As we enter a new year, it seems a timely moment to reflect on the business challenges that the leasing sector has faced and will continue to face as the year progresses.

Clearly, there has been a huge boom in remote working services and the technology to support this change. At the same time, everyone in the industry is keenly watching how, or whether, global supply chains right themselves. Much equipment and many components are manufactured in the Far East, and supply chains have seen major disruption over the last few months¹. Some OEMs are openly talking about supply chain reform and nearshoring their manufacturing operations².

This is not just a matter of new business supply, but also of delivering reliable and dependable maintenance and service levels.

It is not, however, existing client service which is the most immediate headache. The primary concern is that sales pipelines have stuttered badly because of caution and lack of confidence on the part of the end customer. Systems, equipment, solutions sales have all seen a slowdown (at the least). But there is evidence that businesses who have already digitalised their operations and sales processes have coped better than those who had not reached this point³.

In fact, some areas of technology are seeing a mini boom – counter-intuitively. Software is making a major contribution to the remote working, with meeting apps, version control, CRM, automated research, and many other applications making remote interactions as effective and ‘natural’ as possible. Security software is also popular, as usage of data exchange and hosting in the cloud booms and organisations seek to protect their information and IP.

Nor is this simply an issue for today and the present crisis. We are constantly hearing from our vendor partners that digitalisation is a strategic priority as generation shift moves from babyboomers and Gen X, to Millennials and Gen Z. These digital natives are increasingly both the customer and the upcoming supply-side sales generation. So, slick digital-first operations provide convenience and capability that helps to close sales (customer demands), and helps to attract the best talent (vendor sales requirements).

As the preferred financing partner for many vendors in the UK, our own experience through the pandemic crisis provides a case in point. Now, more than ever, the value of financial services can be seen, supporting business continuity despite the COVID-19 crisis. As businesses work their way through the current market difficulties, financing is helping to reduce costs, conserve cash and preserve precious capital reserves which are proving so vital to commercial survival. Financing options offer fixed payments and terms which reduces budget uncertainty in a volatile period.

At the same time, however, the fact that we have digitalised our business is also proving its worth, supporting our vendor partners. We have been able to deliver continuity for credit decisions, transaction processing and payments, all because they can be done digitally and remotely. Our digital tools offer 24-hour access, automated credit decisions, e-signature capabilities, e-payments, everything needed to keep business going and beat the threat of disruption.

The e-signature document flow means contracts are digitally signed within hours, rather than days or weeks and that is the case no matter where a vendor is located. Digital credit capabilities mean that the salesforce has access to these tools wherever they are – at home, in the office, or through mobile whilst on the move. The business outcome of speedier, easier finance processing is fundamentally important to a business - the improvement in cash flow that financing offers over cash sales can increase payment periods by as much as 30 days.

In addition, our vendor partners have a digital window on their portfolio, which means they can spot any business opportunities that are available, despite the crisis. Finally, we have also been able to support our partners with their own cashflow management by using our finance solutions as part of the sales process. There are no payment terms as with cash purchases, so as soon as the equipment is with the customer and the completed and correct documents are with us then payment is within 24 hours – again, all managed online.

These advantages of digitalisation are frankly here to stay. Nor should we be ageist about digitalisation. While there is no question that digital demand is shifting with the upcoming generations, if you are neither a Milliennial (born after 1980) nor a GenZ (even younger), the digitalisation imperative is still compelling. Many older people have grasped digitalisation with both hands, to their tangible business advantage. The issue is not whether firms have digitalised, but how easily they can integrate with third parties, such as financiers, accountants, partners, channels, supply chain, and so on.

Several times recently we have heard of business owners looking to sell up and realise the fruits of their decades of hard work to fuel a comfortable retirement. Where the business has digitalised, this has tended to have an impact on value and speed of sale. Firstly, a digitalised business is a future-ready business, and therefore more valuable to the buyer. Secondly, as we noted before, it may have attracted and retained digitallyminded people. Third, digitalisation makes it easy to extract data and analysis about business performance at the drop of a hat, and that can massively speed up the business sale process.

The pandemic crisis has certainly accelerated and highlighted the real-life benefits of digital business. It has helped keep the wheels turning, and we know from our own recent experience that being able to deliver integrated financing options through modern digital tools has kept many vendors’ sales flow alive. Given those obvious benefits, the question nowadays is why a business should choose to ignore those advantages by not going digital.

¹ McKinsey, Coronavirus and technology supply chains, 1 Apr 2020

² HSS, Nearshoring trend ramps up suggests Gartner survey, 25 Jun 2020

³ McKinsey, The B2B digital inflection point, 30 Apr 2020