Winners of ELFA’s 2020 Operations & Technology Award share lessons learned
When the going gets tough, tough companies innovate.
Think of Volvo Financial Services (VFS), which applied its still-new Agile structure to handle an explosion of customer requests for payment relief—at the same time up-ending the company’s day-to-day operations to safeguard against the COVID-19 pandemic.
Or consider TIAA Commercial Finance Inc., whose IT department switched from a project mindset to a product mindset to help achieve digital transformation and then engaged everyone to change the culture from finance company to digital company.
Wishing to recognize excellence in COVID-19 response as well as in operations and technology, ELFA’s Operations and Technology Committee added a new category to its award program this year. Volvo Financial Services (VFS) won the Operations and Technology Excellence Award COVID-19 Project, while TIAA Commercial Finance won the 2020 Operations & Technology Excellence Award.
Below, leaders of each project share lessons learned in the hope that these will benefit other equipment finance companies pondering changes in operations and/or technology. So grab a seat and feast your eyes on some fresh ideas and food for thought from these winners.
1 Think Differently About Technology
Denis Stypulkoski says that in the past, TIAA Commercial Finance invested in technology to make incremental business improvements through a series of finite projects. “But when we began thinking about where our industry needs to go and where we should go, we realized we needed not to think about technology by itself, but as it relates to our marketplace,” says Stypulkoski, Senior Vice President and Chief Information Officer. “That meant we needed to become a digital-product company delivering financing to its clients through a digital experience. To do that, we’d have to shift from a project mindset to a product mindset. And instead of seeking funds for one project and returning later for more money to fund another project, we’d have to obtain continuous funding for continual digital engagement.”
Stypulkoski and Justin Tabone, Senior Vice President, Originations, led the leasing team in presenting a business case to TIAA Bank’s executive leadership and won approval. They also changed the internal identity of the entire company so that employees no longer saw it as a finance company but as a digital company that provides financing to its clients. Says Tabone, “Don’t think of your project as a technology project for your business. Use technology to disrupt your business, or you’ll have to respond to disruption by others. Abandon the old way of thinking and become the experiment you deliver to clients.”
Jennifer Martin, Vice President, Leasing and Vendor Program Support at Key Equipment Finance and Chair of ELFA’s Operations & Technology Committee, says TIAA’s project was both timely and futuristic. “TIAA didn’t win for implementation of a project,” she says. “They won because they found a way to look at their business from an entirely different angle. They found a modern way to meet the modern needs of their customers, shifting the entire company’s mindset to become a digital product company first and foremost, and then centering that renewed focus on their customers’ journey. This is the kind of big thinking and change that’s necessary to move forward in our industry.”
Tawnya Stone, Vice President, Strategic Technology at GreatAmerica Financial Services and Subcommittee Chair for the award, says TIAA viewed its task not so much as a technology project, but as a way to move the company forward using technology. “This was true in most of the 21 submissions we received,” she observes. “Companies looked at their challenges from a process perspective and then used technology to resolve them. It wasn’t that they wanted to do a cool project; they wanted to solve a problem—and they used technology to help do that.”
“COVID-19 has helped companies identify the pitfalls in their client experience, and that’s where innovation starts.”
Jennifer Martin, Key Equipment Finance
2 Adopt an Agile Approach
When customer requests for payment relief at VFS dramatically increased from three or four a week to hundreds at the peak of the pandemic, Chris French and Greg Snipes knew the company’s manual process and solutions for handling the requests were not sufficient. “At the onset of the COVID pandemic, business dropped off for many of our customers and they were left without their full revenue stream,” says French, Business Product Owner. “Our primary focus was to help our customers, but due to the unprecedented volume of payment relief requests, we knew the old way of handling customer payment relief requests was not going to work.”
VFS had limited experience using the Agile approach to project management prior to the COVID pandemic. “We had an Agile structure in place, but we hadn’t fully converted to using it,” explains Snipes, Business Project Manager, Digital Solutions & IT. Nonetheless, Snipes and French leveraged their existing product-owner structure and formed a cross-functional team that began documenting pain points and mapping out solutions.
Then a steering committee member emphasized that time was of the essence. “So we took an iterative approach, delivering small, quick wins and refining them while we worked on the next task,” says Snipes. “And the results were immediate. Customer call volume went down 90% as soon we put up a website where customers could submit requests.”
For others contemplating operations and/or technology projects, French has this advice: “Don't look to provide a total solution from day one. Break the project up into stages that allow you to make improvements with each release and continuously identify and address customer pain points.”
Stone says that by using an Agile approach, both companies trended away from simply automating a process to doing it in a way that pleased their customers. “This is significant because customer experience was a primary consideration,” she says. “Companies designed for ease of use, reducing the need for training and a heavy onboarding process.”
