Strategic subscriptions: Preparing for a flexible future with IT as-a-service

There is only so much that leaders can ‘plan’ for the future, which is why businesses are looking for new ways to mitigate risk, particularly for significant investments. As-a-service consumption models are rising in popularity for buying enterprise IT, providing more adaptability, flex and financial security than traditional capital expenditure purchases.

The as-a-service model has been booming in the last decade, first and foremost because of the value it offers in taking away the burden of management. In the past, organisations may have felt unable to invest in new technology simply because they didn’t have the resource or knowledge in-house to manage it.

Shifting the responsibility of operation back to the supplier, suited everybody: it increases the likelihood of investment, supporting higher growth prospects for suppliers, but it also gives customers access to the innovative capabilities they want, without the hassle of day-to-day management.

Yet as the pandemic hit, Deloitte, along with other commentators, predicted that as-a-service would increasingly be appreciated for its other core trait: “as key to companies staying resilient and nimble in these uncertain times.” In fact, by Q2 2020 at the height of the pandemic, many tech companies were driving higher revenues through as-a-service than they were through traditional product sales. By Q4 of 2020, new research showed that 75% of businesses ran more than half of their enterprise technology investments through as-a-service agreements.

One of the core reasons why as-a-service is rising as a means to weather change, is the financial benefits it offers. As-a-service models shift costs from capital expenditure to operational expenditure, easing the burden on businesses and their leadership teams to find budget for a significant spend at any one time.

Meanwhile, fixed-payment contracts, which are one option for as-a-service models, allow understandably nervous finance departments to better plan for the future, with a clearer view of month-to-month planned expenditures. The stable, regular costs also reduce the complexity of balancing outgoing finances in unpredictable time.

As-a-service consumption also crucially helps to mitigate risk. In a strained economic climate, organisations across the world are looking to tighten their belts. A large capital expenditure into an innovation may well be viewed as a risk that a company can’t afford to make, particularly if leaders aren’t able to guarantee its success or uptake with any certainty.

As working habits are changing so rapidly, it can be challenging to predict how workplace requirements will evolve and therefore whether technologies needed urgently right now, will still be in three months’ time. As an example, remote working was mandated for a large proportion of 2020 and into 2021 across Europe, creating many unexpected demands for specialist technology. While these may have seemed like temporary conditions, many organisations have now committed to long term hybrid working environments; yet the exact balance and rules around these set-ups are still in flux.

As-a-service solutions allow leaders the flexibility to meet fluctuating needs. Where demand is evolving significantly, per-use contracts can help with rapidly changing environments where businesses are still working out what their need levels are. These subscription-style services are much easier to switch on, alter and opt out of. Leaders can have peace of mind that they can adjust their hybrid working set-up and tweak their capabilities to match, by simply scaling or altering their as-a-service investments.

Before the as-a-service model came into common use, IT leaders’ role in researching and shortlisting enterprise technologies was more arduous. Given the weight of the financial decision, an IT team typically spent a huge amount of time investigating the specifications of different products. The onus was entirely on the business to make the right decision and be certain they could manage and maintain the technologies in-house. The extensive time spent on this process meant that IT had a reputation as a cost centre.

Busy IT leaders are now faced with the challenge of adapting their traditional work environments to new challenges like hybrid working. They have even less time to dedicate to this procurement process, and at the same time, even greater and more complex requirements to cater to.

With as-a-service solutions, this procurement process is less pressured, as the responsibility for the performance and maintenance of the solution sits with the supplier. Organisations are simply buying the capabilities the technology delivers. Business leaders can be assured that IT teams are investing less time and resource on the complex management of the devices and technologies, and more time on ensuring the solution delivers the return on investment and is being used by the workforce in a way that capitalises on all its benefits.

The shift to hybrid working over the past years has shown the importance of being able to adapt quickly, acquiring or scaling capabilities to support shifting requirements. As-a-service solutions represent an opportunity to invest in the technologies which truly help an organisation enhance their offering and progress their future without having to worry about whether or not they have the ability to manage them. Combined with the financial security that as-a-service models often deliver, and the flexibility to adjust services as needed, these models provide a smart way for leaders to mitigate the risk of a fast-changing landscape.