For many equipment leasing and finance companies, modernizing software and information technology (IT) is a priority. After all, the promises are outsized: Meet increasing customer demands and expectations. Streamline processes. Improve efficiency. Reduce costs. Free people to engage in the highest and best use of their time. Gain a competitive advantage.
At the same time, the proliferation of places to invest is head-spinning. From holistic, end-to-end platforms to niche products or solutions that will improve critical functions or customer experience, choosing where to focus a company’s technology budget—especially when resources are limited—can be a challenge.
“The key is to be really thoughtful about how you’re making those decisions and understand the business problem you’re trying to solve,” says Danielle Dolloff, Executive Vice President of Business Development for Liventus, Inc., a full-service business technology solutions company based in Northbrook, Illinois.
At a minimum, making the best decisions for your organization requires analysis, involvement of key team members, accurate data and an understanding of your business’s needs, both now and in the coming years. Equipment Leasing & Finance magazine spoke to industry experts from ELFA’s Service Provider Business Council Steering Committee (BCSC) to get their advice about where to make your IT and software spend now.
“Once people get their hands on their data, they unlock all the opportunities in their business.”
—Danielle Dolloff, Liventus Inc.
What’s Driving Investment Now
As the industry changes so, too, do the trends and circumstances that drive technology decisions. Industry experts identified several important software and IT investment influences that are affecting technology and investment decisions now.
User experience
Large e-commerce companies have raised customer expectations about user experience, and equipment finance companies are not exempt from this phenomenon, Dolloff says. “Customers are looking for an Amazon-level experience,” Dolloff says.
Jeffrey Bilbrey, Chair of the Service Provider BCSC and CEO of Leasepath, a Westlake Village, California technology solutions company specializing in the asset finance industry, says improved customer experience is a trend he sees lately. That area of focus also extends to a more holistic desire for back-end systems like customer relationship management (CRM), accounting, contract management and other infrastructure to be able to communicate with each other seamlessly.
““[AI is] occupying a lot of people's thoughts if not actually creating value for them on a widespread basis.”
—Peter Haug, LTi Technology Solutions
“What we're seeing is that people are looking for opportunities to streamline that whole daisy chain of activity,” Bilbrey says. This ensures that when someone in sales or underwriting is speaking to a prospect or customer, they understand the history. “They actually know the experience of that customer, of the contracts they have, and the one that is being surfaced right now. And underwriting has a single view, not just of the proposal that has come in, but of the entire relationship.” Companies that can deliver a better user experience may have a competitive advantage, he adds.
Platform integration
Companies often struggle with getting various tools and platforms integrated so they’re able to share information more efficiently among stakeholders. This can be a critical component in streamlining operations and facilitating growth, says Alistair Canal, President of Syndifi, Inc., a Chicago, Illinois-based all-in-one syndication platform for equipment leasing and finance companies.
“How can all of the parties involved manage that overall ecosystem? Can these technologies that we've all heard about collaborate with each other and what does that communication look like?” Canal says. He says he’s seeing a focus on creating an IT approach designed to enable communication between systems, both internally and through industry-leading collections of technologies using application programming interfaces (APIs).
Automation
Manual processes leave companies open to mistakes, redundant work, waste and inefficiency. Dolloff says she is seeing many companies approaching her company to improve automation and streamline processes. “Human capital is getting rarer and more expensive,” she says. So, companies are looking for ways to optimize the rote tasks that can be done by technology. If you can use technology to improve your processes, “you're going to be faster, probably more accurate and deliver that frictionless experience that customers are expecting,” she says. In addition, at some point, manual processes will inhibit growth, giving companies more incentive to explore automation.
Knowledge management and compliance
Companies in highly regulated industries like financial services often have significant compliance responsibilities. In addition, companies that are using disparate systems may develop information siloes, says Peter Haug, Product Manager at LTi Technology Solutions, an equipment lease and loan software company based in Omaha, Nebraska. Keeping up with shifting federal, state and even local regulations can be a more-than-full-time job, he says. The right technology can help companies avoid mistakes and keep deal decisions transparent.
“Festina lente, or make haste slowly, is a Latin phrase that is a prudent practice when embarking on the tech implementation journey.”
—Alistair Canal, Syndifi Inc.
In addition, some companies use a combination of varied systems combined with human experience to make decisions. “They’re people who have been around for a long time—maybe that experienced underwriter or credit person who's got 30 plus years of experience—who intuits and uses their experience to figure out whether they should be doing the deal,” Haug says. As the equipment finance industry becomes more complex, with more automated deal decisions and new products, technology can help team members be more effective while eliminating the potential for mistakes and non-compliance with regulations, which could lead to problems with clients, as well as penalties and fines.
