Flexible financing is key to APAC channel partner growth

Global technological advancements are creating waves across the IT ecosystem, pushing channel partners in Asia-Pacific and Japan (APJ) to make critical adjustments. Digital transformation initiatives are reshaping traditional business models and fostering a culture of continuous improvement and innovation. As a result, channel partners are compelled to evolve, not only by adjusting their product and service offerings but also by rethinking their business strategies to remain competitive.

In today’s dynamic ecosystem, driven by emerging technologies, financing and payment solutions can serve as a key advantage in navigating these changes. Technology distributors and their financing partners play a crucial role in providing the financial resources, tools, and expertise needed to help partners and their customers to extend purchasing power and scale their IT and technology investments.

Shifts in market demand and customer expectations

According to Tech Data’s APJ Direction of Technology 2023 report, 59% of partners have identified financial scalability as a key challenge. The constraints caused by limited financial scalability lead to several negative outcomes, including preventing channel partners from adopting the latest technologies and affecting their ability to stay competitive. Delays in technology adoption can result in outdated offerings and a weakened market position.

This shift in the market introduces significant financial pressures on partners as they consider where to invest, whether in talent, technical expertise, or other areas. As customers increasingly seek payment solutions aligned with their technology use, traditional financing options often lack the agility and support required to meet these expectations. As a result, alternative financing or enhanced payment solutions become necessary to avoid falling behind in a fast-moving environment. Without financial scalability, partners may struggle with customer retention and hindered business growth.

Flexible financing as the key to partner growth

Agile, purpose-built financing solutions are essential for addressing challenges within the APAC channel ecosystem, allowing partners to better manage cash flows, invest in emerging technologies, and scale operations to meet market demands. These models may include deferred payments, leasing, subscription-based financing, and customised credit solutions that align with the business cycles and revenue streams of channel partners.

Partnerships with financial institutions enable technology distributors to simplify the financing process by integrating payment solutions into product sales and funding them for the full term upfront. This approach eliminates credit risk for partners and provides greater value to customers. By working with a distributor, players in the IT ecosystem also benefit from value-adds such as technical expertise, proofs of concept and use cases for specific industry verticals, comprehensive training, and integrated selling alongside product marketing and sales teams.

Flexible financing mitigates risk by spreading the cost of large capital investments over time. This allows channel partners to avoid immediate financial strain and better manage market fluctuations, creating a more resilient and stable business model.

Another way partners can gain financial flexibility and scalability is by adopting as-a-service models, where subscriptions are paid on an annual, monthly, or pay-as-you-use basis. This enables partners to manage budgets more effectively while freeing up working capital to invest in other areas of their business. These models also facilitate regular technology updates, ensuring both channel partners and their customers have access to the latest innovations.

Fueling the APJ digital transformation wave

Flexible financing solutions provide the business agility necessary for both current and future success. They empower partners — and, by extension, their customers — to scale purchases and operations. Such operational boosts are crucial for accelerating business growth, particularly in today’s fast-evolving IT landscape.

Moreover, integrating technology into financial models advances digital maturity and drives business gains. By incorporating technology into financial solutions, businesses can improve decision-making, optimise cash flow management, and secure more favourable financing arrangements. Automating financing operations reduces administrative burdens by streamlining tasks such as credit approvals, invoicing, and payment tracking, leading to faster deal closures and improved cash flow management.

Additionally, AI and machine learning enhance credit risk assessments, enabling partners to better evaluate customers’ financial health, offer more flexible financing terms, and minimise risk. Cloud-based financial management systems further support scalability, allowing partners to expand financing operations and manage larger deal volumes without significant infrastructure investments.

The increasing demand for these solutions is clear, with trends across the hardware and software sectors emphasising the importance of flexible financing in the current market. This growing need highlights how businesses and channel partners that embrace these models will be well-positioned to seize opportunities brought about by the APJ region’s digital transformation wave.