The increased digitisation of work is all around us and office technology vendors, since the onset of Covid-19, are increasingly turning to finance experts to help them navigate this period of uncertainty. David Jackson (below) of Siemens Financial Service UK outlines the six essential qualities to look for in an ideal finance partner.
The digitisation of the office towards a paperless and collaborative experience that the office worker can access anytime and from anywhere has gained momentum during the pandemic, but even prior to the current crisis, the world of office technology was undergoing a major shift towards a more digitalised world.
Nowadays, for instance, office imaging hardware not only offers WiFi connectivity and automated billing of users but can also send data back to the supplier so that predictive analytics may help initiate service before the equipment experiences failure. This means that office imaging suppliers are effectively now selling a near-100 per cent uptime guarantee.
According to July 2020 report in Computer Weekly, the crisis has accelerated companies’ digital transformation plans by a global average of six years, and a UK average of 5.3 years.
When upgrading to new digitised technologies and digitally-enabled products, customers want to conserve their capital, pay as they go, be tax efficient and budget reliably, all of which is enabled by smart financing.
For office technology vendors, integrated finance, including office equipment leasing, is a key factor for enabling sales.
Digitalisation is also enhancing the value that financing partners bring to the party for vendors. A smart finance platform helps close more business, accelerates growth and provides added-value information and insight. Continued innovation in automation and online digital tools ensures that high-speed decisions and processes are delivered, so that more deals can be closed, faster.
Here are my top six questions to ask your potential finance partner to ensure you’re getting the most from the arrangement:
#2 – What’s your direction of travel? This is where the financing partner can tell you what’s hot and what’s not in your product portfolio – essential business intelligence. They will be able to give you a breakdown by product, by sector, by sales team, and so on. They’ll help you prioritise sales effort and tell you if any segments are eroding your margins.
#3 – Are there any exceptions? This is where the financing partner spots exceptional patterns – whether adverse events or short terms opportunities – so you can act quickly. Financing data provides triggers to investigate why exceptions are occurring, such as: a competitor’s introductory discount campaign that’s eating into your sales; or an economic event that’s slowing investment; or where demand for a product is going into decline because of a technology phase shift.
#4 – What should you worry about? Here the financing partner is raising more long-term issues that may affect your business – possible future shocks. A good example would be if sales were being written with over-generous nonguaranteed residual values. Although this helps reduce the upfront cost to the end customer, if the residual values are unrealistic, this will leave the vendor with a liability further down the line. The financing partner will be able to give early warning to prevent this scenario from happening.
#5 – How do you compare? Are you behind or ahead of the competition? Where the financing partner has an extensive vendor base, they can give you extremely useful benchmarking reports. You won’t be able to learn about individual competitors, but you will know the average, as well as the best- and worst-performing range. This is key to intelligent sales performance management.
#6 – What’s coming over the horizon? Your financing partner should be providing you with specialist knowledge and advice about any financing and regulatory changes that may affect your business and/or your customers. A good example are updates on legislative changes, such as the international accounting standard IFRS16, which dictates that all lease commitments are now on-balance-sheet.
Picking the right financing partner can make all the difference for office technology vendors – surviving the crisis and thriving thereafter, especially at a time when digitalisation has taken a leap as companies adjust to the ‘new normal’. A smart financing partner provides business intelligence that really helps a vendor build their business.