The not-so-secret way to solve your customers’ business challenges

By Joe Iavarone, DLL North America Regional Sales Manager

In the United States, laptop purchases are expected to steadily recover in 2024. To put this into perspective, according to Gartner®, “The overall PC market is now expected to decline even further compared to our previous forecast with a decline of 13.8% in 2023 (compared to a 12.3% decrease in our previous forecast update), before recovering by 4.9% in 2024 (compared to a 7.7% increase in our previous forecast update).” ¹

Regardless of where your customers are in the world, this recovery in laptop purchasing will likely mean your customers will ask you for device upgrades. 

This brings up a question for your customers: what do they do with their old technology? 

This is what typically happens:

• The old technology goes into a storage closet or gets lost, adding to utility costs and posing potential data security concerns. According to a recent Gartner report, “About 30% of enterprise IT hardware may be missing, lost or “ghosted” in enterprise environments today, which happens at any stage of the life cycle — from procurement to provisioning to upgrading.”²

• The old technology has a one-way ticket to already full landfills — by 2030, The 2020 Global E-Waste Monitor projects there will be 74.7 metric tons of e-waste.³

Neither option is sustainable from a business or environmental perspective. However, have you considered that this stage is where you can show your value and maintain a competitive edge? You can do this by offering a solution that has been around for years — device leasing. 

If device leases have been around for years, why should you offer them now to your customers?

The reason is simple. Device leases have evolved beyond spreading out payments over a term. Device leases can offer your customers a “total solution” for key business challenges including device sustainability and security, cashflow, employee retention, and IT upgrades. By solving these problems, you can benefit by having predictable sales cycles and showing your value as a trusted partner. 

How can you offer device leases?

The simplest way to offer device leases is by partnering with a specialized financial solutions partner. A good financing partner can help create flexible payments (i.e. monthly, quarterly, or annually) that work with your customers’ budget and business needs. In the case of device leases, it’s ideal to find a financing partner with a tech leasing background. 

Four business challenges that device leases can help your customers address

1.  Sustainability

According to a Gartner press release, “By 2030, 80% of hardware vendors’ product portfolio will be linked to circular initiatives, up from 20% in 2023.”⁴

Sustainability tracking

There’s a growing need for businesses to track and report on their sustainability. According to the same Gartner press release, “In fact, re-manufacturing and reusing end-of-life devices instead of having them end up in a landfill has become top of mind for most businesses around the world.”⁵

However, the challenge most businesses face is how to quantify their sustainable practices. In a recent study from the International Data Corporation, two main challenges for businesses and IT decision makers to incorporate sustainability included, “understanding the goals and metrics” and “quantifying the actual environmental impact.”⁶ 

What this means is, in many cases, your customers need and want to track their device sustainability initiatives, but don’t know where to start. This is where you can help, by partnering with a financing provider. 

Depending on the provider, IT asset disposition (ITAD) services can often be added into your customers’ pre-set payments as part of their device lease contract. The ITAD services are managed by the financing provider. Some ITAD services can include reports (similar to a “report card”) highlighting overall device lifecycle data. For example, this report card could include how many devices your customer has recycled, giving them data-driven sustainability metrics. These metrics could be used in their annual reports or other stakeholder-facing documents. 

Secure and sustainable device disposal

Mentioned earlier, most customers don’t have the time or expertise to handle device disposal. This is where ITAD services come in — like “reporting,” ITAD services can often be added into your customers’ pre-set device lease payments and can include:

• Device pickup: if the customer wants to upgrade their devices at the end of the lease, this is when ITAD services typically start.

• Data sanitization: Pushing the “delete” button won’t cut it. Reputable ITAD services will include proof of data erasure qualifications including International Standards Organization (ISO) 27001 or National Association for Information Destruction (NAID) AAA. 

• Device reuse: “reuse” typically refers to remanufacturing and recertifying or refurbishing an asset. Remanufacturing is when an asset has been returned to its original performance. The warranty is either the same or better than a newly manufactured product. Refurbishing/recertifying refers to when an asset has been repaired, cleaned and had parts replaced to return it to as close to a new product as possible.

• Device recycling: recycling typically means the devices are taken apart to see what’s salvageable. Besides sustainability benefits, you’re helping mitigate supply chain issues. As we saw during the COVID-19 pandemic, there was (and often still is) a computer parts shortage.

