Advice for the IT manager on how to approach the money man – how to show the expected cash savings, what data to bring with you to your meeting and how to most convincingly present your case (communications tips).
Asking for energy-efficient IT equipment that can help businesses run more smoothly and give quicker access to data shouldn't be difficult. So why, then, do IT managers struggle to get funding for new equipment that will improve the performance of their business? A big part of the solution is financing, but there's another piece that many IT departments don't get right – the pitching itself.
In this piece we look at the benefits of finance leasing and how to convince your CFO to splash the cash!
The Real Benefits of Finance Leasing
When you purchase IT equipment outright, it has a typical depreciation period of five years. Leasing accelerates the effective tax-related life cycle, allowing you to keep your technology fresh. Your CFO probably knows this already but it's important you reiterate all the benefits of finance leasing.
Leasing helps companies avoid tying up valuable capital, which is particularly pertinent to companies that need to maintain relatively high liquidity. If you've previously purchased equipment you may have felt forced to continue using it – when you lease you're no longer tied to lengthy depreciation periods.
Another major advantage is that leasing is as good as cash when it comes to discounts, such as for early payment. This is why many companies choose to lease - it enables them to negotiate with suppliers as though they are paying cash.
Having up-to-date technology is critical in today's fast-paced environment – a mobile workforce needs fast, efficient equipment – mobiles, tablets, laptops as well as back office support including software, servers and systems to be able to handle the workload.
The Best Information to Give Your CFO
Packaging up your IT proposal to senior management can be tricky. Selling to a CEO is generally easier – most CEOs are positive, high energy, and able to see the possibilities. But selling to a CFO can be more difficult. CFOs are paid to see risk and to worry about cost. They're the classic roadblocks in your drive to improve your IT set-up.
Here are a few tips on what information to give the CFO and how to get their buy-in:
- Understand what they see as valuable: Every CFO has a slightly different way of looking at financial value. Before building a financial case, find out what's important to them and what kind and size of numbers get on the CFO's radar.
- Give them the hard data: CFOs want to see cost savings, backed with hard numbers and expressed in a way that makes sense to an accountant.
- Hammer home the benefits: Extra information from new systems helps make the case for budget flexibility.
- Include your model: Present a top-level summary, backed by a detailed financial report with solid, quantified benefits and supporting analysis. Give them a financial model so that the CFO can understand the assumptions surrounding the analysis.
- Provide measurement: CFOs want to know how the financial impact of the equipment will be measured on an ongoing basis and what actions you'll take if those benchmarks aren't met.
During your meeting with the CFO:
1. Set expectations: Let them know you'll present for the first few minutes and the rest of the session will be discussion-based – if they know they only have to stay quiet for a short time, they'll be more likely to do so.
2. Summarise up-front: When developing your intro slides, lead with what they really care about – total expenditure, over how long, and the cost of finance leasing over purchasing.
3. Allow them to drive (if they want to): After you present the summary, let them drive the conversation, and refer to your supporting slides as relevant questions and comments come up.
4. Rehearse: Before presenting, run through your slides with a colleague who you know will be honest. Ask for pointed feedback: Is your message coming through clearly and quickly? Is your data detailed enough? Are you missing anything your audience is likely to expect?
5. Use a sponsor: Your sponsor should be someone higher up in your own functional area. They'll be able to help you fine tune your presentation, understand the political realities and keep things on track during the meeting.
6. Check & recheck your numbers: Plan your data carefully and make sure it's completely accurate. Your CFO didn't get where they are without being able to tot up numbers in their head quickly.
7. Live by the "10/30 rule": If you're are scheduled for 30 minutes on the agenda, prepare just 10 minutes of material, the other 20 minutes for discussion.
8. Be prepared to improvise: Because the executives prefer a discussion, you need to be flexible enough not only to "let go" of your presentation, but also to get the conversation back on track if it strays – or worse, if things get contentious.
9. Give a synopsis of key information: Follow up with a quick email to thank the CFO for their time and consideration and reiterate the key figures – KEEEP IT SHORT!
10. Get a commitment: As a next step, get the CFO to write an email, attend a meeting or do something else visible to the rest of the company that will indicate the CFO is "on board" with leasing the new equipment.
How Can GRENKE Help?
GRENKE, a finance leasing specialist, is a market leader in the small-ticket IT market. They can support your business IT needs and help you really see the benefits of leasing over purchasing. To understand the types of items you can lease with GRENKE and for information on leasing instalments and contracts, contact GRENKE today.