How Payment Over Time Models Are Paving the Way for Innovation

How Payment Over Time Models Are Paving the Way for Innovation

Chris Labrey

Managing Director UK & IRL at Econocom

Views 1022

How Payment Over Time Models Are Paving the Way for Innovation

18.05.2017 10:15 am

It wasn’t too long ago that consumers would buy products so that they could own them. Just think about the mobile phone market ten years ago: you would buy the handset outright and then top it up with credit accordingly, and the best thing about it was that it was yours.

However, these views of long-term ownership have now shifted quite dramatically. Instead of saving up for significant one-off payments, consumers are now more accustomed to a usage model, which involves making smaller payments over a set period of time — even if it means that they don’t actually own the product for that duration. Fast forward to today and almost everyone purchases mobile phones on rolling contracts that are usually paid for over one or two years. 

As we grow to become even more of a ‘renter society’, we are seeing the usage model transcend the consumer market and infiltrate various B2B industries, and that includes systems integrators. This is an area that’s renowned for its tendency to stick to the antiquated models of operating that they’re used to for the sake of convenience. But this is holding back businesses in a major way when it comes to innovating and pushing the industry forward. Plus, because it is a consumer-led market, and consumers’ spending habits are changing, integrators simply have no option other than to adapt the way they take their solutions to market if they want to be successful.

Before this model grew to become so popular, systems integrators would typically work with numerous suppliers to fulfil different needs. For example, they might have one supplier for hardware, another for services and one more for software — not to mention everything else that is often required within this industry.

Now, however, with a new model coming to the fore, businesses are looking to minimise the number of suppliers in their chain. Ideally, they want to be working with one supplier who can deliver everything that’s required for successful operations. If the procurement process can be simplified in this way, and a ‘single service payment’ approach is applied, systems integrators themselves can benefit in a huge way from being able to target a much broader range of customers with a model that is attractive and appealing to modern-day requirements.

The other benefits of adopting such a model are plentiful. First, there’s the obvious one in that there is no significant one-off payment to make; instead, the cost is split into smaller ‘chunks’ that are paid of a set period of time. Secondly — something that is perhaps most important for the systems integrations sector specifically — it allows businesses to acquire the latest devices, systems and products with ease, allowing them to position themselves as industry leaders in innovation and cutting-edge technologies.

What’s more, thanks to the rolling contract, they can continue to upgrade their systems in-line with the latest trends, and can future proof their operations for years to come. This approach allows businesses to match the investment costs with the business benefits over a considerable period.

If systems integrators are to maximise the benefits of a single service payment model, they cannot afford to move slowly. Customers are demanding these models today,and every day that goes by without being able to offer them what they really want is a wasted opportunity. By working with a trusted partner and building models that align to our renter society sensibilities, the systems integrators industry will finally see the new era of innovation and competition that has been necessary for so long.

 

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