15 Reasons it Makes Sense to Lease IT

by Cal Braunstein

 

 

14. Avoidance of asset ownership.

Asset ownership can be a disadvantage, with reasons varying from compliance and legal issues to liability exposures to debt covenants to disposal risks. Leasing eliminates this exposure.

 

 

15. New business opportunities.

Leasing allows corporations to keep capital or credit in reserve so that the company can take advantage of new business opportunities as they arise.

 

 

Answer Through Analysis

The conventional wisdom of purchasing all IT equipment is flawed and not a best practice under all conditions. IT executives should be open to all financing options and use them when they best make sense. Executives should do detailed, fully loaded total cost of ownership (TCO) and total cost of acquisition (TCA) analyses to determine which option best meets the current business requirements and strategies. The analyses should compare the alternatives over comparable time periods (e.g., a three-year lease with refresh versus a five-year purchase). Once the best option is known, executives should then negotiate the best deal.

Cal Braunstein is lead analyst at Robert Frances Group http://www.rfgonline.com/ , which provides advisory, consulting and research services to senior executives in IT and LOB management as well as for marketing/sales management for companies that provide IT and communications services and products.