Company insight > Asset finance & leasing

Finance Director Europe | www.the-financedirector.com58

N o matter how they differ in terms of size or business models, enterprises across Europe share a familiar challenge. A growing wave of

technology innovation is sweeping the continent and creating opportunities to improve efficiency, reduce costs and serve customers with exciting new services.

Unfortunately, continuing economic challenges are forcing prudent senior executives to maintain tight control on budgets, which makes funding for new technology investments scarce. The question is: how can organisations capitalise on technology advances to compete and grow while addressing budget realities?

The answer for a growing number of enterprise leaders lies in creating flexible financing models that augment traditional IT budgets. The key players in this solution are chief financial officers that play strategic roles in finding flexible funding solutions and the right technology partners that not only deliver industry-leading

technologies, but also offer expertise in funding solutions and financing tools.

Disruption reignsTechnology disruption is the new normal in Europe today. The catalysts are four game-changing trends: � Cloud computing − organisations can dynamically

provision IT resources to business units as needed to address spikes in demand or new opportunities. Business leaders no longer have to wait weeks to procure and implement new hardware and software.

� Mobile computing − agile mobile applications and hardware deliver enterprise data and services to staff members and clients anytime and anywhere they’re needed to increase efficiency and improve customer service.

� Social media − by engaging customers through familiar social networks, enterprises maintain consistent communications and higher levels of customer experience.

Enterprise leaders face a delicate balancing act − how to quickly capitalise on the benefits of today’s innovative technologies while simultaneously addressing the realities of ongoing budget constraints. Stephan van Beek, EMEA director of marketing and business development at Oracle Financing, explains how creative funding models provide the answer.

Flexible funding models fuel innovation

Oracle Corporation, a global provider of hardware and software solutions, has its iconic headquarters in Redwood City, California, US.

Company insight > Asset finance & leasing

Finance Director Europe | www.the-financedirector.com 59

� Big data − sophisticated solutions for managing and analysing all types of data enable organisations to understand new business opportunities faster than competitors and quickly address emerging problems before they develop.

Together, these disruptive forces are creating significant opportunities for cutting costs, increasing efficiency and delivering innovative services − but only if line of business managers can quickly capitalise on these technologies. Unfortunately, IT budgets at many organisations today provide little extra funding for new technology projects. The result is that, in some cases, line of business managers eager to implement a new service or capability may find they have to invest money from their own budgets, rather than do without an innovation because the IT department can’t pay for it.

The strategic CFOGiven these challenges, how can organisations find the funding they need for innovation, while balancing cost constraints? CFOs are on the front lines of these powerful forces, and increasingly these executives are helping to drive change throughout their organisations due to their ability to bridge activities between the IT department and the line of business units.

Their expertise in financial matters further enables them to help find new ways to fund technology innovation outside of the traditional IT budget. With creative funding models that take advantage of all available tools and resources, enterprises can make strategic IT acquisitions that align project expenses with the organisation’s business objectives and internal processes.

Another key component for developing customised and innovative funding strategies is a technology partner that understands the funding challenge enterprises grapple with today and that has unique financial resources for addressing the challenge. With help from the right partner, CFOs can

benefit from investment vehicles that fund transformational technologies outside standard IT budgets. Some savvy enterprises are working with their technology vendor to create multiyear funding plans that leverage expected future revenues or cost savings that result from an investment in innovation.

For example, financial experts within Oracle Financing are adept at helping European enterprises balance modern business goals with new IT business models and create plans for optimising investments in technology based on the value a new project will deliver to the business. One funding option is a self-funded, multiyear implementation plan with phased-in upgrades across all operations. Using this system, each operating unit is able to align the cost of access to new technology with the practical benefits they expect to receive.

While each funding strategy should be customised to the unique needs of individual organisations, the process of creating the right plan typically requires four key ingredients:

1. Experts who can work with CFOs, business managers and IT executives to analyse near and long-term IT goals to create a framework for determining the best funding model.

2. Advisers who have extensive expertise in investment best practices for both software and hardware solutions. This expertise is essential for helping customers determine whether the best funding approach is one that will draw from the operational or the capital budget.

3. Choice aligned with customer preferences in how they want to use, locate, manage and acquire technology. The right partner will enable customer choice with a wide range of financial solutions designed to optimise a client’s technology acquisition.

4. Business partners with the ability to help enterprise leaders determine the best acquisition strategy. For example, some solutions may be funded best through working capital, while others will benefit from payments made over time with leasing contracts that can bring costs in line with the benefits gained from the new technology.

A roadmap for successInnovative technologies don’t have to be disruptive to business plans for funding models. CFOs just need a technology partner with a full portfolio of innovative solutions, a long history of helping customers develop creative financial strategies for new projects and keen understanding of today’s economic realities. Together they can determine the best roadmap for technology investments and a funding model that promotes success.

Further informationOracle Financingwww.oracle.com/financing

Enabling innovation

What progressive enterprises need

What Oracle Financing delivers

The flexibility to fund IT investments as a cost of sales, or as a percentage of revenue

Multiyear investment plans aligned with growth projections

Options to pay for IT modernisations as benefits from investments accrue over multiple years

A plan for consistent payments over time based on the additional revenues resulting from new investments

Tailored licensing agreements for new software

Expertise in determining the right licensing model for new business requirements

Financial analysis of the various acquisition options and how they may impact key corporate metrics

Deep experience in how technology and the latest innovations benefit business operations and an understanding of financial best practices to identify the right funding model for each situation