FlexLeaseFlexLease

A Case Study report by:A Case Study report by:

Dan StephensDan Stephens

Electronic Leasing of Electronic Leasing of your Company Caryour Company Car

Flexlease is Flexlease is Dutch electronic leasing firm Dutch electronic leasing firm flexible flexible novel novel innovative innovative

All processes and information concerning the potential car you All processes and information concerning the potential car you might be interested in leasing is made available via the World might be interested in leasing is made available via the World Wide Web (WWW). Wide Web (WWW).

Flexlease is the first car leasing company in the Netherlands that Flexlease is the first car leasing company in the Netherlands that offers attractively priced contracts together with a flexible lease offers attractively priced contracts together with a flexible lease contract via the Web. A car leased at Flexlease can be returned contract via the Web. A car leased at Flexlease can be returned after a minimum lease period of three months without incurring after a minimum lease period of three months without incurring any extra costs. What makes it special is that the flexibility does any extra costs. What makes it special is that the flexibility does not make it anymore expensive than standard leasing contracts. not make it anymore expensive than standard leasing contracts.

Idea And Background Idea And Background

The concept started during a winter vacation. The concept started during a winter vacation. A senior manger from NetlinQ Group and Personal Leasing A senior manger from NetlinQ Group and Personal Leasing

Company manager started talking about their own particular Company manager started talking about their own particular business pressures. business pressures.

Boelen, the senior manager from the leasing firm, noticed that the Boelen, the senior manager from the leasing firm, noticed that the Web offered the edge that leasing companies were currently unable Web offered the edge that leasing companies were currently unable to offer. to offer.

The problem to date with offering flexible and short-term leasing The problem to date with offering flexible and short-term leasing contracts had always been that sales channels were just too contracts had always been that sales channels were just too expensive in terms of overheads. expensive in terms of overheads.

It became obvious that this medium defined a sales channel that It became obvious that this medium defined a sales channel that would eliminate many of the overhead costs in leasing cars, thus would eliminate many of the overhead costs in leasing cars, thus enabling a company to offer such flexible short-term service enabling a company to offer such flexible short-term service contracts at no extra cost. contracts at no extra cost.

Company StructureCompany Structure

The company structure The company structure of Flexlease would of Flexlease would involve an even share involve an even share distribution.distribution.

This is because the This is because the know-how to bring the know-how to bring the concept and the concept and the definition of the services definition of the services to life would essentially to life would essentially depend on both the ISP depend on both the ISP and the leasing company and the leasing company

Before The VentureBefore The Venture

The industry belief at the time was that the The industry belief at the time was that the product of ‘leasing cars’ could not be innovated product of ‘leasing cars’ could not be innovated any further. any further.

This resulted in an industry-wide effect of a This resulted in an industry-wide effect of a steady increase in competition for the lowest steady increase in competition for the lowest price with minimal service improvements price with minimal service improvements

This meant a real loss for leasing customers. This meant a real loss for leasing customers.

PotentialPotential Flexlease caused a considerable stir of both disbelief and belief that this Flexlease caused a considerable stir of both disbelief and belief that this

new idea could work. new idea could work. The vision of further innovation by applying The vision of further innovation by applying

flexible lease terms flexible lease terms short-term contracts short-term contracts increased car availability times increased car availability times

Very innovative and possibly risky to most industry players. Very innovative and possibly risky to most industry players. Most large leasing firms were too locked into their own business Most large leasing firms were too locked into their own business

processesprocesses Couldn’t respond or adapt to Flexlease’s service innovation. Couldn’t respond or adapt to Flexlease’s service innovation. Even some smaller leasing firms were unable to adapt to match or compete Even some smaller leasing firms were unable to adapt to match or compete

with Flexlease’s sales approach. with Flexlease’s sales approach. This proved Flexlease’s potentialThis proved Flexlease’s potential

By applying and using the Internet as a new sales channelBy applying and using the Internet as a new sales channel Possible to offer a new way of selling a product Possible to offer a new way of selling a product Existing “brick and mortar’ firms found it very difficult to compete Existing “brick and mortar’ firms found it very difficult to compete

According to Jeff Visser it is a “product innovation by sales innovation.”According to Jeff Visser it is a “product innovation by sales innovation.”

The ProcessThe Process

Flexlease offers a wide range of Flexlease offers a wide range of new and used cars. As part of the new and used cars. As part of the Internet services a customer can Internet services a customer can search the virtual showroom for a search the virtual showroom for a car that has the particular car that has the particular specifications required. Once a specifications required. Once a car is identified that is to the car is identified that is to the liking of the customer, he/she can liking of the customer, he/she can request a leasing quote for that request a leasing quote for that particular model. Customers are particular model. Customers are then provided with further then provided with further information about the different information about the different pricing options through the Web pricing options through the Web site. Currently, Flexlease offers site. Currently, Flexlease offers monthly price arrangements for monthly price arrangements for all its models according to three all its models according to three different annual kilometer ranges. different annual kilometer ranges.

ProblemsProblems

Due to the limitations of the current digital Due to the limitations of the current digital infrastructure and applications, Flexlease infrastructure and applications, Flexlease still uses primarily a fax machine or regular still uses primarily a fax machine or regular mail to send the final documentation to the mail to send the final documentation to the customer for signing. customer for signing.

