Mission Critical Technology Delivers the Flexibility and Agility to Compete
by Rita E. Garwood Vol. 48 No. 1 2021
The pace of technology adoption has accelerated over the last year, and what was once considered innovative has now become essential to staying competitive. Monitor checks in with three technology leaders about the mission critical technology of 2021.
How has the technology that equipment finance companies use evolved over the last one to five years?
Jeffrey Bilbrey: To manage growth in terms of volume, sophistication, or both has always required ever-evolving technology. Five years ago, equipment finance companies were looking for better CRM systems for sales lead management to put in front of their pricing and underwriting process flow. Five years ago, equipment finance was also looking for ways to customize back office systems to cater to new product offerings. All of this meant more IT, not less. Long term, the practice created guardrails that limited adaptability and created reliance on internal IT or external vendor teams, thus paradoxically taking control away from the business.
The path to regaining that control today can be found in the advent of true cloud platforms with low-code/no-code configuration and flexible technologies that enable seamless automation. These new platforms ensure a modern data estate (data being accessible from all systems), and they make light work of implementing AI, chatbots and portals because you don’t need to “integrate,” you simply turn them on. The options available today are much more flexible, fast and future proof.
Roopa Jayaraman: The industry has become highly crowded and hyper-competitive, and technology has evolved as the enabler — what differentiates a company. As buying trends continue to shift towards consumption “as-a-service” models, businesses want to think differently about how they go to market. Additive to the financial product now is value-added services and that requires much more agility and flexibility in the platform being used. Beyond enabling core business processes, to be a total technology solution for asset finance companies today, you also have to enable their end customer experience. Providing the necessary digital experience to promote fast and frictionless interactions across channels is a huge differentiator.
Another seismic shift in the industry is the move to cloud — it is now front and center after a steady growth trajectory over the last five years. The pandemic has certainly accelerated the move, too, as it reduces the burden of maintaining IT headcount that is co-located. And for us, it is not just a lift and shift but a cloud-native platform that can be consumed “as-a-service” — use only what you need.
Eldon Richards: The equipment finance industry is in the midst of a digital transformation. Over the course of the last five years, financing firms of all sizes have faced increasing pressure to match the expectation of their customers for an easy-to-use, frictionless process for obtaining financing for business equipment. The challenge has been how [to] enable a streamlined process when there are so many moving parts to both origination and ongoing contract management. This has begun to change with the introduction of cloud-based solutions.
Saying “the cloud” can have many meanings, but for clarity, the version that has had the most impact to the equipment finance industry is software-as-a-service (SaaS), where the technology vendor takes the responsibility for managing both the underlying infrastructure and the application, allowing their customers to focus on growing their business. This, coupled with open APIs for integration into other technologies, provides an ecosystem approach aligned with business needs.
Which technology trends that were recently considered innovative have become mission critical and why?
Bilbrey: A CRM solution to handle the communication surrounding finance originations has been a must-have for a while now, but having the entire finance origination process built on — not loosely coupled to — an intelligent, true cloud CRM solution built for purpose (compared to a generic CRM) is now truly mission critical. Being able to self-manage the entire process of pricing, underwriting criteria, document generation and funding in that same contact center and workflow engine is fundamental to being adaptive to fast-moving market opportunities. Further, if a company wasn’t ready for a distributed workforce before the pandemic, they better be now, and to do that requires being on a true cloud platform that is accessible anytime, anywhere and will not be disrupted by time zones, location, office presence or other acts of nature.
Jayaraman: Cloud technology has become mission critical, both as an infrastructure as well as cloud native feature availability to enable asset finance companies to build out their product-services mix. A few years back, cloud might have been on the back burner. Today, with ~90% of companies across industries adopting cloud services to varying degrees, the shift has become an integral part of any CIO roadmap.
