Where are we going with IT procurement?

The world of IT procurement is changing. Supply-and-demand issues for sourcing IT components, and market and regulator demand for sustainable options, are often the cause of these changes. In many cases, these changes are driving IT leaders to adopt circular IT solutions — models that ensure assets and their components are reused when possible and therefore, do not automatically have a one-way ticket to the landfill. 

 

To get an idea of where we’re seeing circular IT solution demand, according to Gartner®, “By 2030, 80% of hardware vendors’ product portfolio will be linked to circular initiatives, up from only 20% in 2023.”¹

 

 

What do circular IT solutions mean for you as an IT solution provider?

 

Circular IT solutions commonly address the “end-of-life” stages for your customer’s devices. “End-of-life" typically means the devices are past their prime—think about that phone with a cracked screen, or that laptop that takes a full 20 minutes to load an email attachment. This is also the time when your customers ask the “what now” questions: what do they do with the device? Recycle? Refurbish? Buy new? And, how do they determine what the best end-of-life option is? Many customers don’t have the time or background knowledge to answer these questions.

 

Here's a way to visualize circular IT solutions. The picture below highlights how organizations will need to find a way to integrate digital technologies and environmental goals. According to Gartner, “technology-enabled change can be blended with a more sustainable model of management of products that customers, environmental, social and governance (ESG) investors and regulators will insist on. Executive leaders can accelerate digital and sustainable alignment through the “nine Rs” model for digital circularity.”²

 

How do you offer circular IT solutions to your customers?

 

As per Gartner, “Sustainability products are driving growth. For example, in consumer packaged goods (CPG), sustainability-marketed products are just 17% of the market but delivered 32% of industry growth.”³ One of the reasons sustainability-marketed products are just 17% of the market is that oftentimes, businesses may not know how to add sustainable solutions. 

 

One way you can support your customers with circular IT solution onboarding is by offering to add IT Asset Disposition (ITAD) into their device lease contracts. Typically, this addition is a minimal monthly cost and is where you can partner with a financial solutions provider. ITAD services often include device reuse, remanufacturing, and data erasure. It’s important to meet data erasure qualifications including International Standards Organization (ISO) 27001 or the National Association for Information Destruction (NAID) AAA.

 

Understanding ITAD solutions 

 

We mentioned that device lifecycles address how devices are “reused.” In this case, reuse often refers to “remanufacturing” or “recertifying”/ “refurbishing” devices. While these may seem similar, there are minor differences between the classifications:

 

• Remanufacturing refers to an asset being returned to its original performance. Also, the warranty is 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 (including factory certification and minimum warranty coverage).

 

However, let’s say the devices you’ve sold can’t be reused. Recycling could be an option – you could manage ITAD services where the devices are taken apart to see what’s salvageable. Recycling device components can also help your customers mitigate supply chain issues.

 

How do your customers benefit from circular IT solutions?

 

Besides an effort to reduce e-waste, there are several ways customers can benefit from you managing device lifecycle solutions (via ITAD services) on their behalf.

 

Customer can often:

Get data validating their sustainability efforts. Many businesses need data that supports their sustainability efforts. By managing their ITAD services, you can often provide customers with reports highlighting overall device lifecycle data (i.e. how many devices they've reused, what’s happened to the returned device and confirmation of data destruction).

 

Stay current. Technology is always changing. Providing your customers device lifecycle solutions means you can often help them evolve with these changes in a sustainable, efficient, and in most cases, cost-effective and cashflow-friendly manner. Depending on your financing partner, device upgrades can be made in a way that fits your customer’s budget. 

 

Increase employee satisfaction.When cashflow or budget dollars are in question, 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.”⁴

 

When employees have the right technology, that often leads to engagement and retention. In fact, a Harvard 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."⁵

 

How do you benefit from offering circular IT solutions? 

 

In addition to being a trusted advisor, circular IT solutions give you the opportunity to develop ongoing relationships with your customers. Device lifecycle data you supply customers via the ITAD services can open the door for further conversations. For example, they might see they’re recycling less of a specific device and ask for advice. Or, perhaps they want to look at other cost-effective ways to reduce the amount of packaging for their tech products. 

 

Additionally, you’ll set yourself apart from the competition. Circular IT solutions can help give you insight into various aspects of your customers’ business: cashflow, operations, supply needs, etc. You can use this information to provide the best service and advice to your customers. As well, you’ll stay ahead of the curve by understanding this new means of IT procurement and management. 

 

Where can you learn more about circular IT solutions?

 

For more details about device lifecycle solutions, visit our page on lifecycle asset management. Have questions? Contact our technology financing experts. We’re here to help!

 

References

¹ Gartner. IT Is Improving the Circular Economy (June 2023). (Author: Annette Zimmermann).

 

² Gartner. Digitally Enable the Circular Economy Using the 9 Rs Model (August 2023), (Authors: Mark Raskino, Kristin Moyer, Sarah Watt).

 

^2a. Gartner (image). Digitally Enable the Circular Economy Using the 9 Rs Model (August 2023), (Authors: Mark Raskino, Kristin Moyer, Sarah Watt).

 

³ Gartner. Climate Economy: A Clean, Digital and Circular Revolution (April 2023), (Authors: Kristin Moyer, Sarah Watt, Bettina Tratz-Ryan, Lauren Wheatley, Aapo Markkanen)

 

⁴ Gartner. When to Purchase, Lease or Use PC as a Service (February 2023), (Authors:  Autumn Stanish, Stephen Kleynhans, Katja Ruud, Rob Schafer, Sunil Kumar)

 

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.

 

⁵ Harvard Business Review. (2022). In a Hybrid World, Your Tech Defines Employee Experience. (Authors: Brad Anderson and Seth Patton).

 

_{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.}