At present this limitation causes a At present this limitation causes a considerable delay in the processing time of considerable delay in the processing time of orders. The effect is a five-day delivery orders. The effect is a five-day delivery period.period.

Problem Fixed!Problem Fixed!

Now that the E-signatures are legally Now that the E-signatures are legally binding they can use a .pdf or email to binding they can use a .pdf or email to replace many of the faxes and mail. replace many of the faxes and mail. They will probably not completely phase They will probably not completely phase out these other communication methods out these other communication methods so as not to inalienate those customers so as not to inalienate those customers who don’t trust email for legally binding who don’t trust email for legally binding activities.activities.

IT RoleIT Role

The IT backbone at Flexlease is fairly straightforward. The IT backbone at Flexlease is fairly straightforward. Based on a direct Internet connection via NetlinQ (ISP), Flexlease:Based on a direct Internet connection via NetlinQ (ISP), Flexlease:

Hosts a web server and a database server to compile customer Hosts a web server and a database server to compile customer information and car data. information and car data.

Flexlease is working toward an online contract signing Flexlease is working toward an online contract signing arrangement, though digital signatures were not legally binding for arrangement, though digital signatures were not legally binding for as of the writing of this study. as of the writing of this study.

They hope that in the near future digital signature will become They hope that in the near future digital signature will become acceptable, thus enabling it to automate the whole process. acceptable, thus enabling it to automate the whole process.

This clearly defines in terms of technology a key short-term This clearly defines in terms of technology a key short-term objective for innovation – objective for innovation – to fully automate the processto fully automate the process

in which contracts are signed digitally in which contracts are signed digitally the car will be made available the next daythe car will be made available the next day

Workflow Management Workflow Management Systems - StaffwareSystems - Staffware

Flexlease is working on integrating an extensive workflow management Flexlease is working on integrating an extensive workflow management system called Staffware. This application will facilitate various integration system called Staffware. This application will facilitate various integration links between the underlying applications that are involved in the lease links between the underlying applications that are involved in the lease order process, like order tracking and cost calculations. order process, like order tracking and cost calculations.

One of the problems that Flexlease has been working around in the past 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 months is the integration of the cost calculation program in the ordering process. Currently, the lack of full integration forced an independent cost process. Currently, the lack of full integration forced an independent cost calculation to be done and then the results sent back to the customers. 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 In the intrest of automation, a program is in development to receive information directly from the Staffware workflow management system.information directly from the Staffware workflow management system.

This will allow customers to calculate their leases online. This will allow customers to calculate their leases online. At this point, the information the customer has entered will be further used 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 to complete his order if he/she should decide to go ahead with the quoted leasing offer. leasing offer.

Staffware symbolsStaffware symbols

Flexlease’s Order process Flexlease’s Order process with Staffware with Staffware

Why Staffware?Why Staffware?

The resulting system will automate the order process. The resulting system will automate the order process. Automation will speed up the whole process and further minimize the Automation will speed up the whole process and further minimize the

overhead costs. overhead costs. The resulting savings will be pushed back into the servicesThe resulting savings will be pushed back into the services

The Internet is seen as a fast order method. People expect that the The Internet is seen as a fast order method. People expect that the complete back-office is automated if they can order over the complete back-office is automated if they can order over the Internet. (Jeff Visser, Flexlease).Internet. (Jeff Visser, Flexlease).

The workflow management system will provide the ability to implement The workflow management system will provide the ability to implement other processes more easily. other processes more easily.

In the future, Flexlease expects and plans to expand internationally In the future, Flexlease expects and plans to expand internationally Requires adaptation and adoption of numerous order procedures to offer the Requires adaptation and adoption of numerous order procedures to offer the

service internationally. service internationally. Staffware will assist in developing a reliable system where all Staffware will assist in developing a reliable system where all

processes are automated and where the only people involved are the processes are automated and where the only people involved are the customers and dealers.customers and dealers.

It will become vital to track every action that is performed at anytime in It will become vital to track every action that is performed at anytime in order to ensure system integrity and security. order to ensure system integrity and security.

Big Problem?Big Problem?

Even after Flexlease has the logical and Even after Flexlease has the logical and physical design for a fully integrated system.physical design for a fully integrated system. Complete automation is still out of reach as the Complete automation is still out of reach as the

third-party dealers have not automated their buying third-party dealers have not automated their buying and online ordering process. and online ordering process.

At present the dealers operations could not be At present the dealers operations could not be integrated into Flexlease’s system. integrated into Flexlease’s system.

Third-party integration will present one of the Third-party integration will present one of the key limitations that needs very careful key limitations that needs very careful planning.planning.

Possible SolutionsPossible Solutions

To overcome this rather large problem To overcome this rather large problem FlexLease could:FlexLease could: Start a project to help the third-party Start a project to help the third-party

companies to remain compatible.companies to remain compatible. Find a company that is already compatible to Find a company that is already compatible to

order from.order from. Start their own sister company that would Start their own sister company that would

use a compatible system.use a compatible system.

QuestionsQuestions