LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global equipment financing services market is expected to grow at a CAGR of 5.2% over the next five years due to the need to maximize productivity and efficiency by adoption of equipment financing services.
The research report titled ‘Global Equipment Financing Services Market: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The global equipment financing services industry is fueled by the rise in new business volume along with the competition that drives firms to maximize productivity and efficiency by adopting measures such as procurement of equipment financing services, which provide competitive advantages,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “In addition, rise in investments in the construction, transportation, and IT sectors will also drive the market,” adds Angad.
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Cost saving opportunities in the equipment financing services market
The adoption of various cost-optimization levers helps buyers of equipment financing services realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the equipment financing services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Technologies such as web-based applications, data management systems, RTLS, and predictive analytics allow buyers to obtain useful insights about the equipment as well as the profitability of the financing service.
Buyers focus on adopting and implementing centralized programs and systems that enhance visibility into the service and facilitate better program governance.
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Optimization of supplier competition saving aspects
Optimization of supply pool segregation is critical in the global equipment financing services market. Technavio analysts suggest benchmarking the services provided by suppliers in terms of contract period and pre-closure options and negotiation with supplier in terms of interest rates.
Buyers also prefer suppliers that understand the requirements in terms of cash flow, budget, and tax requirements to structure an efficient financing program that meets buyers' tax requirements.
Bundling of services saving aspects
One of the most opportunistic strategic cost saving levers in the global equipment financing services market is the bundling of services. Assistance in equipment selection and periodic performance review of the equipment (in equipment leasing). Hence, buyers prefer using RTLS that track and manage assets and equipment in real-time. Such systems also allow buyers to reconsider their asset/equipment use.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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