REDMOND, Wash., Dec. 1, 2003 — Businesses take investments seriously. Just ask Joe Giegerich, president and CEO of GigWerks, which specializes in administering and coordinating IT infrastructures for small and medium-sized businesses in the construction and food services industries. Or ask Bob Wyllie with Hansen Information Technologies, a leading provider of enterprise resource planning (ERP) solutions that are customized for local government organizations.
Both say that even when a customer has identified a means for investing in technology that will deliver dividends in the future, the initial investment can be a challenge to finance or cash flow.
With the goal of helping customers overcome these challenges while also offering them a way to invest more strategically, Microsoft Business Solutions and Microsoft Capital, a wholly owned subsidiary of Microsoft, launched Total Solution Financing, which covers hardware, software, implementation and related services. Total Solution Financing is available through Microsoft Certified Business Solutions Partners.
Originally made available to Microsoft Business Solutions’ U.S.-based business partners in 2002, the program’s momentum has driven its expansion into Germany, the United Kingdom, Belgium, the Netherlands and Spain. And today, Microsoft Business Solutions is launching Total Solution Financing in Canada.
“The purpose of this program is to help businesses make more strategic IT purchases by easing cash flow constraints,”
says Dave Kaminski, general manager of worldwide financial services, Microsoft Capital.
“So far, interest in the program has exceeded expectations, with more than double the number of customers using the program than originally anticipated.”
Interest rates are determined based on the size of the purchase and the credit-worthiness of the customer. Typically, financing plans offered by the program run for 36, 48 or 60 months. The financing agreement minimum is US$10,000, with additions to existing agreements available in increments of $5,000.
Total Solution Financing covers all costs associated with Microsoft Business Solutions’ implementations; including other selected Microsoft products, such as Microsoft Office XP and SQL Server, as well as hardware and implementation costs.
Lynne Stockstad, general manager, global solutions, Microsoft Business Solutions, notes that input from business partners drove the formation of Total Solution Financing.
“We surveyed partners to find out what their specific needs were,”
she says.
“What we heard from them is that cash is key for small and midmarket businesses. Ultimately, what Total Solution Financing does is help customers invest in technology that delivers long-term benefits that help their businesses succeed.”
Reducing the initial cash investment also allows small and midmarket businesses to make smarter technology investments.
“Investing in technology can be difficult for a small or midmarket business, but giving customers the option to spread the expense out over three years can make the investment much more manageable from a cash flow perspective,”
Kaminski says.
“Businesses using Total Solution Financing can purchase the solution and implementation that’s best for them. The solutions can be inexpensively customized and deployed, so over the long haul, business benefits are realized and the investment really pays off.”
Putting Total Solution Financing to Work for Customers
Joe Giegerich of GigWerks says cash-flow management is a key issue for his customers.
“As a reseller, it’s my responsibility to help my customers understand the significance and importance of IT,”
he says.
“Total Solution Financing allows my customers to really take advantage of innovative technology in order to improve the way they do business in a way that works best for them. And it eliminates what can be a burden by spreading payments out over a period of time.”
When explaining the benefits of financing to his customers, Giegerich often asks them to think about their cars.
“When do you stop paying for your car?”
he says.
“The answer is when you stop driving it. As is the case with automobiles, paying for technology as you go means you can purchase something more advanced without breaking the bank.”
Giegerich says that Total Solution Financing is a particularly good fit for small and medium-sized business in the construction and food service industries the markets GigWerks’ specializes in.
“There are a lot of similarities between the two industries in terms of where they are in the IT cycle,”
he says.
“During the heyday of the mid- to late-1990s, when technology investments really took off, these businesses were out-priced and the missing piece was financing. Total Solution Financing is a great resource for reaching this sector.”
So far, Giegerich says the program has proven helpful to his customers. A professional employment organization recently purchased Microsoft Business Solutions-Great Plains and had it integrated with an industry-specific solution. As a result of the convenience with which the technology was purchased and deployed, Giegerich says he’s finalized a deal to sell them 300 Microsoft Business Solutions CRM licenses.
“Overall, working with Microsoft Capital has been a very good experience,”
he says.
“The program is well managed, there is a high level of execution, and they are always very responsive, which isn’t always the case with financing programs.”
Great Potential for the Public Sector
When Bob Wyllie of Hansen Information Technologies heard about Total Solution Financing at Microsoft’s Worldwide Partner Conference in New Orleans, he was in touch with the Total Solution Financing team in 10 minutes. Hansen’s specialty is providing enterprise resource planning (ERP) solutions for the public sector, primarily local governments. Along with Hansen’s suite of software products for government, the company uses Microsoft Business Solutions-Great Plains and Microsoft Business Solutions-Navision to create solutions for city and county governments. It also utilizes Microsoft CRM along with their modules to assure the
“C”
in CRM means citizens.
“With a program like Total Solution Financing, I anticipate being able to sell to organizations with budget challenges, showing them the advantages of accomplishing multiple objectives from a priority list by paying for the investment over time,”
he says. Wyllie adds that a financing option is particularly attractive to the public sector.
“Cities are spending public money, so there has to be an assurance that the investment isn’t a boondoggle and all the needs of the citizens are addressed.”
Financing, he says, adds value to the investment by spreading it out.
“When it comes to local government, it’s not uncommon for a water department to win budget dollars for systems improvements one year, while other departments have to wait for their turn because of limited funds,”
he says.
“With financing, our customers can stay within their budgets and spread the investment around so that more applications can be addressed as their needs are identified.”
Total Solution Financing Tailored for Financing Needs Today and Beyond
Stockstad says that Microsoft Business Solutions developed Total Solution Financing with the needs and challenges of its business partners and their customers in mind, and that she is pleased with how the program has been received thus far.
Simplicity, says Kaminski is key.
“There is a one-page application, and everything is included in one package so that businesses don’t have to make multiple contacts with multiple parties,”
he says.
“We’ve also taken several steps out of the application process, and we’ve implemented more direct channels of communication. Overall, we’ve made it as convenient as possible.”
The process can also be a quick one.
“If the total amount to be financed is $100,000 or less, and the business has a rating with Dunn & Bradstreet, we can usually turn the request around in one business day,”
he says.
“I am pleased with how Total Solution Financing has gotten off the ground. I’ve had several business partners approach me to tell me how much they like the program and how it helps them better serve their customers.”
Kaminski says that Microsoft will continue to make adjustments to the Total Solution Financing program based on feedback and input from business partners and their customers.
