Guidelines for Lease vs. Purchase of Information Technology

The rate of technology change is increasing, with an emphasis on client/server technology, faster system development, and shorter life cycles. This has led to spiraling information technology (IT) budgets, driving the need for a re-evaluation of IT management issues. Organizations must find new ways to accommodate technological change. Leasing has recently emerged as a feasible, cost-effective alternative to purchasing equipment, particularly in the desktop and laptop areas.

The decision on whether to lease or purchase equipment must be made by:
" Examining the IT management processes at the organization.
" Determining the business needs regarding IT of the organization.
" Conducting a cost-benefit analysis of the leasing and purchasing alternatives

If done in the right way for the right reasons, leasing can be an efficient and cost-effective alternative to purchasing. If handled incorrectly, leasing can be more expensive and harder to manage than an outright purchase.