Navigating Economic Uncertainty with Cisco Capital

Inflation and an economic slowdown are causing IT budgets to tighten; business decision makers need flexibility in their IT spending options. As a result, many businesses are starting to feel the pressure to cut costs during a time that would have been spent investing in or upgrading their digital infrastructures. Since preserving capital will remain a top priority, decision makers will need to look for options that allow them to maintain or increase IT capabilities while keeping monthly spending to a minimum.

Minimize risk in your IT spend

Instead of buying technology assets, businesses might consider payment over time options – this reduces equipment value risk and provides more flexibility. In fact, according to IDC, payment over time is becoming increasingly popular among global businesses for these very reasons. In the IDC 2021 IT Leasing and Financing Survey Understanding Customers Key Driver and Motivations, 70% of respondents noted that the availability of leasing/financing does impact their company’s choice of vendor. During a time when budgets might be tight, we anticipate that this will continue to be a key factor.

When deciding whether to pay over time or buy assets, respondents listed flexibility in both terms and equipment types as key decision drivers. Respondents also noted that payment over time allows their companies to negotiate upgrade provisions during the term to add capacity or increase performance, which is especially valuable during economic downturns. Transparent pricing and accuracy of all invoices and billing processes are other key attributes in the respondents’ selection process for an IT lessor.

Building a strong IT life cycle policy

In times of economic uncertainty, flexible payment solutions like consumption or circular IT models might be the saving grace for technology decision makers. Not only do they help reduce IT operating costs, but they can be a powerful tool to develop a strong IT life cycle management policy that aligns costs with budgets and removes the need for significant capital outlays. Cisco Capital and Cisco Refresh, which offer global payment and lifecycle management solutions, were created to enable customers and partners. Not only do they provide flexibility, but these businesses contribute to the circular economy that promotes sustainability and reduces e-waste which are top of mind for businesses.

As these trends and factors continue to mount, we anticipate more companies will seek flexible payment structures to maintain an up-to-date digital infrastructure that will help keep them competitive into the future.

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