Economic times are tough and one of the biggest problems for companies that need to buy critical technology is getting financing and protecting critical cash reserves. Banks and financial institutions are simply not able to reliably lend at the moment, which is forcing some vendors, like Microsoft, into their own reserves. Others, like Panasonic's Toughbook Division, put programs in place to assure that their customers can continue to make purchases -- and Panasonic can continue to benefit from sales. This practice is becoming widespread and includes other big names like HP and IBM.

Looking at the Cause

I met with the folks from Panasonic this week to better understand what was going on. What they were seeing was that the economic downturn was resulting in a knee-jerk reaction to either postpone or shelve entirely critical IT projects that used Panasonic Toughbook solutions. Those projects had previously been set as a high priority and intended to improve critical operational efficiencies. In some cases, they saw instances where specs were modified to accept inferior products that could not meet the mission guidelines laid out by the internal program staff. This dramatically increased the potential for failure and, given that some of these products are used in lifesaving roles, increased the likelihood of catastrophic results. All that on top of obviously increasing service and support costs along with a dramatic anticipated increase in unplanned outages.

The company felt it needed to do something dramatic to ensure companies had other options. Panasonic also needs to be able to continue during these troubling times to provide technologies that are often used to assure productivity in harsh environments and not put lives or property at undue risk.

Panasonic's Solution

The solution, which I expect will be emulated by others, was to announce a series of financing options that included lease and time payment offerings designed to enable Toughbook customers to contain costs while maintaining their commitments to the organizations that depend on them. In other words, it aims to assure employees who are at risk in the field that they will continue to get the very best their companies have to offer so they are both safer and more productive in their field roles. Clearly, this was also to assure continued revenues to Panasonic Toughbook.

Financing choices are aggressive and reflect the times. These choices include zero percent leasing for 36 months with additional options for step payments, flexible payments, and deferred payments, and lease-back programs for up to 60 months. CoActive Partners is providing the funding, but the process is handled by the Panasonic Finance Solutions organization. Full information can be found here. Panasonic is one of the more financially sound of the technology vendors and, in these times, can use this sound financial foundation to assure sales. Others may not be so lucky.

Looking forward to 2009, I think it is likely that more and more companies will find they have to implement creative and flexible financing programs for their clients to protect their revenue stream and avoid massive layoffs and downsizing. The firms that are early to set up programs that can be sustained through reliable customer interactions and assurance of the customer's credit worthiness should survive the next year vastly better than those that do not.

For buyers, these programs generally will offer subsidized loan rates that are likely lower than most of the other sources of cash available. They should be considered as financing alternatives in order to reduce the amount of interest being paid as well as the common need to remain liquid. Those that win in these hard times will clearly be those at the top of the list when it comes to assuring they can help their customers buy the products they want and need. Those that can't will likely see their customers shift their limited funds to competitors or to other product segments where such services do exist. 2009 will be all about being agile with finances. Panasonic Toughbook is setting a good example. You may want to spend some time looking at it and use it as a benchmark.