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FlexLease. A Case Study report by: Dan Stephens. Electronic Leasing of your Company Car. Flexlease is Dutch electronic leasing firm flexible novel innovative
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FlexLease A Case Study report by: Dan Stephens
Electronic Leasing of your Company Car • Flexlease is • Dutch electronic leasing firm • flexible • novel • innovative • All processes and information concerning the potential car you might be interested in leasing is made available via the World Wide Web (WWW). • Flexlease is the first car leasing company in the Netherlands that offers attractively priced contracts together with a flexible lease contract via the Web. A car leased at Flexlease can be returned after a minimum lease period of three months without incurring any extra costs. What makes it special is that the flexibility does not make it anymore expensive than standard leasing contracts.
Idea And Background • The concept started during a winter vacation. • A senior manger from NetlinQ Group and Personal Leasing Company manager started talking about their own particular business pressures. • Boelen, the senior manager from the leasing firm, noticed that the Web offered the edge that leasing companies were currently unable to offer. • The problem to date with offering flexible and short-term leasing contracts had always been that sales channels were just too expensive in terms of overheads. • It became obvious that this medium defined a sales channel that would eliminate many of the overhead costs in leasing cars, thus enabling a company to offer such flexible short-term service contracts at no extra cost.
Company Structure • The company structure of Flexlease would involve an even share distribution. • This is because the know-how to bring the concept and the definition of the services to life would essentially depend on both the ISP and the leasing company
Before The Venture • The industry belief at the time was that the product of ‘leasing cars’ could not be innovated any further. • This resulted in an industry-wide effect of a steady increase in competition for the lowest price with minimal service improvements • This meant a real loss for leasing customers.
Potential • Flexlease caused a considerable stir of both disbelief and belief that this new idea could work. • The vision of further innovation by applying • flexible lease terms • short-term contracts • increased car availability times • Very innovative and possibly risky to most industry players. • Most large leasing firms were too locked into their own business processes • Couldn’t respond or adapt to Flexlease’s service innovation. • Even some smaller leasing firms were unable to adapt to match or compete with Flexlease’s sales approach. • This proved Flexlease’s potential • By applying and using the Internet as a new sales channel • Possible to offer a new way of selling a product • Existing “brick and mortar’ firms found it very difficult to compete • According to Jeff Visser it is a “product innovation by sales innovation.”
The Process • Flexlease offers a wide range of new and used cars. As part of the Internet services a customer can search the virtual showroom for a car that has the particular specifications required. Once a car is identified that is to the liking of the customer, he/she can request a leasing quote for that particular model. Customers are then provided with further information about the different pricing options through the Web site. Currently, Flexlease offers monthly price arrangements for all its models according to three different annual kilometer ranges.
Problems • Due to the limitations of the current digital infrastructure and applications, Flexlease still uses primarily a fax machine or regular mail to send the final documentation to the customer for signing. • At present this limitation causes a considerable delay in the processing time of orders. The effect is a five-day delivery period.
Problem Fixed! • Now that the E-signatures are legally binding they can use a .pdf or email to replace many of the faxes and mail. They will probably not completely phase out these other communication methods so as not to inalienate those customers who don’t trust email for legally binding activities.
IT Role • The IT backbone at Flexlease is fairly straightforward. • Based on a direct Internet connection via NetlinQ (ISP), Flexlease: • Hosts a web server and a database server to compile customer information and car data. • Flexlease is working toward an online contract signing arrangement, though digital signatures were not legally binding for as of the writing of this study. • They hope that in the near future digital signature will become acceptable, thus enabling it to automate the whole process. • This clearly defines in terms of technology a key short-term objective for innovation – • to fully automate the process • in which contracts are signed digitally • the car will be made available the next day
Workflow Management Systems - Staffware • Flexlease is working on integrating an extensive workflow management system called Staffware. This application will facilitate various integration links between the underlying applications that are involved in the lease order process, like order tracking and cost calculations. • One of the problems that Flexlease has been working around in the past months is the integration of the cost calculation program in the ordering process. Currently, the lack of full integration forced an independent cost calculation to be done and then the results sent back to the customers. • In the intrest of automation, a program is in development to receive information directly from the Staffware workflow management system. • This will allow customers to calculate their leases online. • At this point, the information the customer has entered will be further used to complete his order if he/she should decide to go ahead with the quoted leasing offer.
Why Staffware? • The resulting system will automate the order process. • Automation will speed up the whole process and further minimize the overhead costs. • The resulting savings will be pushed back into the services • The Internet is seen as a fast order method. People expect that the complete back-office is automated if they can order over the Internet. (Jeff Visser, Flexlease). • The workflow management system will provide the ability to implement other processes more easily. • In the future, Flexlease expects and plans to expand internationally • Requires adaptation and adoption of numerous order procedures to offer the service internationally. • Staffware will assist in developing a reliable system where all processes are automated and where the only people involved are the customers and dealers. • It will become vital to track every action that is performed at anytime in order to ensure system integrity and security.
Big Problem? • Even after Flexlease has the logical and physical design for a fully integrated system. • Complete automation is still out of reach as the third-party dealers have not automated their buying and online ordering process. • At present the dealers operations could not be integrated into Flexlease’s system. • Third-party integration will present one of the key limitations that needs very careful planning.
Possible Solutions • To overcome this rather large problem FlexLease could: • Start a project to help the third-party companies to remain compatible. • Find a company that is already compatible to order from. • Start their own sister company that would use a compatible system.
