Big data, the “Internet of Things,” digitalization and Artificial Intelligence are hot topics and some organizations are applying these technologies. But what are lessors doing?

In a timely article for the Monitor’s Jan/Feb. 2018 edition, Ian Robertson principal of Alta’s Invigors asset management practice, explores what is likely to drive more leaders in our industry to move forward, starting with more strategic data-driven asset management. This feature appeared just ahead of the ELFA’s Equipment Management Conference, scheduled for Feb. 25-27 in the U.S. Robertson says that:

  • Equipment financing executives should no longer be hamstrung by the notion that technology projects will take years to implement.
  • The ability to exploit data from smart assets with external partners and OEMs will affect overall market position and enable deeper customer engagement.
  • Effective exploitation of both internal and external data sets can lead to better residual value setting, and improved risk management.
  • Organizations need to continue to differentiate themselves, and new data led insights are enabling them to provide more services and novel pricing structures.
  • Proactive monitoring of customer needs and their fleet usage and behaviors can generate more sales with both higher margins and increased service revenues.

Robertson suggests that ongoing data mining should measure a customer’s equipment usage and then enable lessors to find ways to bundle services with financing. Fleet management is one example often cited. Providing detailed asset information and analytics useful to customers in both self-service platforms and consultative client engagement can increase loyalty and customer retention.

The trend toward managed services and consumption-based models requires a greater understanding of equipment performance and values throughout a lease agreement and upon return of equipment. Leaders in managed services seem to be primarily in technology, healthcare and transportation but the approach is emerging across the industry.

“Several platform and service providers address the services and asset data assembly issue. These providers offer dynamic asset-level reporting and the associated asset-level billing services, should this competence not be already available within the lessor,” Robertson says.

These service providers can also provide end-customer interfaces, enabling clients to self-service their mid-term and end-of-lease management, reducing internal operational costs and enhancing customer satisfaction, he adds.

Asset management will increasingly become a value-creating element for equipment lessors and have a bottom-line impact to benefit well beyond the asset-management functions of the past.

The Alta Group believes there are extremely viable business cases to be made for selected investment in what have become proven technologies, with particularly strong cases to be made in the asset-management domain.

Invigors EMEA, part of The Alta Group, provides a comprehensive range of consultancy services to the asset finance industry across Europe, the Middle-East and Africa. These include corporate restructuring, strategic marketing and research, M&A, asset and lifecycle management, funding, tax, regulatory and accounting services, and business transformation, together with captive and vendor finance.

In the U.S., the asset management practice is led by Carl Chrappa.

This blog is based upon the published article titled “Data-Enabled Technologies Drive Enhanced Asset Focus,” in the Monitor’s RAISING the bar column.