At the beginning of this year, I wrote an article for the NEFA (National Equipment Finance Association) Newsline magazine in which I discussed how to select the right financing platform for your asset and equipment financing business. As we approach mid-year, I have been having conversations with people in the industry who are in the early stages of building their budgets for the next fiscal year. This made me think I should revisit this topic and share some insights into how asset finance companies of all sizes have approached this important decision for their business. Over the next couple of weeks, I will be posting some best practices to consider when selecting a full-lifecycle finance platform.
Look for a solution that aligns with your business today and will grow with your business in the future
While this seems obvious, I have found that companies may compromise their business offerings or take on risk to get a new solution to work. This is not how the process should work. A couple of key things to keep in mind:
#1 – Find a solution that is proven to handle your business
There are capabilities that every asset and equipment finance company will need, but from our experience we understand organizations have unique requirements that provide competitive differentiators for your business. We live in an ever-expanding ecosystem of 3rd party solution providers that need to work together to provide an integrated work flow in the onboarding and portfolio management of your business. It is critical that the solution you select has the ability to integrate with your ecosystem. This is what motivates us to work with solution providers to provide pre-integrations to leading providers in the equipment finance industry. While you may be looking to replace parts of a legacy system to improve process and efficiency, there are most likely other aspects of your ecosystem that will not change and need to interact with the platform you deploy. As you research your options, I would encourage you to look for flexibility, extensibility, and interoperability of the platform you choose.
#2 – Flexibility is Key…Choosing a product solution vs. a customized platform
Platform flexibility is at the heart of the ability to deliver unique capabilities for your business. Custom deployments may seem appealing at the beginning of a project but there are extensive ongoing costs and considerations. Partnering with a product company, focused on delivery of solutions for a broad customer base, provides ongoing benefit to your business. New features are added for all customers. Once you deploy a custom solution, new features have to be added to each customer’s branch of code which may have significant ongoing cost. What happens if your business needs change in the future? Selecting a product company provides access to proven business functionality in use by other industry leaders compared to the risk of a deployment on a custom platform.
The system you choose should be flexible enough to differentiate your business offerings without the risk of a custom deployment that will not be sustainable for the long term. Technology and business alignment are an important first consideration as you evaluate asset and equipment finance technology. In my next blog post, I will explore the different options for leveraging this type of technology. Check back next week as we look at cloud, hybrid, and on-premise options.
Katie Emmel, Chief Operating Officer