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Cash flow matters: technology sales and the consumption model

March 23, 2022

Cash flow matters: technology sales and the consumption model
 
powered by Sounder

The whole world seems to be operating on a consumption model right now.
 
The consumer is making more and more demands on businesses to only pay for what they’re using, which to be perfectly honest, seems like a reasonable request.
 
Have you ever wondered how a consumption-based technology sales model could benefit your business? What are the pros and cons? What do you need to know before diving in?
 
Shelby Skrhak talks with Ingram Micro’s Dan Mandy and Melanie Delvalle about:
 
  • Why cash flow is king
  • Why a consumption-based technology model could be the perfect solution for your business
  • Success stories from Huntington
  • The uniqueness of this type of offering in the financial services industry
  • Where they see technology going in the next year

Why the shift?

The reasons behind Huntington’s shift to a consumption-based model were pretty straightforward.
 
First, their consumers were intrigued by the financial concepts that a cloud-based model would bring. For a company that dealt heavily in on-premises data center technology, this was a unique driver.
 
Second, there were changes in how traditional leases were viewed from an accounting standpoint. The standards in ASC 842 dictated that leases could no longer be off the balance sheet, meaning they were no longer an expense.

So, Dan and his team decided to build a different type of agreement, different than a lease and different than a loan.
 

How Huntington helped

The name of the game for their customers was flexibility and customization.

They aligned their offering with the end user in mind to enable them to choose the technology solution that made the most sense for them, putting a comprehensive financial solution around that technology.
 
The benefits were threefold:
 
1. Each department knows how much of the cost usage is applied to them, because consumption provides a variable billing model tied to underlying equipment usage.
 
2. It was perfect for clients looking to operationalize their expenses.

3. It was a great solution for customers seeking an alternative to traditional leases and loans. It provided them with more flexibility and customization options that traditional leases and loans just couldn’t.
 

How Ingram Micro helped

When you think about your relationship as a managed service provider or reseller, you know how meaningful cash flow is to your business. And it’s just as important to understand how much value you can provide by understanding your client’s cash flow needs, and what they’re trying to drive with the technology offerings they’ve chosen.
 
A consumption-based model is a great way to give your customers value from the technology and cash flow standpoint (and a bonus: as a reseller, you’re still paid in full upfront).
 
For more information, contact financialsolutions@ingrammicro.com
 
To join the discussion, follow us on Twitter @IngramTechSol #B2BTechTalk
 
Listen to this episode and more like it by subscribing to B2B Tech Talk on Spotify, Apple Podcasts, or Stitcher. Or tune in on our website.