The cost of ownership can be significant for any organization. Capital allocation and strategic resource use are only two significant elements that are impacted by the decision to invest and purchase key implementations. Traditionally, using cash to purchase and obtain outright ownership was the only option. However, now options such as acquiring assets through an “as-a-service” model are becoming more prevalent. This is especially true in a sector that has never been more important in any line of business; technology.
While many decisions about technology investments are made using only black and white, price based information, there is a lot more in play, especially in the fast and ever changing world of technology. Just as a cars, boats and motorcycles depreciate, so does every piece of technology. Think of the phone, TV or computer you had even just 5 years ago. Do you still have it? Does it offer the same performance and features that its newer counterparts do? The answer to both of these questions is likely “no”, especially the latter. So, simply comparing the cash price of a purchase to the total of the monthly lease or as-a-service payments to make a decision isn’t technically comparing apples to apples.
If you were to spend $25,000 on a technology purchase you will have an advanced, high performing platform that will meet the needs you have allowing you to grow and achieve your goals…today. However 2, 3, 4 years from now that won’t be true and your $25,000 will still be gone. In fact, as a depreciating asset, this $25,000 will be worth considerably less. Furthermore, the fact that such a contribution was made toward it will make it that much more difficult to move away from in spite of a more powerful, more efficient option.
On the other hand, leveraging the benefits of the as-a-service model drastically lowers the cost of ownership for technology. For less than $525 a month for 4 years ($25,000), you can have the same equipment, and still have that $25,000 available to invest in other facets of your organization. Those resources can go into other areas generating much higher returns instead of being trapped in something that is losing value. One of the most attractive features of this option is that at the end of that 4 year period, instead of making another significant investment, you can simply renew and upgrade to take advantage of the newest technology available.
While circumstances and needs vary, it can be shortsighted to make decisions based strictly on an investment vs. payment basis. Understanding the intangible elements of that decision and the impact it will have across the board and into the future is paramount. Link Integration Group creates, designs, installs, and manages commercial AV integration for businesses and organizations of all sizes. Their AV-as-a-Service model offers new and more options for the technology needs of growing businesses.