Technology is almost every company’s largest investment and budgets are only increasing. In 2024, Spiceworks found that 66% of companies are gearing up to increase their IT budgets. Leveraging Information Technology (IT) has become indispensable to stay competitive. However, acquiring and managing IT infrastructure can be a significant financial burden for many organizations. IT financing steps offer support, allowing your business to thrive. Consider these six benefits:

1. Reduced Maintenance Costs: According to Gartner, by 2025, companies will spend 40% of their IT budgets on maintaining their technology and legacy systems. IT financing offers a solution that reduces maintenance costs. Businesses can opt to only pay for maintenance when the technology is in use, as per the vendor’s maintenance agreement. Another option is pursuing a bundle financing model that includes maintenance and support services, which can help organizations minimize unexpected repair expenses and downtime. This allows businesses to avoid expensive long-term maintenance contracts and enables companies to focus on core business activities.

2. Financial Predictability: Predictability is key when it comes to money. IT financing plays a crucial role in boosting budgets and investment predictability. When a business gains a clearer insight into upcoming expenses, financing allows companies to proactively allocate technology investments throughout the year, creating more flexibility for strategic investment priorities. Improved budget predictability supported by IT financing can reduce the need to maintain high cash reserves typically held for unexpected investment requirements. Businesses can redirect these freed resources toward other high-value initiatives, such as staffing resources or product investments.

3. Simplified Technology Refreshes: Technology is constantly evolving, increasing demands on business IT teams and infrastructure. Gartner found that 63% of companies find it challenging to secure IT talent, leaving a notable deficit in internal and external services, likely increasing the potential for tech downtime. Compounding the issue, what is considered cutting-edge today can become outdated in just a few years. The reactive approach to these issues is costly. Using a service to fill the gap is a short-term solution but is financially unsustainable for most businesses. IT financing provides a solution by allowing businesses to spread out their technology investments over the useful lifespan of the required technology. This approach offers the flexibility to update the IT environment more frequently as business needs change without the need for large upfront expenditures.

4. Ability to Annualize Discounts for Lower Total Cost of Ownership (TCO): In 2023, Statistica found that software and tech-centric companies spend upwards of 19% of their budget and 16% of revenues on IT. With IT financing, businesses can take advantage of volume discounts and special offers from technology vendors. By annualizing these discounts through lease agreements or managed services contracts, organizations can significantly lower their TCO.

5. Elimination of “Sticky” Manufacturer Practices: Manufacturers are known to bundle their services, so businesses are pushed to stay with the same vendors year after year. This leads IT teams to work with systems that do not fully meet their needs. By partnering with IT financing providers, businesses can avoid sticky single-vendor solutions and gain access to a broader range of technology options. This freedom of choice allows organizations to adopt best-of-breed solutions that meet their specific requirements.

6. Improved Technology Return on Investment (ROI): This improved ROI stems from better resource utilization, reduced financial risk and faster time-to-value for IT initiatives. Investing in IT through financing options aligns technology expenses with the benefits and revenue generated. This enhances a company’s ability to feed financial support into innovation and increases ITs capability to reprioritize demanding tasks.

IT financing offers a strategic approach to acquiring and managing technology assets, unlocking numerous benefits that drive business growth and competitiveness. For the best financing solution, businesses should seek a technology-neutral expert. Verinext Financial Services holds decades of experience in the technology financing industry. We are happy to help you optimize your technology budget and free up valuable capital. Contact us to learn more today.

Related Posts:

Digital Transformation Requires Careful Planning and Preparation

Adapting Your Cyber Security Defenses: Tips for the Modern Business