Sapan Jain – Country Manager, IBM Global Financing

How do you see the Indian SME sector and the role of IGF in their enhanced growth?
SMBs want the same thing as large enterprise clients: value and innovation. They are also facing the same challenges as the larger enterprises. What they lack are the resources to address those challenges. With the economy starting to rebound, small and mid-sized companies are central to the forthcoming recovery and this is the perfect time to consider new and innovative IT investments to help the businesses grow. IBM Global Financing (IGF) is the largest IT lender in the world, with operations in more than 55 countries and a client list that includes more than 90 per cent of the Fortune 100 as well as organisations with as few as ten employees.
IGF has been operational in India since the last ten years and has been serving clients of all sizes across the industry. IBM Financing Advantage, from IBM Global Financing, offers credit-qualified mid-sized companies’ access to affordable leases and loans for a complete IT solution for IBM and non-IBM hardware, software and services. With affordable low rate financing at competitive rates and flexible terms, these can help the SMEs acquire the solution they need rather than the solution they can afford since costs can be less while preserving cash for core business needs.

What is the role played by IBM Global Financing? How does it benefit the Indian enterprises?
As one of the world’s largest IT financiers, IBM Global Financing has an asset base that, were it a bank, would place it in the top two dozen US commercial banks, delivering financial services to over 1,20,000 customers in more than 55 countries. We provide customizable lease and loan offerings to all kinds of companies irrespective of their size. Small and medium businesses and large enterprise alike can acquire business and technology solutions through IBM Global Financing to create enhanced value and drive profits. Our offerings are designed to enable IT organisations to operate in a new economy and mindset that demands high value, transparency, and proof of return on investment. Financing provides access to alternative sources of capital from a stable partner, IBM, thereby addressing capital asset management, business resiliency and flexibility needs.

By providing total financing solutions to credit-qualified clients, from financing green data centres to offering environmentally-compliant disposal of retired IT assets, IBM Global Financing can help support a company’s green strategy in a way that cuts costs, increases cash flow and better aligns upfront costs to anticipated project benefits. Additionally, IBM Global Financing can facilitate smart financial decisions at every stage of the IT lifecycle - from the planning phase through equipment disposal. The customised financing options can provide enterprises the financial agility to capitalise on new opportunities and accelerate business transformation, while lowering the costs. This can help enterprises stretch tight budgets, innovate smartly and position their business for faster growth.

What is the nature of IBM’s financial services’ business operations for IT leasing?
IBM Global Financing has three business lines: a) Client financing which focuses on offering leases and loans for IT procurement to IBM end clients for direct or indirect transactions, b) Commercial financing which deals in short-term financing (30 to 90 days) to Tier 1 channel partner for IBM or some selected vendor partners, and c) IBM global asset recovery services (GARS) which offers attractive buyback and most efficient, all-green disposal solution, using scalable, reliable processes. GARS complies with applicable local environmental and disposal regulations and includes buyback at agreed prices, disposal of unusable equipment and data security. Using total disk overwrites, GARS may recover, recondition and reconfigure usable IBM equipment as IBM-certified used equipment which offers a great alternative solution for many a business and IT situations. As one of the world’s largest IT financiers, we offer leases and loans for IT assets (hardware, software and services) for IBM corporate clients for terms ranging from nine months to 60 months contingent to successful credit assessment by the IBM Credit Department.

Are Indian enterprises smart enough to use the potential of IT in a creative and prudent way in their companies? How is IGF helping them on their path of innovation?
All over the globe, creative leaders are re-architecting management systems so that they are based on inclusion, collaboration and transparency. This has never been more important as we work to make our systems instrumented, interconnected and intelligent. India is no exception. With the rapid pace of business today, organisations need more from their investments than ever before — more accountability, more agility and quicker return on investment. A trusted partner like IBM Global Financing can help improve the cash flow and deliver better TCO and ROI for organisations of all sizes. Certainly, India has fast emerged as a tech power in the recent past. The growth in Indian economy, right infrastructure, technology spurt and the presence of a large talent pool is driving this.

Innovation is the nation’s single greatest driver of competitive advantage, productivity, economic growth and societal change. It is important to keep the momentum up, since by innovating we raise the standard of living for all. There is a need to ‘think collaboratively’ and in a multifaceted manner, as this determines who wins and who loses. Innovation begins at the intersection of invention and business insight – and is made valid only when it results in significant business and societal value. While we have led the world in terms of patent leadership for the past 18 years, are a leader in the open source movement and are engaged with clients around the world to transform their businesses through the application of smart information technologies, what makes us proud is the value we add to business and society.

Can you elaborate a bit on IBM Global Financing’s approach in providing complete financing solutions? And how does it differ from a bank’s finance?
Financial markets are still shaky and uncertain, liquidity is still tight, and the funding cost can be volatile. While companies are looking for new financing sources and quicker ROI, financing institutions are averse to unsecured loans. Many traditional sources of credit are reluctant to fund IT, seeking additional collateral against loans and financing deals. Besides, banks and brokers generally do not possess sufficient IT industry knowledge to make accurate assessments of fair market values, and may cover their risk with increased financing rates. Banks offer relatively simple loan finance that is secured on the basis of a client’s assets. However, IBM Global Financing is more than a bank as it delivers comprehensive, integrated, customised and affordable solutions to unique IT needs. This helps companies better manage their cash and harvest better ROI while keeping the competitive edge.

What is the role of IT CFOs in making an enterprise smarter? 
A CFO can make the enterprise smarter in an era of increased uncertainty.  According to IBM’s 2010 CFO study, mounting cost pressures, coupled with the urgent need for more predictive intelligence and greater transparency, are prompting CFOs and their finance organisations to do more than just excel at core finance activities. Rather, they must become experts at providing vital inputs to enterprise strategy and help enable faster decision-making by integrating information and standardising data and processes across the organisation. In many instances, financing IT rather than cash purchase can make sound business sense. It relieves the pressure on cash flow and enables an IT investment strategy that adapts to changing business circumstances easily and cost-effectively. Besides, financing supports a disciplined approach to prioritising resource allocation, including cost reduction efforts.

What kind of role does IGF in driving a green planet?
The green movement is blue about the IT industry: too much power, too much heat and way too much landfill. With short technology cycles contributing to the constant replacement of older systems, disposal is a genuine problem. IBM Global Financing offers fair market value lease enabling customers to enjoy better total cost of ownership (TCO). Also, GARS offers most efficient, all-green disposal solutions, using scalable, reliable processes that prevent re-use and recycling capabilities.

Do you expect to sustain the kind of growth momentum that you are currently seeing in India?
We see strong growth momentum in the Indian market as clients across the board are looking for trusted and financially stable partners who can provide complete solutions, help enterprises stretch tight budgets, innovate smartly and position the business for faster growth. They are looking at integration and the best of technologies to gain competitive edge. Indian organisations are focused on green IT, operational efficiency, accountability, agility and quicker return from investment. By providing total financing solutions to credit-qualified clients, from financing green data centres to providing environmentally-compliant disposal of retired IT assets, we can help support the company’s green strategy in a way that cuts costs, increases cash flow, and better aligns upfront costs to anticipated project benefits.