Enterprises must rethink how they pay for technology to survive the current crisis

[AntonPauw]

The global COVID-19 pandemic has created a watershed moment for organisations to realise that they need to build flexibility and scalability into how they consume technology, as the current crisis has turned business models on their heads and thrown budgets out the window.

Businesses are facing the conundrum of where to find budget during unprecedented financial uncertainty, and the financial drivers that have underpinned business investments and decisions to date are now even more paramount, with new metrics such as time-to-value and various others keeping executives and decisionmakers awake at night.

Technology investment has always been tricky: while it does wonders as a digital enabler for all aspects of a business, it causes many a headache for those having to account and budget for infrastructure that depreciates rapidly. What’s new today is old tomorrow and paying in advance no longer attracts the discounts of yesteryear.

The answer lies in only paying for what you need now and ensuring the business benefits are reaped, and justifying a monthly cost, rather than paying upfront for a solution that is perhaps superseded by new technology in a few years’ time.

In parallel to a world where rapid technology transformation is the new norm, the good news for CFOs is that financial tools and capabilities have evolved too. You can now have your digital cake and eat it.

Never as relevant

The consumption-based IT or pay-as-you-go model for technology investment is not a new concept, but has never been as relevant as today. Now more than ever, companies need technology, but now more than ever, they don’t have budget. The cash and capital budgets that they had allocated for technology are now being reallocated to paying salaries, keeping the lights on, paying the rent and dealing with the immediate fallout from the pandemic.

Aside from the financial flexibility of only paying for the technology that they use with a pay-as-you-go model, businesses also benefit from the ease of access to cloud technology platforms, which in turn is prompting traditional finance models for on-premise and hybrid solutions to also evolve.

The consumption era is leveraging a lot off how we see consumerism and consumer behaviour changing, and the COVID-19 crisis is the ideal scenario to highlight to companies that their technology requirements – specifically the need for digital transformation – cannot wait for the pandemic to pass and for budgets to recover. Now more than ever, your business is required to transform, it is required to be very agile, secure. Moreover, it also requires mobility, thereby accelerating productivity from anywhere.

Flexibility and scalability

However, digital transformation costs money and businesses need a funding model to embark on these projects, and stay ahead of their competitors. The reality is that those that have already embraced consumption models are able to adjust to the scalability of the new reality and would have been able to scale down their technology requirements as needed. Those organisations would have had some flexibility built into their consumption models to allow them to circumvent budget issues, as well as forecast and provisioning problems.

For companies that are stuck in a traditional IT procurement mode and may have had to cancel or put on hold largescale IT projects because of the pandemic, there is an alternative that can enable them to continue doing business, as long as they embrace technology consumption as a reality within reach. Teams of industry experts are standing by to assist in finding the right model for how they consume technology. It’s about access and not ownership.

 Flexible Consumption solutions offer a variety of financial and asset lifecycle solutions enterprises can leverage to help alleviate some of their current financial strain, and position them for future success.

Never waste a crisis – it may be necessary to restart your industry with a different trajectory, one that is digitally enabled, built for agility, and designed with resilience to future disruptions. Financial flexibility will be key, and the bold will find opportunity in disruption.

Anton Pauw
Hewlett Packard Enterprise

twitter.com/hpe
linkedin.com/company/hewlett-packard-enterprise
hpe.com