Award submissions also revealed another trend: movement toward broader visibility. “We saw several references to companies giving their partners or customers access to more information so they could make better decisions,” notes Stone. “Depending on the problem they were trying to solve, companies may have provided access to certain project information, sales information, or tools. There was quite a bit of focus on providing better visibility.”
3 Empower by Involving the Right Resources
Stone further observed from submissions that projects whose teams were empowered progressed more quickly. “If a team had to talk frequently with a steering team, things slowed down considerably,” she says, adding, “Make sure you have the right people involved to make empowerment possible.”
French agrees. “We had a steering committee, but our cross-functional team was empowered to make decisions and implement improvements,” he says. “Some of the stakeholders were intimately familiar with how payment relief modifications were done, and some weren’t. The combination was invaluable for producing creative ideas that we could move forward with in real time, making our work successful and impactful for the customer.”
Snipes adds that the team’s ability to develop, test and deliver simultaneously made turnarounds even faster. “We were continuously addressing customer pain points, and our quick turnarounds made an immediate impact,” he says. “Bringing together a team that had development resources, knowledge of the business process, and familiarity with systems was key to a successful project. There was alignment from day one on what we needed to deliver—and that was assistance to our customers.”
“Don't look to provide a total solution from day one. Break the project up into stages that allow you to make improvements with each release and continuously identify and address customer pain points.”
Chris French, Volvo Financial Services
4 Deploy Change Management Techniques Early and Often
Tabone says the idea of shifting from a finance business to a tech business that provides financing was so jarring for some that project leaders deployed every change-management technique at their disposal to get everyone on board. “We communicated often with the entire company and asked everyone on the leadership team to adopt the terminology we were using to show that this was a new direction,” he says. “We also involved employees in every discipline, looking for digital natives and first thinkers who would look for ideas in other industries and bring them as ideas and possible products. We engaged them to help create a groundswell of enthusiasm and ultimately, it became a self-fulfilling prophecy. As we continued, more people realized we were listening and acting on their ideas. They got excited and their enthusiasm spread.”
5 Plan to Fail in Small Ways
TIAA’s project met with success, but Stypulkoski says several negative results occurred along the way. One involved the digital quote tools developed for the sales force and clients. “We worked with the bank security team and embedded security capabilities that seemed perfect,” he recalls. “Then we gave the tools to our sales force, and their feedback was loud and clear: they said the level of security we built in totally took us out of the market. It made the tool too hard to use.”
“When you take this approach, you have to plan to fail,” adds Tabone. “You’re experimenting and rolling out small changes, and you know some of them will be small failures.” The quote tool was quickly changed and its next iteration was well accepted. Says Stypulkoski, “Agile methodology creates a continuous delivery pipeline, so even when we failed, we were taking in more information and ideas that helped us make changes and deliver again. Our business agility framework helped us pivot.”
“Focus on your customer journey and your associate journey and put them at the forefront of your design.”
Justin Tabone, TIAA Bank
Martin says that too often, a fear of failure can stand in the way of innovation. But she’s optimistic about the direction in which forward-thinking companies are headed. “Just five years ago, award submissions were focused on gutting the infrastructure,” she says. “Now the focus has moved to agile eco-systems and digitization of the leasing industry. Major initiatives like these will help drive the entire industry forward, but there are bound to be lessons learned along the way.”
Martin also believes the bigger, outside-the-box thinking demonstrated by TIAA is shrewd, given the rapid increase in client expectations. “It’s all about that Amazon experience,” she posits. “You can search for anything online, buy it, and it’s there in two days. Leasing has been challenged to get to that point of innovation, and now we’re playing a game of catchup. COVID-19 has helped companies identify the pitfalls in their client experience, and that’s where innovation starts. Now companies are going to do everything necessary to boost client satisfaction.”
6 Bring Your Partners Along
Tabone says an integral part of TIAA’s repositioning was launching tools that provided “wing-to-wing solutions” to company partners. “We enabled processes so they could choose a financing program, digitally sign documents and acquire technology at their fingertips,” he says.
TIAA also made enhancements to its dealer portal, providing instant access to all portfolio information, from renewal maturity information to instant quotes and the ability to submit applications through the portal. “Our dealers are thrilled and so are the manufacturers, software providers and vendors we engage with,” says Tabone. “They all can see and manage everything in their portfolios.”
By understanding the needs of partners and developing digital solutions that benefit clients, Tabone says everyone wins. “Focus on your customer journey and your associate journey and put them at the forefront of your design,” he suggests. “At the end of the day, it has to be great for partners so they have a wow experience. But it also has to be great for your associates so they can deliver that experience. Then, great results are likely to follow.”