11 Reasons to Lease
Experton Group believes the conventional wisdom of purchasing all IT equipment is flawed and not a best practice under all conditions. Finance and IT Executives have a myriad of choices today that did not exist a few short years ago. Executives should understand and incorporate these new approaches into their acquisition planning exercises. IT executives should vet their decisions with detailed, fully-loaded TCO analyses that compare the alternatives over comparable time periods (e.g., a three-year lease with refresh versus a five-year purchase) and then negotiate the best deals.
The Value of Leasing: Experton Group has identified 11 advantages that can be realized by leasing. Not all companies will be able to leverage all of these, but IT executives should understand the options and determine which ones are applicable and most relevant to the different equipment purchases that are on the drawing boards for the year.
- No up-front capital expenditures and credit line preservation
- Cost of capital
- Operational expenses versus capital expenses
- Technical currency through short refresh cycles
- The ability to circumvent budget limitations
- Licensing and Taxes
- Potential for added services
- The end of End-of-Life Worries
- To generate cash
- Improved financial management
- Avoidance of asset ownership
IT executives should not only examine lease versus purchase options but should also evaluate cloud computing, outsourcing, software as a service (SaaS), and other options where appropriate. In all cases, IT executives should do a detailed, all-inclusive total cost of ownership (TCO) and total cost of acquisition (TCA) analyses to determine which option best meets the current business requirements and strategies.