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Whilst customers look for ways to deliver services with reduced or even no funding, one obvious approach might be to simply ‘batton-down-the-hatches’ and do nothing. However, this approach rarely leads to a successful outcome and in some cases can be counter-productive, simply because sweating ageing equipment can sometimes result in higher maintenance costs, increased equipment failure, higher ancillary costs (such as energy bills) and, in the long run, a higher total cost of ownership and replacement.
Siemens’ varied financing structures now allow you to replace old equipment with new superior technology, despite your budget constraints. Payment options allow you to address capex or opex preferences and improve various business case metrics, such as Payback, Return on Investment, Net Present Value (NPV) & Internal Rate of Return (IRR) – all helping support your economic decision makers in their investment decisions.
In their simplest forms, payment options can be based on the following models;
To illustrate how these types of arrangement can potentially improve the budget and business case drivers in a project, consider these alternative images comparing standard cash purchase with a payment over time alternative.
In other areas of your business you will already be familiar with some form of managed service or outsourcing arrangement which bundles together equipment supply, installation and ongoing maintenance, service and even operations under a single supplier agreement – think of your IT infrastructure, for example.
Siemens are able to support you in a similar way with your traffic equipment, service provision and solution delivery, where a complete asset maintenance and replacement programme is delivered simply by Siemens under a central framework agreement or as an amendment to your existing maintenance agreement.
By taking advantage of such an arrangement, you benefit from continuing to work with a supplier that you already know and trust. At the same time, you benefit from cost savings delivered through the accelerated replacement of ageing, failing or obsolete equipment with more up to date, energy efficient and green alternatives.
With a managed service arrangement provided by Siemens you are able to select and include the elements appropriate to your specific requirements.
For example, ageing incandescent traffic signals with high running costs may be replaced with more advanced LED technology, delivering improved energy efficiency, reduced maintenance costs and better environmental credentials.
Using a PPP arrangement, several components, risks and service standards may be bundled together under a single regular payment including:
In some instances, targeted replacement of assets may effectively pay for the acquisition of new equipment over an agreed period, through the reduction in running costs.
The idea of financing equipment is not a new one. Consider the computer you are reading this on - there is a good chance that it may have been financed in one way or another. There are sound reasons why organisations choose to finance assets in this way, these include:
In short, utilising leasing or asset finance to acquire your traffic solutions provides a simple and effective way to manage the total cost of ownership of the equipment you need, over its useful working life. This eliminates the worry of initial acquisition costs when budgets are tight. You can start using your new equipment immediately with minimal fuss and outlay.
In certain cases it is even possible to sell and lease back your recently purchased Siemens equipment, without losing use of the equipment for a single minute. You receive an injection of cash for use on other projects within your organisation and benefit from making regular payments that match the working life of the asset.
In addition to the innovative solutions mentioned above, listed below are other financing options available to Siemens customers:
These are just a few illustrations of the types of asset finance facilities Siemens can make available to you to help you to do more with less. View our contact details in the top right of this page to find out more.
Steve Parsons (Head of Sales)
Disclaimer: All finance, leasing and credit facilities are for registered companies or public sector entities only and are subject to credit and other approvals. Any examples provided are illustrations only and no material should be treated as a contract or quotation to which either party are committed, we reserve the right to change information without notice. Facilities are subject to further discussion and proposals and any Agreement that may eventually be agreed may differ to the contents of this email or other correspondence.