Published on November 4, 2013
By Mitch Kaufman
President, IFS Technology Solutions
More and more companies are using custom software solutions. The average IT department spends about 30% of its annual budget on custom software, according to research from Forrester, while 1 in 8 will spend up to 50% on custom solutions. Many of these organizations are small- to mid-sized companies in the financial services sector.
Can custom software give leasing companies in particular a competitive edge? In a word, yes. CIOs are wise to invest in custom applications– but only those that will truly boost their company’s bottom line and deliver a worthwhile return on investment. In this article we look at software enhancements that can increase efficiencies and lower costs, including portals for customers, channel partners, and investors.
The quest for efficiencies: streamlining operations
For the leasing industry, custom software has created a new era of efficiencies in key operational areas:
|Activity||Ability enabled by custom software|
|Document generation||Catalogue lease documents online, generating and sending them directly from your core leasing system|
|Workflow||Direct applications and contracts directly throughout their lifecycle to the appropriate team members based on specific deal attributes|
|Intra-group communications||Track and audit booking, asset management and other administrative requests online – a process particularly critical for large organizations where departments supporting the leasing operation are widely dispersed|
|Interactive, ad-hoc reporting||Speed up analysis and decision-making|
|Electronic document signature/storage||Execute a transaction without generating any paper documents|
Although many of these functions have been incorporated into base products over the last decade, with the evolution of commercially available lease management systems (LMSs), home-grown leasing systems may lack these capabilities. Investing in these systems is money well spent, considering that they contribute greatly to operational excellence and therefore competitive advantage.
Regardless of what is invested in software enhancements, no efficiencies can be gained if staff are poorly trained. At the outset, your vendor or in-house IT staff will provide training and the then-current team of users will be adept at using system features. Over time, new system releases will introduce new features and modify existing ones. Companies often don’t spend enough time reviewing release notes and are unaware of changes that might impact or improve efficiency. And in small and large organizations alike, staff turnover always presents the potential of knowledge drain. Keeping up with system – and staffing – changes is paramount to continuing to extract the most efficiencies from your LMS.
Customer service portals: strengthening customer relationships
The observation is true that it’s much cheaper to retain a client than it is to find a new one. Brand loyalty hinges on the customer experience. Human-to-human contact, self-help portals and community-based support systems – through which users can input their solutions to problems for others to read and comment – are all part of a modern customer-centric ecosystem that helps build customer relationships. Most leasing companies already provide customer support through customer service agents, and community-based peer-to-peer solutions haven’t proven very successful in the financial sector, leaving leasing companies to focus on self-help portals. Investing in a customer service portal will build brand loyalty and at the same time, help lower your contract administration costs.
Too many lessors are focused on residual income and fear that more contract transparency will lead to fewer evergreen leases. This thinking, however, is shortsighted. Your clients are already accustomed to, and likely prefer, a self-service portal over the traditional phone call to resolve customer service questions. The more functions you offer online, the less likely your customer service agents will have to work with a client offline.
Customer service portals should run seamlessly through a traditional web browser on a desktop monitor or mobile device. A separate, mobile-specific application can also be developed and should be targeted at the iOS (iPhone) and Android, as they dominate the hand-held market.
Many of the functions expected in a customer service portal are already offered by companies in other industries:
Customer service portal features and benefits
|Portal feature||Lets the customer:|
|Contract overview||View a summary of the contract, including length of term, next payment due date and any open balance|
|Documents||Gain online access to lease documents for reference and reprint|
|Open accounts receivable items||See what they owe, when it was due and what it was for|
|Payoff information||See their buyout at any time|
|Pay online||Make a one-time payment and register for recurring automated clearinghouse payments|
|Invoice regeneration||Regenerate an invoice instead of having to call customer service and wait for an email|
|Online chat||Easily access a customer service agent|
According to research from Gartner, over the next couple of years, many enterprises will turn to virtual assistants (VAs) for customer support. Aside from the pure entertainment of a VA, these computer-generated employees can help companies realize more significant cost reductions – at least 5% – and help increase customer loyalty over the current generation of customer support applications. Currently, however, maintaining a sustained conversation between machine and human is a challenge. A comprehensive knowledge base will be needed to build efficient, self-service support tools. Once perfected, these VAs will lead to further downsizing of customer support agents.
