Lenovo has launched Lenovo Financial Services (LFS) in South Africa, offering a solution that allows enterprises and SMEs to manage their assets through regular refresh cycles on a subsidised rental basis.
With LFS, Lenovo will subsidise up to 20 per cent of upfront equipment costs.
Businesses often neglect to think further than the initial cash vs finance decision and overlook the hidden costs associated with poor asset management. Eighty per cent of costs occur after the initial purchase, says Gartner. LFS says that its new service encourages businesses to think beyond the initial purchase decision and consider other cost drivers in the technology life cycle.
Through innovative asset tracking, contract management, bundled insurance and equipment disposal options, LFS allows commitment to a well-managed IT infrastructure. “Businesses that manage their IT lifecycles can reduce costs by 30 per cent in the first year and by 5 per cent to 10 per cent in the next four years thereafter,” says Gartner.
Commenting on the launch of LFS in South Africa, Graham Braum, Lenovo Africa General Manager, said: “Technology becomes outdated after three to four years, yet some companies still sweat these assets for as long as possible, believing they are stretching their IT budgets. In reality, it works out cheaper to refresh equipment rather than to maintain it. In fact, Gartner says 51 per cent of asset costs occur after warranty periods, meaning the total cost of ownership (TCO) may be a lot higher than initially planned.
“Technology is a depreciating asset,” added Ryan van der Ploeg, head of Lenovo Financial Services in South Africa. “It doesn’t make financial sense for a business to fund rapidly depreciating assets out of their own resources, especially when considering the opportunity costs associated with cash and the subsidy LFS is providing. We provide businesses the use of Lenovo PC Plus products over the most economical time period, making it a win for any business looking to reduce bottom-line costs.
LFS says that the benefits to the bottom line, cash flow and resource requirements include the following:
¬∑ Leasing equipment through LFS is substantially more cost-effective than obtaining finance through a bank or using internal funding:
¬∑ Contracts allow for excess-free insurance against theft as well as accidental, fire and water damage:
¬∑ LFS includes an asset tracking solution, allowing businesses to pinpoint exactly where in the world their assets are and report on changes thereto:
¬∑ Equipment leasing is treated as an operating expense. This also eliminates accounting burdens associated with asset ownership and simplifies the tax consequences:
¬∑ Hassle-free equipment upgrades mitigates the risk of technology obsolescence:
¬∑ Reduced number of vendors associated with procurement, management and retirement of assets:
¬∑ Easy access to account and contract information through a dedicated online portal: and
¬∑ Individual billing to match to cost or business centre requirements.
LFS makes business sense. Companies will not only see a reduced total cost of ownership, improved cash flow and lower end-of-life support costs, but they also benefit from Lenovo’s consulting expertise, during which we will advise on the best equipment for their computing needs, and can rely less on in-house IT resources,” says van der Ploeg.
Businesses will experience minimal downtime in the case of faulty or damaged machines, and LFS will also take care of all their disposal and recycling requirements. LFS really does offer a complete solution. Our commitment to BBBEE ensures that 187% of costs can be claimed against procurement spend.
Lenovo Financial Services is available in 40 countries, and South Africa represents its African debut. Lenovo will consider offering the service in other African markets on a country by country basis.
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