e2e finance – funding IT intangibles
Software is a major variable cost for any IT operation, usually requiring large upfront payments and costly licensing. Importantly, clients that commit to greater up-front spend boost their purchasing power in negotiating with vendors, as they may receive greater incentives to get the deal across the line.
Over and above budgeted project costs, many clients will also incur circumstantial un-budgeted ‘surprises’. For example, software license true-ups following vendor audits or unplanned growth. These un-timely and unwelcome costs can cripple the capacity of IT departments to complete existing, or respond to new, initiatives.
Even though businesses may have financed hardware purchases in the past, they have traditionally not been able to finance the software components due to the difficulty in getting investment-grade rates for this type of unsecured finance.