Data and business insights
Dolloff says that when systems begin working together and improved technology allows different solutions and tools to share information, customers often begin to realize the power of their data and reporting mechanisms. “Once people get their hands on their data, they unlock all the opportunities in their business. They may have visibility into the landmines coming up, what opportunities they may be missing, what the ‘hot’ areas of their business are now,” she says. “What is that high-profit, high-trend part of my business? Data isn’t always sexy, but data and then reporting are important.”
Of course, with that data come concerns about cybersecurity, which is another area of investment equipment finance companies are focused on now, she says.
Artificial intelligence
While artificial intelligence (AI) gets much of the buzz in technology these days, Haug says many are still trying to figure out the best use for it. “It's occupying a lot of people's thoughts if not actually creating value for them on a widespread basis,” he says. “But it will certainly be a conversation piece and a trend for the months and years to come.”
AI is being used to automate mundane tasks, create content and improve customer service. And while the technology is evolving quickly and may soon be able to take on more tasks, Haug warns that it’s not without risks. AI technology has shown bias and manufactured falsehoods in some uses. Haug says that using the technology to make, for example, underwriting decisions could be risky if the technology does show bias, violating laws. He advises caution until each use has reliable safeguards. “The more of a black box you put in between you and your customer, the harder it is for you to explain how you came upon these decisions,” he says.
Making the right investment decisions
Clearly, there are a number of compelling reasons to make technology investments, but businesses also face the reality of resources—not only budgetary but human. Even when there are resources for replacements or upgrades, those investments in time and money should be made wisely and with an eye on improvements in processes or efficiency, Canal says.
“Festina lente, or make haste slowly, is a Latin phrase that is a prudent practice when embarking on the tech implementation journey,” Canal adds. “At the end of the day, organizations simply need to assess the organizational pain points and current technologies or lack thereof, research tech options in the market, and then determine the value you are willing to place on a more transparent, efficient, secure and scalable smarter work environment.”
There are some steps that can help you identify the best places to focus your spend.
1. Understand the problems that need to be solved.
While starting with solving a problem may seem simplistic, Haug says it can be difficult to do. Seeing your business holistically—including where improvements need to be made—can be challenging. “Ultimately, if you don't have a problem you're trying to solve, it's really hard to measure whether there is an improvement,” he says. Work with your software provider to identify problems and “get on the same page by focusing on the solutions rather than features,” he says.
“Go through a total cost of ownership (TCO) analysis and understand what your likely ROI compared to TCO is.”
—Jeffrey Bilbrey, Leasepath
One way to identify areas that need improvement is to map out various processes, Dolloff says. That way, you can identify the steps in various processes and how people and technology work together in your business. You can see where steps can be streamlined, and greater efficiency realized. “I love it when people have some sort of roadmap,” she says. “It helps you identify where to start, and if you've got a pretty decent journey ahead of you, you can start with a small win. That helps you justify the spend and show your team that this is going to make life easier.”
2. Choose the right partner
Finding the right vendor is essential for the success of your project. Haug recommends vendors that have experience in the equipment finance industry, as they’re more likely to understand the nuances of the business. Bilbrey emphasizes the importance of checking references—both customer references and partner references. [For example, the software provider with whom the vendor works.] “If you can't find partners, then that's probably a red flag,” he says.
Bilbrey also says it’s important to do a total cost of ownership (TCO) analysis. “Please don't buy based on the initial sales proposal. Go through a TCO and understand what your likely ROI compared to TCO is,” he says. “A low price might not be a great deal. TCO analyses take into consideration factors like initial purchase of software, as well as ongoing maintenance, system integration upkeep, support and other factors, which may add significant costs over time.”
3. Devote internal resources for success
Dolloff also says it’s important to ensure you have the time and people available to develop and deploy the project properly. As technology solutions are developed, customized and activated, your team will likely need to give input, participate in feedback and training sessions, and otherwise make themselves available to ensure the project’s success. “You can sometimes hire outside resources like consultants to bridge the gap and reduce the time your team will need to spend, but it’s never eliminated,” she says. “If you're just too strapped, and your team won't be able to focus on it at all, you're going to have to solve for that or you will, I promise you, fail.”
With today’s plethora of technology solutions and options, equipment finance companies have many options to enhance their businesses. The key to successfully making the right investments lies in understanding those opportunities and strategically finding and working with the right partners to deploy them.
