Technology is changing the world rapidly and organizations all over the world are transitioning towards innovation. Digital adoption has taken a quantum leap at both the organizational and industry levels, pushing enterprises to evolve and embrace the latest innovations so they can sustain and thrive in a cutting-edge environment.
This dynamic change in the overall ecosystem has pushed industries to be faster, more frugal and more flexible innovators across all domains. However, organizations are struggling to innovate unique products and services, adopt new ways of customer engagement and transform their internal operations.
These challenges have been exacerbated by low global demand, non-performing assets (NPAs), asset transmutation and the ongoing global economic downturn. This economic blow has had huge implications on cash flows, liquidity, CAPEX-based assets, credit ratings and optimization of resources, hindering businesses from making ends meet. However, there is a quest to get this back on track.
Organizations are consistently under pressure to adopt the latest technologies to effectively manage the remote workforce and self-fund innovations. Hence, liquidation is a significant enabler to overcoming multiple barriers to procure and unlock value from niche technologies and embrace digital transformation. There has been a resultant paradigm shift from a CAPEX-based business model to OPEX, where organizations are willing to transfer the ownership to the service providers, and hence fund the transformation.
According to Gartner, by 2025, at least 50% of enterprises will shift toward OPEX-based storage consumption models, compared to less than 10% in 2021.
Key drivers for asset monetization
Multiple market forces and challenges are driving the need for asset monetization, propelling businesses toward the hidden value of their assets. However, understanding these driving forces is crucial in comprehending the significance and relevance of financial engineering.
While working towards improving liquidity, organizations must focus on non-performing assets (NPAs) and how they can maximize the utilization ratio of the asset lifecycle. Since these assets are a liability in the balance sheet, most enterprises are looking for options to convert this into a cash flow.
Several trends are driving the asset monetization market, including:
- An increase in demand for cloud migration
- Digital transformation has become a prerequisite for niche technologies like AI/ML, IoT, etc.
- Sustainability and environmental, social and corporate governance (ESG) objectives
- Fierce competition among service providers resulting in innovative and improved services for customers
- Cash infusion in the system
- Need for capital optimization
HCLTech’s Cash4Assets: Empowering financial transformations
HCLTech’s Cash4Assets addresses the requirement of asset monetization and revolves around technology, finance and cost aspects. It is a comprehensive solution to help our customers generate cash from legacy assets and leverage innovative and flexible financial payment models to procure technology. And as a one-stop service offering, it covers the entire lifecycle, from consulting and advisory to implementation including people, processes, tools and technology.
Cash4Assets enables customers to:
- Leverage their existing CAPEX-intensive, underutilized NPAs and legacy technology to liquidate and maintain financial equilibrium
- Adopt newer technology with utility-based construct without disrupting cash flows
- Rent technology/assets based on seasonal demand
The offering includes:
- Asset purchase and leaseback
- Payment deferral
- Pay-per-use
- Certified pre-owned equipment
- Short-term rentals
- OEM parts upgrades
- Asset upcycling services
- Asset maintenance
The multifaceted benefits of Cash4Assets
Strategic asset optimization
Offers tailored strategies for asset monetization to ensure maximum returns
Quick access to cash
Offers businesses a strategic avenue to quickly generate revenue from underutilized or idle assets
Operations and maintenance cost reduction
Enables monetization of underutilized assets, and helps eliminate the costs of storing, insuring and managing these assets
Adoption of cutting-edge technologies
Helps businesses to leverage the cash flow generated through asset monetization in the acquisition and implementation of advanced technologies such as AI, cloud and Internet of Things (IoT)
A few use cases for asset monetization include:
- Disburdening of ownership
- Relieving capacity strains
- CAPEX to OPEX adoption
- Technology upgrades
- Short-term rentals
- Generating cash from non-performing/EOL/EOS assets
- Cloud migration and DC consolidation
- Sustainability initiatives
- Mergers and acquisitions (M&As)
HCLTech’s Cash4Assets catalyzing business success
We’re committed to designing bespoke solutions to address challenges related to financial vitality and managing legacy assets. Our one-stop asset monetization offering, Cash4Assets, provides sustainability assurance through proper asset disposal guidelines and standards, issuing Waste from Electrical and Electronic Equipment (WEEE) certificates to customers. This, in turn, helps organizations to focus on sustainability by gaining carbon credits.
We also offer Evergreen IT, where we purchase the assets from customers and take responsibility for refreshing those assets on the completion of their life. We ensure that the refreshed assets are better suited in terms of processing power, consume less power and result in overall savings through asset lifecycle management.
Furthermore, we help customers with the flexibility to buy the assets, leverage our IPs/frameworks and best practices and build true hybrid cloud services, which offer scalability, flexibility, agility, unmatched SLAs and uptime.
All in all, Cash4Assets is a game-changing approach to asset monetization. By partnering with global enterprises, we accelerate customers' digital transformation objectives through asset monetization propositions, financial engineering and payment mechanisms.
To learn more, please write to us at HCBU-PMG@hcl.com.
References:
https://www.idc.com/research/viewtoc.jsp?containerId=US44747919
https://www2.deloitte.com/us/en/insights/industry/technology/enterprise-it-as-a-service.html
