“Reshaping Vendor Programs with a New Generation of Leadership” Covers Emerging Trends as Featured In the Monitor

June 15, 2022

Sustaining market relevance is a key challenge for vendor programs with a long history of providing equipment and service suppliers with turn-key financing options. The relationships they cultivated with program partners are rooted in collaboration and the ability to adapt to change, and now a new generation of leadership is driving more change that will reshape the industry in years to come.

Vendor programs are certain to benefit, says Diane Croessmann in this issue of the Monitor published in June 2022. Her article discusses an industry that places significant value on the talent of these incoming leaders, the power of social responsibility and the transition to a digital future.

Croessmann supports clients in developing strategy and competitive alignment for The Alta Group. She has more than 25 years of experience building successful vendor finance programs and is co-author of the Equipment Leasing & Finance Foundation’s recent report titled “The ESG Imperative: Understanding the Opportunities for the Equipment Leasing and Finance Industry.”

It’s important to read her article in the Monitor for those looking for an opportunity to be more deliberate in planning and aligning internal and external objectives among vendor program partners.

Croessmann identified three emerging trends:

  • A new breed of leaders with starkly different generational values and expectations.
  • The emergence of environmental, social and governance (ESG) goals as a necessary component of corporate responsibility.
  • The shift from analog to a more digitally relevant ecosystem.

“New leaders have a heightened awareness of technology, lifestyle agility, sustainability and social responsibility, and they perceive unlimited opportunities to change the end-user experience,” she writes. “They draw on their own experiences to define successful vendor programs.”

Recent regulatory and capital market requirements, meanwhile, have made ESG an imperative topic for boardrooms, investors and customers.

“In many cases, even the best existing vendor relationships will not survive if partner strategies around ESG value creation are not aligned,” Croessmann notes.

Vendor funding partners may be more specifically evaluated on their ability to support ESG-friendly circular offerings and their willingness to expand portfolios to new ESG equipment classes and service options. Circular offerings minimize waste associated with ineffective utilization and destruction of equipment at the end of a lease period, she writes.

With the potential addition of service management content to equipment transactions, to ensure that equipment maintenance retains a high standard, the extended useful life of that equipment can be leveraged across one or more end users. Fewer natural resources will be utilized to address supply/demand requirements, first-use equipment can be more effectively priced on a pay-per-use or consumption basis, and residual equipment can be transitioned to new or secondary markets.

“Providers of these offerings will be able to demonstrate their commitment to delivering improved asset utilization options to end users and should see equivalent benefits to their overall ESG performance attainment objectives and scores,” Croessmann writes. “With even more focus on these offerings than in the past, vendor partners who are unable to address capabilities for consumption pricing or second market utilization of assets will become increasingly irrelevant.”

The industry’s reliance on technology, meanwhile, shows no sign of slowing down. While digital applications for most equipment financing providers may have started with a focus on electronic signatures, digital platforms are evolving to span the entire ecosystem to include all stakeholders involved in the end-to-end equipment financing process.

Next-generation leaders will push to incorporate technology as a solution to improve business processes and personal flexibility, according to Croessmann. They also demand the use of technology to enhance the end-user experience.

“Although analog systems currently dominate the landscape for equipment leasing systems and applications, the demand for more efficient and user-friendly mobile/digital applications will increase,” she writes. “Hi-tech manufacturers no longer want a low-tech equipment financing platform.  The look and feel of a manufacturer’s brand can be diluted by a vendor partner who is still in an analog world.”

See the full article published in the May/June 2022 edition of the Monitor. Page 64.

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