected 2013 ICT budgets
Current use of financing