Do more spend smarter: South African businesses under growing financial strain
As rising IT costs, supply chain instability and shrinking budget flexibility continue to impact organisations, businesses are being forced to rethink how technology is funded.
InnoVent South Africa, a specialised provider of IT leasing and asset management solutions, says traditional procurement models are placing increasing financial strain on organisations as global hardware costs continue to rise and supply chain instability impacts technology availability across multiple sectors.
According to Gartner, worldwide IT spending is forecast to reach $6.15 trillion in 2026, representing year-on-year growth of 10.8%, driven largely by infrastructure and hardware-related expenditure increases rather than discretionary innovation spending. In South Africa, these pressures are being amplified by currency volatility and delayed refresh cycles, with many organisations now facing a backlog of ageing infrastructure at a time when pricing remains unpredictable.
David Buck, General Manager at InnoVent South Africa, says many organisations are still relying on procurement approaches that no longer align with current market conditions.
“Businesses are under pressure from every direction, rising OEM pricing, extended lead times, constrained budgets and increasing operational demands. Yet many organisations are still funding technology through large upfront capital purchases that immediately tie up working capital, reduce balance sheet flexibility, and limit an organisation’s ability to respond to new opportunities or shocks,” he explains.
“As the market becomes more volatile, organisations need procurement strategies that improve resilience, preserve cashflow and create predictable financial planning. The biggest risk is no longer the technology itself, it’s the financial model used to procure it, which can quietly erode cashflow, increase total cost of ownership, and reduce organisational resilience over time.”
InnoVent South Africa believes the shift from CAPEX-heavy procurement toward more flexible OPEX-based consumption models is accelerating as organisations look to reduce exposure to fluctuating pricing and supply chain disruption. Through structured technology financing and lifecycle management frameworks, organisations are able to spread technology costs over fixed monthly terms while aligning payments more closely with operational requirements and business growth.
Buck says this approach is becoming increasingly important as businesses prioritise financial agility and operational continuity. “The conversation is no longer only about acquiring technology, it’s about how businesses fund technology in a way that protects working capital and enables long-term sustainability.”
In addition to funding flexibility, ongoing stock shortages and inconsistent hardware availability continue to create greater complexity across Africa, where supply constraints, import dependencies and fragmented distribution channels create greater complexity than in more mature markets.
To mitigate this, InnoVent South Africa operates a OEM-agnostic sourcing model across multiple distributors and OEM partners, helping organisations reduce reliance on single supply channels while improving procurement flexibility. This allows InnoVent to structure blended solutions, combining new, refurbished and bridging assets, while optimising both cost and availability in ways traditional procurement channels cannot
Where new hardware lead times become impractical, refurbished bridging solutions can provide short-term operational continuity while businesses wait for preferred stock availability.
He stresses that organisations waiting for pricing or supply chains to stabilise may find themselves increasingly exposed to unnecessary financial and operational risk. “InnoVent is seeing increasing demand from clients looking to shift more than 60% of their technology spend into OPEX-aligned models, a trend that reflects a fundamental rethink of how technology investment is structured.”
“The market has fundamentally changed. Organisations that adapt their procurement and funding models now will place themselves in a far stronger position to manage volatility, protect cashflow and scale more effectively in the future,” he concludes.