 

2. Cashflow

Here’s something to consider. Unless it’s a unique circumstance, most businesses don’t pay an employee’s salary upfront. Businesses rely on a steady stream of revenue throughout the year and pay their employees in increments (usually on a weekly or bi-weekly basis) to preserve cashflow and match the cost to the benefit. 

However, most businesses don’t apply that line of thinking to their device investment. Typically, they pay for their devices in one upfront, lump-sum payment – which in some cases, can hurt their cashflow and eliminate any return on investment. 

Device leasing allows your customers to preserve their cash and pay in pre-determined increments.  By working together with your financing provider, you can build an affordable payment option for your customer and in most cases, provide them with a multi-year term solution.

Cashflow also applies to device maintenance and disposal costs. With device leases, maintenance and disposal costs can be added into the pre-set device payments, making it a “total solution”. 

The main point: device leases can mitigate cashflow stresses, allowing your customers to use that cash towards revenue generating activities. 

3. Staying ahead of the curve 

One of the biggest benefits to leases is that they're commonly made in low monthly payments over two or three-year terms. These terms provide predictable device refresh cycles that can help your customer keep up with the latest tech while paying a lower price. In most cases, IT upgrades are at a minimal monthly cost, allowing your customer to maximize their budget which is often already set. 

Offering predictable refresh cycles also helps with your sales cycle and volume. In terms of your sales cycle, you have a predictable time where you can meet with your customers to review their device needs and budget. From there, you can work together with your financial solutions partner to find your customer the best device leasing option. With respect to sales volume, device leases can often increase how much you can sell without having to offer extraordinary discounts. 

4. Employee satisfaction 

When cashflow is limited, businesses can often hold onto the devices they have, even when they're past their prime. However, according to Gartner, “Succumbing to the financial temptation of extending the useful life of PC assets (e.g., to five or more years) can incur rising maintenance costs and risks significant reliability issues that can severely impact employee productivity and the user experience.”⁷

When employees have the right technology, that leads to engagement and retention. In fact, a Harvad Business Review article cited these sky-high stats: “Employees are 230% more engaged and 85% more likely to stay beyond three years in their jobs if they feel they have the technology that supports them at work, according to Qualtrics."⁸

Stand out from the competition

According to the recent IDC forecast, roughly 13% of spending on PCs in the US in 2024 will be in the form of a lease contract.⁹ This means there is still $56 billion in PC spend opportunity to bring a unique value proposition to your customers.

And, when your customers succeed, you do too. 

Sources

¹ Gartner, Forecast: PCs, Worldwide, 2021-2027, 3Q23 Update, Ranjit Atwal, Roberta Cozza, Mikako Kitagawa, Tracy Tsai, Rishi Padhi, Namrata Banerjee, Rounak Bhattacharyya and Divyanshu Singh, September 28, 2023. 
 
² Gartner, The Complete Guide to a Sustainable Device Life Cycle Using the IT Circular Economy, Autumn Stanish, Annette Zimmermann, September 7, 2022

³ Global E-Waste Statistic Partnership. (2020). The 2020 Global E-Waste Monitor. P. 13

⁴ Gartner Press Release, “IT is improving the Circular Economy”, June 28, 2023, https://www.gartner.com/en/newsroom/press-releases/2023-06-28-it-is-improving-the-circular-economy

⁵ Gartner Press Release, “IT is improving the Circular Economy”, June 28, 2023, https://www.gartner.com/en/newsroom/press-releases/2023-06-28-it-is-improving-the-circular-economy  
 
⁶ IDC. (2023). IDC Future of Digital Infrastructure: Incorporating Circularity into your Business: Top Operational & Business Challenges (IDC Source: Circularity Economy Survey, IDC, February 2023, n = 1946)

⁷Gartner, When to Purchase, Lease or Use PC as a Service, Autumn Stanish, Stephen Kleynhans, Katja Ruud, Rob Schafer, Sunil Kumar, February 21, 2023

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

⁸ Harvard Business Review. (2022). In a Hybrid World, Your Tech Defines Employee Experience.

⁹ IDC. (2023). Excerpt from June 2023 IT leasing and financing forecast model from the Worldwide IT Leasing and Financing Forecast, 2023–2027: Economic Challenges Cloud Outlook for Top 25 Countries (US50717323).

 

_{Disclaimer:
In making its decision to enter into a financial product, the customer shall rely upon its own accounting, tax, legal and other professional advisors. Without limiting the foregoing, the Finance partner shall make no representations or warranties regarding the accounting or tax treatment of the financial product.}