ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: SITM

Monday, May 5, 2008

SITM

SITM stands for the dreaded but vitally important Services, Installation, Maintenance, and Training. The SITM is often the difference between properly configured hardware (or software) or positioning the hardware or software purchase to get maximum use out of it.

One of my software resellers, Sales Diagonal, says that more than 4 out of 5 purchases of CRM (customer relationship management) software are considered failures by and large due to poor or no training on how to use and configure for the business's specific needs.

Can SITM be financed?? Yes and No. Certain special instances all of it can be financed but that is typically the exception and not the rule. The rule is that a cap of 20% (sometimes 30%) of equipment or technology cost can be rolled into the financing for 'soft' costs of SITM. So for every 10k in equipment or tech, another 2k can be included for SITM and financed as well. This is a great thing for the small business that may be cash strapped but needs the equipment and the training on how to maximize its usage.

On the hardware side, with sales cycles getting longer, rolling these additional costs into the financing can mean the difference of whether a deal gets done or not.

The other big pitfall with SITM is to be sure that the service/maintenance contract for the technology is as long or longer than the financing period to insure properly maintained technology, especially for programs like our rotation program where the expectation is that the hardware will be returned. This is a good opportunity for both the client and the MSP to lock in a good rate for a long term contract. A true win/win.

1 comment:

number said...

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