The battle cry coming from the leasing
industry at present is: “Spend money now if you want to save money
later.”
Unsurprisingly, it is the leasing software
providers which are leading the chant. They argue that, despite the
recession, 2009 is a good year for lessors to invest in new
systems. After all, it is during a downturn that the benefits of
improved systems become evident.
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According to Andrew Denton, sales and
marketing director at CHP, there is “an issue of a lack of
confidence, which affects lessors just like everybody else in the
economy”.
He added: “But the reality is that this is a
very good time to invest, because now lessors have the opportunity
to understand what their system really does and see how they can
improve it.”
Tactical play
According to Denton, this is
particularly relevant in delinquency management, where a technology
investment in a downturn is simply “tactical play”.
“If you have an arrears problem, it is
important to have a leading-edge arrears system, and if you delay
that, you risk the problem becoming larger,” he said.
Sale of delinquency management systems is
booming at CHP – it is installing systems in four places at the
moment – and the same applies to its proposal management systems,
the software company said.
Meanwhile, White Clarke Group said it has
become “extremely busy” dealing with enquiries and invitations to
tender from large lessors.
Investments, according to its CEO Dara Clarke,
are coming primarily from “hot sectors”, particularly large banks
which are under political pressure to lend to SME-sized companies,
or simply see investing in new technology as an opportunity worth
seizing.
“Many banks that have asset finance
subsidiaries are finding that their traditional IT departments
aren’t flexible enough, so they are looking at how they can be more
commercially-oriented,” Clarke said.
This unexpected trend derives from lessors
having experienced the risks involved with the downturn, as well as
having more time to focus on non-business activities, such as
technology, than during boom times, he added.
A question of
resources
But not every lessor is inclined to
invest in new technology. Smaller lessors and captives, for
example, might not have the resources to implement new systems,
according to Clarke.
One option available to such companies is to
outsource their activities. According to LPM Outsourcing managing
director Philip Davies: “For some companies the last thing they
want to think about is investing in new systems, unless they have
total confidence about expansion”.
But LPM has received several enquiries from
companies looking at improving productivity within their existing
platforms or in “peripheral” areas of their activity.
“Although many lessors don’t seem to be buying
completely new platforms, they are working very hard to improve
productivity around what they have,” Davies said.
However, he highlighted that with enough
confidence to buy, lessors could get very good deals in terms of
pricing, although “investing in new platforms should not be driven
only by price”.
“There should always be a business case in
terms of what a lessor can deliver from the market,” he said.
But given the business case, the lower prices
on offer and the view to maximise the not-so-big amount of good
business out there, investing in new systems does not necessarily
seem so unwise.
