What's good about IBM's financing solutions

BANGALORE, INDIA: Giving organizations the opportunity to optimize savings within tight or shrinking budgets while maintaining a technological edge, IBM delivers customized and affordable solutions to unique enterprise IT needs.

In an interaction with Madan Ramvenkatesh of CIOL, Sapan Jain, Country Manager for IBM Global Financing in IBM, India/South Asia, says customized financing options can provide enterprises the financial agility to capitalize on new opportunities and accelerate business transformation, while lowering the costs. Talking about IBM Global Financing, he said it is more than a bank, as it helps companies better manage cash, and harvest better ROI while keeping competitive edge.

Excerpts

1. CIOL: What is the role played by IBM Global Financing? How does it benefit the Indian enterprises?

IBM Global Financing provides customizable lease and loan offerings to much of 90 per cent of the Fortune 100, as well as small companies with as few as ten employees. Small and medium businesses and large enterprise alike can acquire the business and technology solutions through IBM Global Financing to create enhanced value and drive profits. Our offerings are designed to enable IT organizations to operate in a new economy and mindset that demands high value, transparency, and proof of return on investment. Financing provides access to alternative sources of capital from a stable partner, IBM, thereby addressing capital asset management, business resiliency and flexibility needs.

2. Why financing IT is business imperative for both small and large organizations? IBM's initiative towards this.

SMBs want the same thing as the large enterprise clients. Value and innovation since they face the similar challenges as larger enterprises. What they lack is the resources to address those challenges. With the economy starting to rebound - small and mid-sized companies are central to the forthcoming recovery - it's the perfect time to consider new and innovative IT investments to help businesses grow. IBM Financing Advantage, from IGF, offers credit qualified mid-sized companies' access to affordable leases and loans for a complete IT solution for IBM and non-IBM hardware, software and services. With affordable low rate financing at competitive rates and flexible terms, these can help SMEs acquire the solution they need rather than the solution they can afford since costs can be less while preserving cash for core business needs.

3. Can you elaborate the approach IGF adopts in providing complete financing solutions?

We offer total financing solutions to credit qualified clients, from financing green data center to providing environmentally-compliant disposal of retired IT assets, IBM Global Financing can help support the company's green strategy in a way that cuts costs, increases cash flow, and better aligns upfront costs to anticipated project benefits. In addition, IBM Global Financing can facilitate smart financial decisions at every stage of the IT lifecycle--from the planning phase through equipment disposal. The customized financing options can provide enterprises the financial agility to capitalize on new opportunities and accelerate business transformation, while lowering the costs. This can help enterprises, stretch tight budgets, innovate smartly and position the business for faster growth.

4. When it comes to financing IT, what is special about IBM Global finance vis-a-vis banks and other financers?

While companies are looking for new financing sources and quicker ROI, financing institutions are averse to unsecured loans. Many traditional sources of credit are reluctant to fund IT, seeking additional collateral against loans and financing deals. Besides, banks and brokers, generally do not possess sufficient IT industry knowledge to make accurate assessments of fair market values, and may cover their risk with increased financing rates. Banks offer relatively simple loan finance that is secured on a client's assets.

However, IBM Global Financing is more than a bank, as it delivers comprehensive, integrated, customized and affordable solutions to unique enterprise IT needs. This helps companies better manage cash, and harvest better ROI while keeping competitive edge.

5. What approach does IGF has towards SMEs?

With the continuing tough business environment, we are offering our clients interest free financing for 12 months. This means, instead of paying the full amount upfront, clients defer their payment over four quarterly instalments and realize big savings compared to single cash outlay. There's no better way to reduce the total cost of operation with low rates, flexible payment plans, fast approvals, and a single periodic payment. Subjected to IBM terms and conditions as applicable, this offer is available on all IBM Software purchases, as well as IBM Power and Storage Systems.

6. Why is it feasible for SMEs to approach an IT company for financing?

Unlike IGF, many traditional sources of credit are reluctant to fund IT, seeking additional collateral against loans and financing deals. General finance institutions, such as banks and brokers, generally do not possess sufficient IT industry knowledge to make accurate assessments of fair market values, and may cover their risk with increased financing rates. IBM Global Financing offers a comprehensive range of leasing and loan options specifically designed.

