The current economic climate, characterised by high interest rates, high inflation, and a weakening currency has left most organisations in a predicament. Businesses are struggling to stretch their budgets over a multitude of operational costs.
For most companies, the IT department and its attendant costs to purchase equipment and keep it running smoothly is a necessary evil. The challenge rests with IT leaders to find ways to get the latest and greatest equipment without breaking the bank or affecting operations.
Buy or lease?
There is now an acknowledgement across the board that capital investment in technology that depreciates in value and rapidly becomes outdated is not a practical strategy. Leasing is fast becoming a viable alternative to traditional procurement methods.
Here are some considerations to factor in if you should buy or lease your IT:
Financial Situation: Evaluate your financial position and determine if you have the capital available for an outright purchase or if leasing aligns better with your budget.
Technology Lifespan: Consider the expected lifespan of the technology you require. Leasing may be more suitable if the technology becomes quickly obsolete or if you anticipate frequent upgrades.
Usage Patterns: If you have unique usage patterns, customisation needs, or specific software requirements, owning may provide more control and flexibility.
Future Requirements: Assess whether your technology needs are likely to change in the future. Leasing can offer more adaptability to evolving needs.
Where to go from now?
History has favoured cash or a bank loan, but leasing is now a strong contender whether you are cash rich or follow a conservative capex model. It redirects cash into appreciating assets needed to carry out business functions or frees up cash reserves for core business activities – a needed benefit in this economic client.
With leasing companies like InnoVent, who add an asset management component, leasing will assist with the essential facilitation of lifecycle management and sustainable procurement practices.
The environmental angle
We are facing an environmental crisis. In 2021, human beings discarded an estimated 57.4 million tonnes (approximately 63.3 million U.S. tons) of electronic waste. That waste will outweigh the Great Wall of China, the world’s heaviest human construction.
It is time for those in the IT sector to turn the tide and adopt procurement models that support the Circular Economy. Leasing has been attracting attention as of late in the context of sustainable development goals (SDGs) and the circular economy.
Leasing does away with the need to purchase and own equipment, so equipment can be shared and reused and kept in circulation for longer and away from landfills.
We cannot argue that the capital cost to always have cutting-edge technology equipment is undoubtedly high, but ultimately, the decision between owning or leasing technology depends on your specific circumstances. Whichever option, delayed upgrades should not be an issue and the negative environmental impact of technology must be mitigated.
For more information, get in touch with our team today.