Industrial Automation Magazine India

At SFS, we believe in providing customised financing solutions

Published on : Tuesday 30-11--0001

What accounts for the indecision in going full steam ahead in technology adoption? Is it financial constraints alone?

Technology adoption, especially in the context of digitalisation and Industry 4.0, has several factors that an organisation needs to take into consideration. Key elements amongst these include developing digital skills and mind-sets, gaining access to real examples of successful transformation in co-related sectors and industries, and a clear, phased, strategic plan and access to finance.

A combination of any of these elements can prevent companies from adopting technology or starting off on the path of Industry 4.0 rapidly. Additionally, Indian manufacturers tend to be well-informed, and prudent in measuring the pros and cons of the new technology before adopting it. While technology adoption depends on a multitude of factors, we cannot deny that Return on Investment remains paramount.

Financial solutions providers need to be a part of customers’ decision-making process much before they even start talking about possible financial constraints. These interactions and engagements can help overcome many of the challenges collectively.

What is the target market for SFS – is it the large companies of SMEs?

We focus on market segments and equipment that we understand exceptionally well – these include machine tools, healthcare, plastics, packaging and infrastructure, and provide easy and quick financing solutions for small to medium sized businesses in these verticals – thus, enabling them to gain access to funds whenever they need them.

Our solutions are customised for every customer keeping its domain expertise in focus, from a small jobbing workshop that’s trying to expand its reach, to a large multi-chain hospital providing healthcare to thousands of patients across India. In doing so, what’s most important to us is to deliver maximum value to our customers.

One often comes across ‘low cost solutions’ that turn out to be costly. How does SFS approach the issue – the primary contact with target companies?

At Siemens Financial Services, we believe in providing customised financing solutions, based on the customers’ business need and cash-flow/working capital requirement fitting well in the business plan, to be able to deliver maximum value. Based on these parameters, we provide solutions such as: term loans, leasing solutions and receivables financing.

We believe this is a better approach to deliver value, as compared to focusing solely on cost as a   parameter. This also helps us to provide financing solutions for “Total cost of ownership (TCO), which includes maintenance and other important costs, over the lifetime of the equipment, rather than just the base price for equipment purchase”.

We approach the market (key financial decision maker) via 2 key channels: OEMs/Manufacturing partners and Siemens India.

What exactly is the Smart Finance approach and how does it work in practice?

Smart Finance, as defined by us at Siemens Financial Services, is financing that enables manufacturers to invest in modern technologies to upgrade/update their technologies in their quest towards ‘digitalisation’ or Industry 4.0.  

All over the world businesses are discussing Digitalisation and Industry 4.0. Amidst other anxieties and challenges that businesses foresee, making the leap to Industry 4.0 often comes with necessary but significant investment. This got us at SFS thinking, how can we help more businesses upgrade to Industry 4.0?

That’s when Smart Finance comes in, making it easier for businesses to invest in new technology – by reducing the financial burden of investing in new technology.

In practice, this means businesses can invest in new technology without worrying about huge upfront payments. They can purchase smart technology (hardware and software) with a nominal upfront investment, implement and start using it, and pay for it in affordable instalments.

Siemens is one of the major players in the segment. Is the SFS initiative vendor agnostic, or does it have strings attached?

Siemens is one of the global players providing digitalisation solutions. While Siemens Financial Services is a group company of Siemens and supports the digitalisation solutions offered by Siemens. We are not restricted to providing financing solutions only for solutions provided by Siemens.

We serve the customer in a manner that meets their business objectives, and our customers have the ultimate choice of deciding which vendor they want to partner with and SFS facilitates their purchase decision. Our strong relationships with top OEMs in our target segments are a support made available to our customers enabling them concluding quick and fast.

Is the Indian market significantly different with regards to decision making? Does SFS have a different strategy here?

The Indian market is promising for manufacturing as well as financing. There’s so much change and scope to offer more. In the eight years that we’ve been in India, we’ve seen decision-making become more informed and quicker. Industrial buyers know the options available to them in India and overseas. They’re also open to explore unconventional means of financing. One such option is leasing, which enables technology-intensive industries to stay relevant with the latest technologies without taking on the hassle of asset ownership.

The decision making in the Indian market is significantly different in two key aspects: Speed of decision making and documentation, and balancing between urgent and important.

The ambitious Make in India initiative cannot succeed without digitalisation. But is this not in conflict with the other concern of generating employment?

Digitalisation and employment generation are complementary to each other. While digitalisation will automate some jobs partially and some fully – it will also create a number of new job roles and opportunities to deal with new requirements. Workforces of the future will need to be more adept at science and technology, be more creative and adaptive than ever before. One such example is of Data Scientists/Analysts – people who can work with large sets of data to derive insights out of them, to use the data in an effective and impactful manner.

I think it’s vital for us to keep in mind, that in order to prepare for the digitalisation wave, we will all need a “Learn, Adapt, Upskill, and Repeat” mindset. In the manufacturing industry, we already observe that greater attention is being paid to training and skill development, continuous learning will have to become the norm, if we want to ensure new opportunities for workers in a digital world. If the right efforts are made today, challenges and anxieties surrounding digitalisation can be overcome faster and focus can shift to maximise opportunities, productivity and prosperity. After all, a recent SFS study says that only the first 50% of the market will reap the advantages of digitalisation, the remaining 50% will have to play “catch-up” since by then, it will become a benchmark for all industry participants to meet/implement in their businesses.  

Any use cases now from the Indian market, especially the SME sector?

We’re driven to fill the gap between conventional lending and customer needs, while delivering relevant and customised financing solutions. We see the need for this every single day, keeping us passionate about delivering on our promises. Engaging in frequent discussions with customers and vendors gives us a deep understanding of changing requirements in the industry and enables us to provide the most impactful/value providing financing alternatives to them.