ANALYSIS: ICC Expands to IGF -- A New Direction for IBM Global Financing

By Sam Albert

Recently I had the opportunity to meet Joe Lane, the new General Manager of IBM’s Global Financing unit, a dynamic business leader, who is bringing an expanded vision to IBM, which I discovered, per Mr. Lane, is "the world’s largest provider of IT financing and leasing solutions."

IBM’s worldwide financing organizations are now collectively known as IBM Global Financing. The name change better reflects the global support which IBM Global Financing provides to its customers and Business Partners. In fact, it is consistent with Lou Gerstner's desire to make "International" Business Machines truly "global." (In the past IBM's country management did "their own thing," paying lip service to Armonk.)

IBM Global Financing now delivers financial services to customers in 42 countries worldwide with an asset base greater than $40 billionthat’s nearly half of IBM’s $86 billion assets! In 1998, IBM Global Financing initiated $17 billion in new financing originations supporting commercial and government customers, and $22 billion in new originations with IBM Business Partners.

IBM Global Financing appears to be more flexible, offering attractive and competitive leasing financing solutions to make it easier to acquire hardware, software, and services from IBM and other vendors.

Total Solutions Financing

When talking about his plans for ’99, Lane believes that his mission is to help decision-makers from businesses of all sizes recognize the value of financing as a strategic business tool. He told me that IBM Global Financing is the "undisputed leader in information technology-related financing,"

IT financing, he says, is not just limited to hardware but includes software and services as well. When customers want to implement an e-business solution or conduct Year 2000 testing, it’s not just the hardware that needs to fit into their budget.

I firmly believe IT financing and leasing will become even more important as a strategic way to compete globally, particularly with the spread of the Internet. The Internet implies new e-business applications, new hardware, new communications devices...and IBM wants to help its customers move to e-business by being a total solutions provider, including the financing to acquire all of the piece parts.

It’s also important to note that IBM Global Financing will finance all IT-related acquisitions – including non-IBM products, and other providers’ software and services. Furthermore, IBM Global Financing offers the flexible payment structures to suit customers' needs.

Here are some other offerings that presage growth for IBM and potentially other companies who adopt some of these versatile ideas:

IBM Global Financing’s Millennium Financing offer, which helps customers with their Year 2000 testing needs. Here customers can obtain as low as zero percent financing on IBM midrange products, and discounts on S/390 and associated storage products, installed before June 30 '99.

IBM rental programs, a low cost short-term alternative to purchasing with terms as few as three months, are ideal for short-term testing needs. Customers can rent the AS/400, RS/6000 or S/390. Since new equipment might not be a requirement for testing, customers can rent high-quality, refurbished equipment from IBM Global Financing for this purpose.

e-Business Tools for Business Partners

Last year, Global Financing provided over $22 billion to the Business Partner Channel and this year, has available an additional $25 billion. The company has recently introduced major enhancements to its Internet Tools. Using Internet Tools, Business Partners can open and close leasing and financing deals in just minutes rather than days. These tools are real time savers for Business Partners and provide a significant competitive advantage.

Small Business Offerings

To help IBM small business customers, IBM Global Financing recently teamed up with Fidelity Leasing, Inc. to offer SuccessLease, a program geared for small business owners. Through the program, small business customers can lease as few as one or two PCs.

Joe Lane told me he has other innovative thoughts he is developing to further Global Financing's support for customers. As you can see, there is a lot going on with the area IBM used to call ICC, the IBM Credit Corporation. If you haven't looked at financing as a strategic tool to acquire IT, protecting yourself from obsolescence while preserving budget flexibility, then you are missing out!

Sam Albert is president of Sam Albert Associates (Scarsdale, N.Y.), a consulting firm that specializes in developing strategic corporate relationships. samalbert@samalbert.com.