ELFA Business Tech Performance Index Reveals Top Trends
FEB 9, 2016 - 6:52 am
Staying competitive in a digital world is making replacement of front- and back-end systems a top priority for equipment finance firms, reveals the 2015/2016 Business Technology Performance Index (BTPI), released by the Equipment Leasing and Finance Association (ELFA) and Capgemini, a provider of consulting, technology and outsourcing services.
The 13th annual BTPI finds that while the equipment finance industry has been a slow adopter of digital technologies due to the constraints of working with legacy platforms, strong recognition exists for capturing digital capabilities via replacement of back-end systems while continuing to make improvements on front-end workflows.
“ELFA is pleased to offer the 13th annual Business Technology Performance Index. We encourage our members to read the report to gain insight into the technology trends that equipment finance companies are using to drive their firms into new opportunities and improve operations,” ELFA President and CEO Ralph Petta said.
Michael E. Baez, manager of Banking & Diversified Financials for Capgemini Financial Services, said, “In the wake of intensified competition, increasing compliance, shrinking margins and evolving customer demands, leading equipment finance firms are trying to meet these challenges by looking to replace their front- and back-end systems. Core legacy platforms are antiquated, expensive to maintain and in many cases, don’t meet current or future business needs.”
Key findings of the BTPI report, which is based on industry research and input from ELFA members, include:
Replacement of front- and back-end systems remains a top initiative for equipment finance companies in the near future. Front-end systems generally refer to originations, or the activity related to a transaction from the time of application to booking, including credit underwriting and documentation. Back-end systems generally refer to servicing, or the period after the booking of a transaction and includes accounting, customer service, collections, end of term and asset disposition.
Reversing the traditional focus on the front end, 40% of the survey respondents indicated that a back-end platform replacement would be considered in the next 18 months, while only 25% said the front-end platform would be looked at.
A total of 60% of respondents indicated that their core back-end platform does not meet their future needs, while 40% indicated that their back-end platform doesn’t meet their current needs.
Nearly half of all respondents indicated that their core front-end platform does not meet their future needs, with 40% of respondents looking for increased workflow capabilities.
Data show that a majority of companies are more interested in establishing a single, enterprise-wide package-based solution, with almost 40% reporting interest in implementing best-of-breed solutions from multiple vendors.
Big data, cloud computing and mobile adoption is set to grow:
A total of 61% of respondents said big data is becoming a driver of current revenues as it helps them identify opportunities for cost savings.
While a quarter of respondents do not currently have cloud computing and 60% consider themselves adoption beginners, it is expected that cloud capabilities will grow in the coming year.
Over half of the respondents indicated that mobile is a best-in-class offering and they have planned for it in the future, despite 60% of companies currently ranking themselves at the bottom of an adoption lifecycle.
Effective digital strategies offer competitive advantage across equipment finance companies’ value chains. These include improvements in operational efficiencies, product innovation and access to new channels and markets. The BTPI report offers strategies for equipment finance firms to improve their return on IT investment and a checklist of system replacement costs. It also provides insight into Capgemini’s Technovision framework to assess the business potential of new technologies, design principles and business transformation trends.
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