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Software isn’t as easy as it looks

When it comes to IT investment, many SMEs view software as somewhat inferior to, or less valuable than, hardware. These businesses allocate large portions of their IT budgets to purchasing tangible hardware products, often neglecting software investment in the process.

However, contrary to popular belief, software is just as important as IT hardware. Businesses must remember that quality software is needed to run their hardware, so it should be viewed as an equally worthy investment.

So, why do so many businesses prioritise hardware? Well, firstly, when businesses purchase hardware, they have visible proof of investment. Within many companies, IT managers find it easier to get approval for buying hardware, as those in control of the budget often want to see physical proof of where the money went. There is also a common misconception that software is ‘simpler’ to create: if software such as apps can be created from a bedroom, then why does it deserve such a significant investment?

Software includes everything from operating systems and application servers, to databases and apps. In reality, the software market is extremely sophisticated and complex; programs require a huge amount of time, money and effort to create.

Not making timely investment in software could negatively impact your business. For example, delaying necessary software upgrades and using outdated systems will inevitably result in increased costs in the long term. What’s more, using older software could affect staff productivity and pose a security risk.

There is no doubt that software delivers good business value. Companies must understand that business value is created through investing in exactly what their business needs, and not just cheaper alternatives.

Companies often struggle securing a finance package for their IT investments, as many funding houses only provide financing for hardware and not the intangible aspect of these investments. Syscap, however, offers both hardware and software funding, allowing you to purchase the technology you need today. Not only that, but Syscap can also provide funding for subscription services, support and maintenance, training and installation. This allows businesses to finance the full IT solution, spreading the cost over time and maintaining working capital.

Click here to find out more about the benefits of financing your next technology solution.

Late payment is a fact of life but does it have to be?

Cash flow is again top of the agenda for small businesses with a new study showing that the majority of businesses make late payments to suppliers. The Mastercard study found that a full 57% of businesses had deliberately delayed payments. You can read the full study here.

Despite 90% of businesses acknowledging that suppliers should be paid promptly, nearly three quarters of businesses admit that late payments are a fact of life. Cash hoarding has far-reaching impacts throughout the supply chain as many small businesses will know.

In recent years, the operating environment for has been difficult for all businesses. In the IT world in particular, IT resellers have been squeezed not only by the constraints on bank lending but by SaaS innovators which have changed customer perceptions of how to pay for software. When combined with a culture of late payments that seems to be growing, it creates particular challenges for smaller vendors and resellers.

Syscap has been providing IT finance solutions for nearly 25 years. We have worked closely with our partners and clients to respond to some of these challenges. It led us to launch Support Funder earlier this year. It allows vendors and resellers to receive upfront payments for annual revenues and removes the need for monthly invoices or administering direct debits.

We also understand that for many resellers the most important part of their business is the services and maintenance that they sell alongside the hardware and software. So we have structured the product to include intangible services. If you would like more information about Support Funder, contact us.

At Syscap, we often talk about our business being innovative and dynamic – but innovation is only relevant if it meets a customer need. To use a familiar turn of phrase, “Necessity is the mother of all invention”. Support Funder is the invention but the necessity is the culture of late payment which seems to pervade the business environment.

We often hear from our channel partners about how they have had to offer monthly direct debit options because a competitor is prepared to do it or resellers who are spending time and effort chasing invoices – even for relatively small amounts of money.

To return to our analogy, cash flow is the necessity and Support Funder is the invention. But Syscap and our channel partners are working together as proud parents in this situation. We hope that you keep giving us feedback, telling us your concerns and sharing experiences. It drives us to create better products that meet your needs. We look forward to hearing from you.

Philip White, CEO