Why the financing must match the business, and not vice versa
In the face of rapid digitalization, companies are under increasing pressure to be flexible and adaptable. Structures and processes also change, and the departments have far greater input in capital investment decisions. Financing models that may have been suitable 20 years ago have become obsolete. Lean processes and customized billing models are key – they give the finance department the flexibility that it would like to offer its colleagues in other departments.
Turning these three decision-makers into a single powerful unit is one of the key challenges that companies face. This is where being agile has its benefits – it involves not only optimum collaboration on innovation and manufacturing, but also agreement on how to finance them. That is why companies need modern, agile financing concepts, not the term loans of yesteryear.
There is always a certain amount of risk involved with innovation, and risk is the treasury department’s natural enemy. With standard financing concepts, it is rarely possible to strike a balance between these attitudes to risk. Instead, new approaches can provide a long-term boost to innovation. One example is ‘try and use’, where equipment is supplied with a short-term exit option in case the project does not work out.
Having a customized funding concept for each project is only possible with total transparency and maximum control. This is unthinkable without a powerful, comprehensive tool for the technical and commercial management of all contracts and services, both inhouse and external. TESMA® is the answer to this.
To find the best financing available, companies must be able to compare the market and draw on experiences from a wide range of projects. Only few companies are able to do that. That is why a strong partner that is able to work with the CFO, CIO, and auditors on an equal footing can provide a real competitive advantage. But only if this partner is independent and works in partnership with, not against, the customer.