Operational Effectiveness & Enablement
What is Operational Effectiveness?
Operational effectiveness is a measure of how an organization’s processes, resources and overall design work together to deliver the highest value and best experience to the customer. While KPIs and other benchmarks can give the illusion of effectiveness, every organization has an untold story that lies beneath the surface. Within this story lies immense opportunity to deliver higher value to customers and other stakeholders. The Alta Group draws on advisors who have decades of experience working in all aspects of equipment finance to deliver operational effectiveness and enablement solutions that are tailored to the needs of each unique client. Drawing upon lessons learned in careers that took them to the top levels of leading global organizations, our advisors help identify the unseen opportunities to improve effectiveness and efficiency within equipment finance organizations.
“Operational effectiveness is the cornerstone of sustainable success; it strengthens processes, reduces costs and enables businesses to deliver better value to customers by swiftly responding to market demands, thus driving long-term growth.”
Valerie Gerard
Co-CEO, The Alta Group
We deliver this result through a proprietary operational efficiency framework, under which we conduct a tiered gap analysis that identifies and solves critical operational challenges while laying the foundation for continuous improvement in deficient areas. The result positions companies to thrive in their present and future industry marketplace by enabling a better bottom line and greater customer satisfaction.
Given The Alta Group’s exclusive focus on and pre-eminence in the field of equipment finance and leasing advisory, we thoroughly understand the market participants we serve. These include captive finance companies, bank-owned leasing companies, independents, and service providers to the equipment-finance industry. We are closely involved with all participants in the equipment-finance space on the ground level. This kind of familiarity provides our clients with best-practices-based performance management solutions that create, sustain and build upon outstanding operational effectiveness.
Maximizing Operational Effectiveness with The Alta Group
Optimizing operational effectiveness requires the right perspective. Helping clients to see their operations from every possible perspective is foundational to The Alta Group’s operational effectiveness advisory work. We zoom out from the problems clients identify in day-to-day operations to help them gain an understanding of how challenges on the ground fit into the bigger picture of how the organization is designed. We help clients see not only how the problem looks from within the organization, but more importantly how it looks from the customer’s perspective. We deliver this through our proprietary operational effectiveness framework.
Our analysis starts with your company’s strategy and value proposition, the products and services you perform for your customers, the key elements of your program governance, your metrics, bottom line and controls around credit and asset risk. After that, we take a deeper dive centered around the processes embedded in the three phases of the leasing cycle: put-on, put-through, and take-off.
- Put-on is all the activity of the sales process: A client seeks out a financing source or that source’s financing team finds the client, a proposal is created, credit is obtained, the application is reviewed, priced, documented, and finally funded.
- Put-through is all the activity to service the loan or lease while it’s on the books, namely, billing, collection, and customer service.
- Take-off concerns what you do with the equipment at the end of the lease: whether you keep it, release it, release it to the same obligor, sell it, or lease it to somebody else.
Alta Group Client Success Story
Alta is adept at helping clients realign their organizations to make them more efficient. In one case, we conducted an operational assessment for a company experiencing profitability problems and developed an action plan to remedy them. First, we conducted a thorough analysis of the organizational design and its related success metrics. Armed with this baseline, we conducted a multi-point analysis and a multi-variable expense study across all verticals, ticket sizes and origination channels. We then conducted a deep review of overhead and other costs, as well as an employee count-and-function study to yield insights into new business volume, net earning assets, and revenue. The process uncovered significant functional misalignments and led to an evidence-based solution to reorganize personnel deployment through staffing reassignments.
Alta is adept at helping clients realign their organizations to make them more efficient. In one case, we conducted an operational assessment for a company experiencing profitability problems and developed an action plan to remedy them. First, we conducted a thorough analysis of the organizational design and its related success metrics. Armed with this baseline, we conducted a multi-point analysis and a multi-variable expense study across all verticals, ticket sizes and origination channels. We then conducted a deep review of overhead and other costs, as well as an employee count-and-function study to yield insights into new business volume, net earning assets, and revenue. The process uncovered significant functional misalignments and led to an evidence-based solution to reorganize personnel deployment through staffing reassignments.3 Components of Operational Effectiveness and Enablement
The Alta Group’s approach to operational effectiveness and enablement advisory is specifically tailored to the needs of each client. But three areas of focus are common to all engagements, and demonstrate how we help clients take a comprehensive approach to operational effectiveness, moving from the highest levels of how the organization is designed, through the day-to-day workings of company processes, down to the granular level of what technology solutions are in place to serve the organization.
1. Organizational design. Every operational effectiveness engagement with The Alta Group begins with a scan of the organization’s structural design. How do various functions interact and share information? How is accountability built into the design? Does the structure align to the organization’s strategy, goals and value proposition? Asking questions at this higher level can lead to more lasting and targeted problem-solving.
Alta’s advisors have experience across all types of equipment finance business models and can home in on design questions that impact specific business types, from captives, to bank-owned firms, to independents. We can help spot areas that merit further examination, such as whether a shared-services model may be challenging the efficiency of the leasing business, or whether a siloed structure may be creating logjams in important processes such as documentation, invoicing or collections. Our advisors help firms walk through all of these industry-specific considerations with the benefit of decades of experience with companies across the globe.
2. Processes. Among an equipment finance organization, the processes that facilitate functions within the various stages of the leasing cycle are opportunities for achieving greater effectiveness. Streamlining processes across the leasing cycle improves effectiveness by spotlighting and discarding redundant and unnecessary front-end or back-end process activities or steps. By carefully analyzing current processes to discover opportunities for better synergy and communication across functions, we develop customized solutions to harmonize key value chain interdependencies and ensure a seamless wing-to-wing process. Our advisory teams are hand-selected to meet the needs of each individual client. This allows our clients to benefit from the decades of experience our advisors have observing, managing and improving processes across all functions within equipment finance organizations. We take a deep-dive into processes across all functions of the organization, stack-ranking the gaps we identify, and recommending remediations to close those gaps.
