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Pay-for-use IT Hardware
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Current Challenges Facing the Industry
• Lack of capital to expand or start up;• Dwindling Fees and margins from customers;• Shorter contract terms;• Cancellation of contracts• Idle capacity of equipment;• High per seat costs;• Mismatch between revenue/fees and costs/investment;• Highly competitive environment;• High staff turnover;• Technology is getting expensive;• Lack of custom made solutions for the specifics of the call center
industry.• Lack of capital to expand or start up;• Dwindling Fees and margins;
How you currently source IT hardware
You buy Cash and Traditionally, why ?
• Lack of custom made solutions from suppliers;• That’s what you have always done;• Subjective personal preference;• Cash/Funding is readily available;• Donate;• Global supplier agreements;• Sweating Strategy.
.
Disadvantages of Buying Cash
• Tying up Capital; • Using cash slows down company growth dramatically;• Mismatch between revenue and cash spent;• Contracts cancelled or suspended, you sit with idle capacity;• Can’t bid on short term campaigns/contracts because of cash
outlay;• Out of warranty issues, hidden capital costs;• End of term disposal;• Trying to be an IT company, causing downtime and lost income;• Being out priced by competitors because your costs are too high.
Paradigm Shift 1
Cash Purchase vs Pay-For-Use
The Right Way : Paradigm Shift 1Current Challenge Our Solution
Tying up of Capital Preserve Capital by paying monthly
Mismatch between revenue and spend
By paying small amounts monthly you match your income to expenses
Funding substantial business, slows down cash flow
Have extra cash in the bank to expand, due to monthly rental
Cancelled contracts Scale down, hand back equipment
Short term contracts, expensive
Access equipment from 1 month to 36 months
Out of warranty issues and costs
Take away hidden costs of spares and labour
Out priced by competitors due to high setup costs
Small monthly premiums make you more competitive
The Right Way : Paradigm Shift 1continued
Current Challenge Our Solution
Trying to be an IT company Maintenance and upkeep headache is ours
Disposal of IT assets We remove non-core equipment and take away the headache of eWaste/Carbon footprint disposal
Balance Sheet heavy, eroding shareholders wealth
Off balance sheet financing
Ownership Challenges, focusing on core business
Pay-per-Use Cost per seat
Now what?
Decision 1
Choose Pay-For-Use!!!
Paradigm Shift 2
Classify your users into “Power and Non-Power Users”
• What percentage of staff are average/medium and high end users?• Do all your users need the state of the art equipment?• What do the users actually use the machines for on a daily basis?• Do they all need to use the full application suites?• Forgetting your buying and replacement policy, which users need a regular
refresh every 3 years?• What informs our buying decision?
Would you drive a Rolls Royce around on the golf course?
You could, but it’s a little excessive
Similarly why provide a high end device to a general user, when fit for purpose IT hardware, can save substantial costs without compromising on speed, reliability and efficiency
We say: Match capacity with functionality
Power vs General Users
HEALTH: Discovery Health
Breaking into the market and convincing decision makers at a HIGH END COMPANY that Qrent was a viable and reliable option
Discovery SA has saved R10mil in the last 3 years adopting the Alternative Smart Way.The Discovery Health partnership in SA has resulted in Qrent’s first UK client – PruHealth.
Qrent successfully completed a deal with Discovery Health – and subsequently supplied equipment in excess of 3,000 machines
ActionChallenge Results
Paradigm Shift 2 Impact
“Scenario : Fit for Purpose Approach”
• Traditional Method• 1000 users @ R7,500 per PC = R7,5million
• Alternative Method• Profile your users, including applications
20% Power Users @ R7,500 = R1,5million 80% Non-power Users @ R4,000= R3,2million
• Total Cost = R4,7million
SAVING = R2,8million (35% +)• 200 Users use Innovent at prime less %
Vendor warranties and support• 800 Users use Qrent at reduced monthly rates
Warranties, insurance, tier one brands, SLA
Summary Benefits
• InnoVent – Traditional• Cost effective funding• Stronger Cash Flow(Don’t tie up your cash)• Maintain relationships with existing suppliers• Negotiate your pricing up front• Off balance sheet• Qrent – Alternative• Priced at 50% of traditional• Conserve Cash• No credit line impact• Short terms/ flexibility
1 day to 36 months• Scale up and down• On demand availability• Hassle free : includes warranties, insurance, spare units, SLA’s• Tier one brands, standardise e• Onvironment
Conclusion
Many organisations are considering innovative ways of increasing margins.
IT departments are starting to understand the needs of their users. By classifying these into power and general users they can successfully take advantage of the Qrent
Alternative, Smart Way. Adopting this model has provided the benefits of first mover advantage – saving substantial costs without compromising performance.
It is clear that every organisation ought to be thinking this way.
Contact Details
Johannesburg : +27 11 791-0645 [email protected] [email protected]
Cape Town : +27 21 020-0104 [email protected]
Durban : +27 31 830-5220 [email protected]
Other OfficesZimbabwe Zambia Tanzania United Kingdom
Next Steps
Talk to us – we are outside!
