Building the future
Our customers expect the leasing industry to deliver offerings that reflect fundamental changes in the IT landscape.
I went to two asset finance industry conferences recently: Leaseurope in the summer, and Leasing Life in November. At both, I had many thoughtful and thought provoking discussions on the future of the leasing industry in general, and IT leasing in particular. Many common themes emerged, and I thought it would be interesting and helpful to share my reflections.
Talking to our customers, their main concerns today are not how to structure the balance sheet (which IFRS 16 will soon make irrelevant anyway) nor how to get low cost financing. They are much more concerned with how to manage the complexity of an IT environment where every employee walks around with a data centre in his pocket. The question is not how to process data at the lowest possible cost. The critical question now is where is the data? In this context, the words like ROI, liquidity ratios, capital vs. operating lease have less relevance. Today the hot topics are trust, transparency, services, ownership, the circular economy and privacy.
These values and issues are front and centre at the moment. These topics are invigorating the debate within and between the IT sector and the leasing business. How they are addressed will have a fundamental impact on our industry, and on 3 Step IT’s future.
There is no doubt that there have been issues of trust in the asset finance industry. But as I look at current trends, advances in technology will force everyone to be ever more transparent. The winners will be the players who show they are not afraid of transparency; on the contrary: they will make transparency a key element in their offerings.
Services are key
For the leasing business itself, I think pure leasing, is no longer viable. Looking at the IT sector as a whole, technology leasing has not grown in the last decade. This is because the leasing industry hasn’t managed to deliver offerings that reflect the fundamental changes taking place in the way that our customers manage their IT infrastructures, the way they ‘consume’ IT. To have a relevant offering requires innovation, to develop novel, valued and practical services to complement a leasing contract. The winners will be those who successfully build these services.
Access over ownership
For the asset finance industry, the opportunity lies in offering a comprehensive subscription-based service model as an alternative to IT asset ownership. Variable capacity, product service systems pose new challenges the leasing industry has to understand, so that it can deliver the products and services our customers increasingly demand.
The circular economy
Most customers do not put the circular economy high on their priority list today. That is changing, and changing faster in some countries than others. As society understands more and more the benefits that can be derived by re-using the planet’s resources, companies that can demonstrate that they are offering circular economy solutions will gain a substantial competitive advantage. We want to be both at the forefront of circular economy thinking, as well as delivering practical solutions. Sustainability lies at the core of our life cycle offer today. We plan to develop our circular economy capabilities. We aim to make sustainability a competitive differentiator in our future business model.
Building on our strengths
3 Step IT was created to provide our customers with offerings which combined financing with end-to-end life cycle management for financed devices. This original idea provides the foundation we need to provide solutions for the world today, with its changing priorities.
We have the opportunity to be a thought leader, and a solution leader, in this industry. We can use our strengths to design and build extensive partner ecosystems to provide the more complete service customers seek. Keeping our business relevant, service-driven and capable of constantly adapting to the rapidly changing IT environment is the key to our success.
New technologies give us the tools to adapt to the new environment, and the opportunity to deliver these new solutions rapidly. This is a moment to seize!
Carmen Ene, CEO