3. Technology. Technology enables the day-to-day operation of many aspects of key organizational functions. Once we have looked in-depth at an organization’s design and processes, it’s essential to ensure the technology tools in place to serve the organization are an appropriate fit. This requires a thorough understanding of how the technology in place will impact the function and efficiency of core processes throughout the leasing cycle. Our advisors examine current systems to find bottlenecks to efficiency, identify aged platforms and root out systems that may not be capable of supporting emerging products. In the case where a new solution is needed, Alta’s advisors can help firms think through the potential implications of introducing a new technology solution, and offer strategies to ensure a smooth integration. We also work with strategic partners to help our clients anticipate the changes that will come as AI capabilities create new opportunities for tech tools to boost effectiveness, a topic we have written about in industry publications such as the Monitor.
The Alta Group’s proprietary operational effectiveness framework ties all three of the above elements together to systematically detect weaknesses in existing operating structures and turn them into strengths by finding the right digital instruments to heighten effectiveness. The comprehensive action plan we deliver to clients gives personnel clear direction on actions to take each week, month, quarter and year to ensure continuous improvement of processes and overall operational effectiveness.
Alta Group Client Success Story
- Exhaustively reviewed policies, procedures, processes, governance, IT infrastructure, and controls.
- Established a capabilities-and-control baseline around origination, pricing, credit pricing, operations, funding, booking, collections, and asset management functions.
- Identified put-on, put-through, and take-off process gaps. We stack-ranked the gaps and recommended how to remedy them and adopt additional controls. We also included recommendations for enhancing KPIs.
Then, after matching our findings with industry best practices, we trained and coached our client to prepare to go to market by resolving the gaps we uncovered.
When a publicly owned client decided to launch a third-party financing structure to align with its small and midsize business customers, it asked Alta to help determine if the new business was ready to begin effective operations. We conducted a three-part operational assessment that:Importance of Operational Effectiveness
Operational effectiveness matters across all the business sectors that The Alta Group serves – banks, independents, captives, original equipment manufacturers and fintechs. We deploy our proprietary, best-in-class database to develop comparative operational efficiency metrics for multiple business models and then interpret that data for actionable insights into organization design, key processes, support technologies, and the skill sets and investments required for effective performance. While our recommendations are grounded in industry best practices learned over decades of experience in equipment finance organizations of all types, there is no one-size-fits all solution to improving effectiveness. Our advisors listen closely, question assumptions and take an agile approach to engagements, ensuring that we are accurately identifying the problem and tailoring solutions that will yield discernible results.
The Role of Technology in Operational Effectiveness
Technology for its own sake doesn’t guarantee effectiveness. As with all other aspects of operational effectiveness, technology must be examined in the context of how well-suited it is to the processes it is intended to optimize, and how the interplay of these processes serves the overall goals and strategy of the organization. Once these bigger-picture questions have been answered, Alta’s advisors can identify opportunities for achieving greater efficiency through better deployment of technology solutions.
The Alta Group’s advisory team is made up of senior executives who are thoroughly versed in how technology can deliver operational effectiveness, who can transition clients into the digital age, and prepare them to exercise digital leadership, with the appropriate tools and technologies.
Our advisors are forward-thinking leaders who can help you think about the operational effectiveness implications of industry-changing advancements such as generative AI, predictive analytics, the Internet of Things and machine learning. These advisors are recognized thought leaders who regularly share their insights on these trends through contributions to industry publications such as the Monitor and in Alta’s quarterly newsletter.
Case Studies
Choose The Alta Group for Operational Effectiveness
Equipment finance businesses are a complex combination of functions that must all work together toward the overall goals of the organization. No one ingredient, whether it’s world-class talent or state-of-the-art technology, can guarantee operational effectiveness across the organization. Working with an experienced third party can help peel back the assumptions that may be masking opportunities to achieve new levels of efficiency and deliver a superior experience to the customer. The Alta Group’s advisors bring decades of experience within leading global equipment finance firms to the task of helping clients improve effectiveness.
When and if your business needs an efficiency boost in any of these areas, please get in touch with us. Our seasoned experts know your industry, your region, and the types of clients you serve and can partner with you to create and effectively implement customized solutions that get optimal performance results.
FAQs on Operational Effectiveness
Operational effectiveness refers to an organization’s ability to eliminate wasted time, work and material while still producing a superb product or service. Traditionally, it balances input such as costs, time, and employees against output, which includes items such as quality, revenue, and customer acquisition and retention. But the fast-changing contemporary business environment demands an expanded understanding of operational efficiency that extends to automation, AI, digital transformation and sustainability.
The Alta Group has developed a proprietary operational effectiveness framework that enables our advisors to zero in on the specific areas where equipment finance firms can make improvements to maximize efficiency at all stages of the leasing cycle. This framework provides the foundation for a tiered gap analysis that launches us into productive examinations that can unlock untapped capacity and potential for our clients.
The Alta Group examines operational effectiveness by looking at three areas that take the view from the top of the organization down to the details of daily operations. These are organizational design, processes and technology. By moving from the big picture of the organization’s goals and governance, down to the operation across various functions, we ensure that solutions are tailored to serve the overall goals of the organization and deliver a superior experience to the end user.
Operational effectiveness makes it possible for a company to execute its core business activities to achieve maximum productivity and efficiency while minimizing waste, cutting costs, and maintaining high-quality standards.
Expected Benefits
- Maximize operating efficiency and ROI
- Accelerate change
- Deliver enhanced customer satisfaction
