feature
duration of equipment deployments that is generally not available when buying equipment.
cycle that is shorter than their company's depreciation schedule, another level of complexity is introduced. Because the accounting has already been recorded, many financial managers are reluctant to support IT requests for “non-standard” depreciation practices except in the most extreme of situations, and certainly not as an operating practice. As a result, the unfortunate situation in many organizations is that accounting practices become the overriding factor in establishing a technology platform's life cycle management target.
Most large IT organizations lease or finance portions of their IT equipment or software portfolio. In a separate research project conducted during April 2010, IDC surveyed 208 companies about their experiences, their degree of satisfaction, and related business outcomes when using leasing programs to acquire and manage their IT resources. The survey included companies ranging from 100 to more than 2,500 employees that are based in North America representing 12 different industries. These organizations provided IDC with a wealth of feedback regarding their life-cycle management practices. Interestingly, over 70 percent of the companies surveyed reported eight factors that they said provided important or very important benefits when leasing or financing their IT equipment. The survey findings clearly demonstrated that the principal reason IT organizations choose to lease/finance their IT equipment is the flexibility and discipline it affords in managing the renewal cycle. That is, leasing adds a degree of flexibility in managing the
Leasing is another way of doing business IDC believes that IT leasing and financing options are more than a series of financial offerings: they present a different way of doing business and can challenge IT and business users to carefully consider the business requirements being placed upon their IT infrastructure, and how they will evolve. Having a road map — an understanding of how the financing solution maps to the organization’s business, financial, and technical requirements — creates tremendous opportunities to improve the overall IT management planning process – not just for leasing specifically. Based on multiple IDC research projects, including the two conducted for this specific study, the ramped support costs for x86 servers and network storage arrays clearly demonstrate that systematic and timely infrastructure renewal lowers total cost. In the case of the technology platforms presented within this report, the cost difference between “Buy Once and keep fixing” and “Acquire (via leasing)/Deploy/Renew” averages 25.4 percent for x86 servers and 20.3 percent for SAN devices. Further, based on the accounting and administrative limitations within many organizations, specifically those without the flexibility to synchronize the renewal cycle such that support costs are controlled, an IT leasing and financing strategy is an effective means of shifting the technology renewal cycle. In IDC’s view, business and IT leaders planning an IT infrastructure investment should keep an important and overriding concept foremost: there is a real and rising tangible cost of “doing nothing” when comparing the technology acquisition alternative to buy, lease, or do nothing. In the case of IT equipment and software, this is just not accurate. The incidence of failure directly increases as a function of age — age of technology and age of the equipment. The documentation for this rising instance of failure can typically be found and substantiated from help desk support records. IDC believes that accurately factoring in rising future costs will help business, financial, and IT leaders make better decisions about technology renewal cycles. ■
PRINCIPAL REASONS FOR LEASING IT EQUIPMENT (% RATING ‘VERY IMPORTANT’)
> THERE IS A REAL AND RISING TANGIBLE COST OF “DOING NOTHING”
N = 154 respondents Source: IDC's 2010 IT Leasing & Financing Survey
March 2011 ■
www.leasingworld.co.uk
25
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52