Outdated Technology is Costing Your Business - Leasing is the Solution
Your boss probably thinks they’re saving a fortune by making-do with old equipment, but it’s costing your company more than you think.
We’ve all done it: hung on to that pair of shoes with frayed laces or that burnt old pan because “it still gets the job done”; even if dinner does always taste like toast.
It’s the same within business; if you can still turn the computer on, who cares if it’s slow or that you need to hold the mouse together with some strategically placed tape? What these businesses don’t realise is that “making do” may mean the difference between profit and loss.
So how can old, run down technology cost a company so much?
- Reduced productivity
Crashes, system downtime and even just slow processing waste time, halt production and accumulate high costs to fix as employees work to resolve IT and maintenance issues. Outdated technology also inhibits your business from the numerous benefits that’s come with updated equipment, wasting your business’s potential.
- Overshadowed by competitors
In order to stay competitive in today’s market, it’s important that you keep up with your competitors with technological advancements. In fact, 49% of SMB’s revealed that new technology has helped them challenge larger organisations.
- Incompatibility with new advancements
As technology evolves, outdated software and equipment becomes retired. Software developers stop catering for the older technology that can’t process the advancements and this outdated machinery becomes extinct. There are some businesses who get left behind.
- Legal and regulatory compliance
Failure to have updated technology and machinery may in fact be considered a compliance risk. Whether its ancient equipment that’s considered a safety hazard or software that’s not adequately secure and protected to modern cyber threats, auditors may issue a fine.
- Breakdowns and repeat maintenance
Many businesses cumulatively spend more on repeatedly repairing equipment than they would by investing in upgrades. These accumulated costs waste expenditure, prolong the inevitable and limit productivity, especially as maintenance can bring operations to a halt.
How leasing helps reduce these burdens:
One of the largest blockades to businesses updating their equipment is cost. A renewal of an entire offices desktops is no doubt an off putting and expensive task. One way organisations avoid the high impact to their cash flow that equipment revival brings is through leasing.
A lease spreads the cost of the equipment across the length of the asset’s economic and useful life. By paying for the equipment whilst you use it, you are able to not only relieve the high initial costs, but also fund the later payments with the ROI you receive from implementing the equipment within your business. As a lease uses a predetermined interest rate and pricing, you know exactly what you are paying for throughout the agreement.
Leasing is a very practical solution to equipment revival as it encourages regular reviews of equipment performance and business requirements. When a lease nears its end date, businesses are obligated to notify the lessor to whether they want to renew or terminate the lease. This provides the perfect opportunity to analyse the effectiveness and necessity of the assets under lease, effectively forcing your business to decide whether an upgrade is necessary – a question many of us seem to delay.
If the company does decide that the equipment does need to be updated, as they are not the legal owners of the equipment, they do not need to worry about the associated costs with storage and disposal of outdated equipment. It is the lease provider’s responsibility to ethically dispose of the assets, allowing you to focus your funds and attention to investing in the next upgrade.
There are many types of lease agreements and lessors available, providing plenty of opportunity to negotiate an agreement that best suits your budget, regulatory and specification requirements. With an expert’s guidance, there is the potential to arrange leases that include asset refresh, early termination and even lease buy-out clauses to ensure you are getting the best out of the equipment.
In today’s modern technological age, it is becoming less possible for businesses to thrive and survive unless they are willing to take the plunge and invest in new equipment and update their existing operations. However, it is important not to rush these decisions and to choose an asset finance option that allows your business to procure the correct assets in a cost-effective and appropriate manner. Innervision helps some of the world leading brands review and renew their new and existing leases on a daily basis so take it from us: when negotiated right, a new lease can provide your business with more than a fancy new piece of equipment.
For more information on how to make the most of your assets and leases as well as bring greater efficiency to your business, download our overview of leasing now.
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