Channel partner portals: generating business
Another area where software customization can yield exciting results is the channels through which you generate business. Long gone are the days when vendors/brokers faxed applications and then continuously called to find the status of an open application.
A comprehensive portal to support your channel partners offers the perfect platform to differentiate your company from your competitors. Through this portal, you can immerse channel partners into your operation, making it less likely they’ll shop for another lessor. Often, lessors and their partners have in place specific programs, such as pricing and renewal sharing, that can be driven through this portal.
The portal must be easy to use and offer not only origination but also back-end metrics on the deals that have booked through each channel. Your partners, like your clients, will want a truly transparent system. Similar to the customer service portal, the channel partner portal should support desktop and mobile devices. Done right, this portal can make your company easier to work with than your competitors – sharpening again your competitive edge.
Functionalities to consider include:
Channel partner portal features and benefits
|Portal feature||Lets the channel partner:|
|Application submission||Submit applications through mobile or desktop tools|
|Application status||Check status of pending applications|
|Online chat||Easily access in-house representatives, saving time for them and for your agent|
|Portfolio reporting||Gain real-time access to their slice of your portfolio, driving them to your portal|
|Document generation/storage||Access documents so they can be reviewed and sent directly to their clients|
Investor portals: providing access to key performance metrics
Regardless of how your leasing operation is funded, someone will always be interested in portfolio performance. Assuming outside investors are involved, a business intelligence (BI) portal offers easy access to key performance metrics. Providing an open environment to prospective investors, including a custom investor reporting dashboard, may be the difference between your firm attracting investment dollars and your competitors winning those dollars.
You can build your BI portal on several business intelligence platforms, from such well-known names as Oracle, IBM and SAP. But the world of Big Data – data that has grown so massive, it’s difficult to process through traditional tools – has also helped usher in a host of cloud-based solutions that should be on your shopping list. At the very least, a system of this type should focus on the dashboard metrics shown here:
Investor portal features and benefits
|Portal feature||Lets the investor:|
|Pipeline volume||Use a dashboard of open applications to check the status of deals in the pipeline and channel sources|
|Portfolio performance||View delinquency history, including geographic and industry data, along with quarter-over-quarter data showing trends|
|Cash data||See a cash projection as well as how timely cash is being applied to contracts|
|Asset analysis||Look at the portfolio asset by asset, including asset type, location and residual information|
|Portfolio projections||View portfolio run-out numbers showing expected income and depreciation data|
The power of user engagement: mining the value
Competitive advantage can be hard to quantify. Sometimes it’s difficult to know which software projects will bring the biggest bang for the buck. A key gauge for determining value is how well a system delivers an engaging online experience for those outside the company. Some off-the-shelf products help create this experience, but they could also be built as one-off custom portals.
However you look at it, profit, or more profit than your competitor, can be derived from carefully selecting software. The result? Increased efficiency in operations, customer loyalty that helps power growth, a channel of partners that favors working with your company over your competitors, and an investment community that rewards your enhanced business performance.
ABOUT THE AUTHOR
Mitch Kaufman is president of IFS Technology Solutions. Launched in 1994, IFS provides industry-leading products, custom software, and IT services to support client needs throughout the U.S. The company serves a wide span of industries and organizations, from small to large enterprises, with a full range of IT services and software products – headlined by its flagship offering, IFSLeaseWorks. IFS innovations, focused applications and support are expressly designed to help companies improve business processes, enhance productivity and grow market share. Mitch was recently elected a member of the Service Provider Business Council of the Equipment Leasing and Finance Association. The council represents the interests of industry providers to the U.S. equipment leasing and financing industry.