Leasing Can MAXIMIZE IT Strategies.

• Author: Lane, Joseph C.
• Position: Information technology

Companies that choose leasing over purchasing for their information technology needs are realizing compelling business advantages such as affordable access to the latest technologies, improved cash flow, pre served credit lines and significant tax savings. When speaking with CFOs around the world, I've heard some are surprised to hear that so many companies -- ranging from business start-ups to Global 100 powerhouses -- find it beneficial to lease technology assets.

IT leasing has become so prevalent, according to Equipment Leasing Association of America (ELA) data, that more than 80 percent of all U.S. companies now lease at least some of their equipment. Gartner Group, the technology research and services firm, reported in 2000 that more than 50 percent of newly acquired IT equipment is leased. IBM alone provides IT leasing or financing to tens of thousands of customers, including more than 98 of the 100 largest U.S.-based companies.

Companies of all sizes are not only leasing more equipment, they're also leasing "soft assets," such as software and consulting services, which can frequently be the most costly part of an IT solution. A recent ELA survey indicates that the volume of soft assets rolled into equipment leases rose more than 400 percent in 1999 alone. This staggering quintupling in a single year vividly illustrates the expanded role leasing plays in a company's IT and business strategy.

Staying Ahead of the Technology Curve

Constant technological advances, rendering yesterday's innovations obsolete, require companies to continually update technology to remain competitive. Today's mobile lifestyle has moved more technology out of the controlled office environment, making asset management progressively more difficult. Combined with an endless number of expansions, mergers and acquisitions, many organizations are left with a concoction of diverse technologies, making effective asset management even more difficult.

One response to this dilemma is a valuable service offered by a total solutions lessor, asset management and tracking. This includes customized reports that provide a complete picture of inventory to keep companies informed of the location, status and cost of every leased asset. Reports can also provide updates to specific aspects of the lease terms, such as contract renewal dates. In addition, leasing professionals can offer valuable consulting services that range from helping customers make effective technical decisions...