The other mission critical technology-enabled area is data — how do you capture it, synthesize it, transform your business from it? Taking the time to do a data modernization exercise can be hugely valuable to companies looking for the tail winds to drive change. From top line portfolio governance to understanding performance across regions to tracking SLA response of customer service — there are infinite possibilities. Companies with more mature data practices can already start to shift into predictive and advanced analytics, integrating a layer of cognition with machine learning and so on. Cloud and data analytics have become almost like core business KPIs.
Richards: The technology trends that have become mission critical center on the ability for finance firms to operate at anytime from anywhere. With the onset of the pandemic and the move to remote work, the ability to communicate and continue the continuity of operations was paramount. This has pushed many firms to adopt collaborating and video conferencing technology to keep the business communicating. It has also led to a move to cloud-based solutions which include integrations with technologies like e-signature to keep new contract[s] coming in even when in-person interaction[s] have been very limited. This trend towards an integrated approach will only accelerate from here, with more demand to have an integrated technology approach that enables a seamless customer experience while removing tedious manual steps for the finance firm.
How is a platform approach different than other solutions and why should equipment finance companies take this approach?
Bilbrey: Business applications users know that speed of change, access to data and ease of integration are keys to technology-enabled success. However, traditional software and database systems, even if “hosted” on a cloud, are still shackled by the need to manage too much infrastructure on a closed system. New business application platforms such as Microsoft Dynamics allow for the use of global-leading solutions that allow for extensibility (configuration, customization) without having to worry about databases, infrastructure and vendor-managed proprietary software. A platform brings infinite scale and compute with low-code/no-code business configuration capabilities to create extreme agility, scalability and security. Plus, the best platforms also bring business friendly capabilities like RPA, virtual agents, AI, IoT, blockchain and so much more. Finally, business solutions built on a platform are getting constant upgrades from the platform vendor (e.g., Microsoft). Wouldn’t it be great if your technology solutions were always leading edge instead of always five years (or more) behind?
Jayaraman: A platform solution has a slightly different paradigm in terms of how the technology and the modularity is designed. By design, it’s an ecosystem of building blocks that can be brought together to really deliver value to an end customer. So, one of the core thing[s] that we’ve intentionally done, specifically over the last five years to align with the platform thinking and philosophy, is to make sure that we are building with certain design principles in mind. The way we’ve designed it is with a lot of modularity in mind. So as a customer, you can come in and you can pick and choose the tools you want to use and then, over a period of time, experience the entire platform.
The second design principle is a lot of self-serve. Most of the successful platforms in the world — like Salesforce, Amazon, or other market leaders — have the tools for the end customer to self-serve. The tools we have in market within the platform have that capability so our end customers can use and extend our platform to be able to deliver value for their business.
Third, from a future proofing perspective, we must have necessary layering from an architecture point of view, so even if there are other technology transformations that we see in the next four to five years, we don’t end up with architecture that becomes obsolete.
What is the most important thing that established equipment finance companies need to consider when it comes to IT architecture?
Jayaraman: IT at large [a]s monolithic architecture is something that’s on its way out, really because of the maintenance overhead it has. Archaic design makes it harder to make changes and that ultimately means companies are left behind because their architecture is too hard to change. Composable architecture tries to break those patterns and makes sure that you have the modularity in design built in so that it’s easy to upgrade and easy to change as you go. As we embrace the cloud, it becomes easy to mix all the components and deploy. So, another example of how cloud is providing even more opportunities to deploy and provision software on a much more real time, flexible basis.
Richards: The most important things for established finance companies to consider in IT architecture are platform agility and the ability to harness data. For established firms, the differentiation that once came from a large IT investment does not have the same return today. The firms that will be successful and able to capitalize on market trends and customer needs are those that view computing resource as the commodity that they have become and invest in partnering with technology providers that provide flexibility to evolve quickly as market needs change. The most valuable asset established firms own is their data, but harnessing this to make informed business decisions requires both appropriate collection of data and the ability to utilize tools like artificial intelligence and machine learning to sort through the [data] to find meaningful insights.