7. How IGF caters to the needs of SMEs?

With the rapid pace of business today, organizations need more from their investment than ever before - more accountability, more agility and better return on investment. Financing can improve cash flow and deliver better ROI (return on investment) for organizations of all sizes, including SMEs. Our range of services makes us a ‘one-stop-shop' for SME businesses. Regardless of the existing asset mix, IBM Global Financing can provide a unified, customized approach for the complete IT infrastructure, to simplify administration and reduce complexity. While pure technology focus ensures highly competitive lease rates to reduce costs - the ability to lease both IBM and non-IBM equipment, and finance software and services, increases business flexibility. Besides, IBM Global Asset Recovery Services combines recycling value with environmental standards that comply with applicable environmental laws and regulations.

8. So IGF now dominates the computer leasing business. Tell us more about it.

As the world's largest IT financier, IBM Global Financing has an asset base that, were it a bank, would place it in the top two dozen US commercial banks, delivering financial services to 125,000 customers in more than 55 countries. We finance purchase of software and services too. Typical services financed by IBM Global Finance (IBM GF) are IT consulting, data center buildup and call center buildup. IGF also offers huge flexibility in funding non-IBM IT assets. Our terms and conditions are one of the simplest in the industry and our pricing is very transparent. Our in-house capability of selling used IT equipment allows us to take pass bigger RV benefit to leasing customers. Also, being part of IBM, our deep understanding of technology helps us to correctly understand the nature of IT projects and accordingly offer a customized solution to our client.

9. How IGF helps enterprises transforming into green?

IBM Global Asset Recovery Services (GARS) of IBM Global Financing has been disposing of end-of-lease assets like servers, hard drives, monitors and more through refurbishment, resale and recycling. With deep expertise in reselling used IT, IBM is committed to asset disposal processes that minimize environmental impact and maximize asset value through reuse, resell or recycle retired technology and send a minimum to landfill. Besides, GARS complies with applicable local environmental and disposal regulations and includes buyback at agreed prices, disposal of unusable equipment and data security. A more collaborative approach within the industry and innovation ecosystem including the government can facilitate a greener planet.

10. In the near future, do you see any new financing trends?

Forward thinking CFOs can make the enterprise smarter in an era of increased uncertainty. Mounting cost pressures, coupled with the urgent need for more predictive intelligence and greater transparency, are prompting CFOs and their Finance organizations to do more than just excel at core finance activities. Rather, they must become "Value Integrators," expert at providing input into enterprise strategy and enabling faster decision making by integrating information and standardizing data and processes across the organization. In many instances, financing IT rather than cash purchase can make sound business sense. It relieves pressure on cash flow, and enables an IT investment strategy that adapts to changing business circumstances easily and cost-effectively. Besides, financing supports a disciplined approach to prioritizing resource allocation including cost reduction efforts.

11. The concept of leasing is new to India. Your views on this.

A challenging economic climate demands creative decision-making from competitive companies and innovative organizations. By choosing to lease rather than purchase, organizations have the opportunity to optimize savings within tight or shrinking budgets while maintaining a technological edge. First, financial decision makers will have the immediate opportunity to reduce IT costs by paying only for the use of the IT equipment rather than purchasing and owning the IT equipment. Leasing also helps eliminate upfront cash outlays and allows organizations to attain more from existing budgets. Moreover, leasing allows companies to remain at the forefront of current technology via programmatic IT refreshes, thereby reducing the risk of technology obsolescence. In addition, for select mid-range and high-end IT equipment, you have the option for mid-lease upgrades: a significant benefit for organizations that require additional capacity or storage in the midst of the IT life cycle with minimal budget impact. Finally, with leasing you have the flexibility to return, extend or purchase the equipment at the end of the lease. IBM Global financing offers many advantages through its leasing options to forward-thinking organizations battling shrinking budgets and rising operating costs.