People issues that arise with major system changes may be an even bigger consideration for equipment finance companies than the actual features of the software. That according to industry experts in a recent podcast by The Alta Group. The full transcript is available at this link:
PDF-The Human Side of Change Management in System Upgrades _ The Alta Group Podcast

Here are just a few takeaways from The Human Side of Change Management in System Upgrades. The podcast discusses how internal users, customers, and business partners influence ─ and struggle with ─ major software changes. It features host Jon Fales’ interview with John Rizzi and John Hurt. Rizzi is leader of Alta’s digital advisory practice and Hurt is a consultant with the practice.

Customer-Facing Applications Digitization efforts that streamline and improve the customer experience are a major focus of the equipment finance industry’s current technology activity.

“While a lot of those initiatives have been successful and have automated the lease origination process to a great degree, we’ve actually seen where companies make a pretty erroneous assumption as to whether a customer really wants to use a particular application or a new application or a mobile application device,” says Rizzi.

Some companies have spent considerable time, energy, and money on mobile apps, only to have them “met with a pretty significant yawn,” he adds.

Lesson: Assume nothing. Remember to survey customers when developing the business case and project plan for any customer-facing applications.

Configuration vs. Customization

Many legacy systems were built with custom applications out of necessity but “today’s modern systems really accommodate the leasing business more than they had in the past,” Rizzi notes. “And what we see sometimes in new implementations is the desire for the clients to try to maintain their existing way of doing business and their existing way of working with new applications. And they’re forcing…we’re trying to force software providers to customize this as opposed to allowing the software providers to simply configure.”

He recalls learning about one company that became so embroiled in customizing for different country operations that the project was scrapped after several years and several millions of dollars. “And the company winds up installing a Pan-European system with less than 20% of the customizations that they had in the first go around, and the implementation goes well, and everybody is actually using the system 80% the way that was built out of the box,” he says.

Lesson: It’s better to configure than to customize. If a unit says customization is needed, have them justify the added time and expense.

Get Comfortable

Most of us struggle with change. It takes time and effort for key stakeholders to feel comfortable with a planned system upgrade. Invest in it, advises Hurt.

“They are complex systems, they are big money, they have big disruption, and there’s a lot of functional richness to them that you’re not going to get in a couple of eight-hour demos,” he says. So, spend the time needed up front to get comfortable with the application capability. Be certain the service provider understands your business, can articulate what your business needs are, and can show how their system aligns with your requirements.

Make sure that you have “a comfort level that you are driving the right change into your organization” and have “the opportunity to identify all the areas of change that you could potentially take advantage of,” he adds.

Lesson: “Pre-implementation work pays huge dividends,” Hurt stresses. Take your time with RFP structuring and pre-demo evaluations. And consider an extended discovery period if necessary.

The Human Side of Change Management in System Upgrades and other Alta podcasts are available on Apple podcast, Google Play, Stitcher, TuneIn, and on our website.

Recent episodes cover trends in Latin American equipment finance, the ELFA Annual Convention, women in leasing, and the future of the “hell or high water” clause in leasing contracts. There are also links to a Lend Academy podcast on fintech opportunities in equipment finance.