Equally important, although in a different decision making category is the form of purchase you choose; capital purchase, lease, or long-term managed services contract? While none of these approaches is entirely new, vendors are offering additional flexibility so this decision deserves your careful consideration.
Pay for the system up-front, typically in implementation milestone-based instalments. Negotiate post-implementation maintenance separately. You own the equipment.
Make pre-agreed periodic instalment payments. Lease terms will typically include some maintenance and may include upgrades. You will not build equity in the equipment. This approach is typically selected for financial reasons, the level of commitment is similar to capital purchase and breaking the lease is very difficult.
Long-term Managed Services Contract
Make pre-agreed periodic instalment payments. You may be building equity in the equipment and own it at the end of the term, depending on your contract. The contract should include maintenance and upgrades. The main advantage of this approach is handing over the responsibility for maintaining the system, in some cases including all hardware and software upgrades, to the vendor.
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