It is a fact that the customer's mindset has shifted from ownership to usership. To adapt to this change, integrators, manufacturers and distributors have to rethink their business model to change it from a once off transaction model to a subscription one. In this regard, they have entered the As-A-Service journey.
Within the manufacturer’s organisation, the Back Office (BO) department supports day to day As-A-Service operations. It provides administrative support to many different actors, whether internal or external, who all participate in this journey from a decisional or operational perspective.
From customer requests to asset refurbishment, coordinating legal documents, handling asset management, funding, billing and collecting; the BO department handles many tasks at every step of the way but do they have the proper resources to do them efficiently?
Avoiding useless repetitive tasks, limiting manual errors, and reducing the number of back and forths to the end Customer are part of the critical points to highlight and address while reviewing BO activities.
Redefining main processes and workflows to set the grounds of an organised BO structure appears key to manufacturers who plan to move into As-A-Service. Below we propose a quick review of BO implications during the As-A-Service administrative process, and show how a proper software solution will help improve BO efficiency.
Design Back Office Workflows
From origination to asset recycling at end of lease, BO intervenes at each step and interacts with many different actors.
Before deal closing: Gather and share customer and deal opportunity information
As soon as a customer shows an interest in an As-A-Service offer, it is up to the Sales Team to actually turn it into a real signed contract. As the first (and main) BO interlocutor, the sales team will submit as much information as possible regarding both the Customer and the deal opportunity to the BO.
From this start, any information provided may be used for a multitude of purposes. BO will ensure that data entry and compliance files answer all needs (internal and funder for example).
- Customer Information can refer to company registration, organisational charts, and audited financials.
- Deal opportunity information should detail the economics of the deal including but not limited to: rent charges, start date, duration, type of contract, equipment and services description and value.
Because in an As-A-Service scalable solution, the manufacturer will assign its contract to one or more financial partners, it is necessary to work ahead of time with Funders and properly define the required information. This will avoid back and forth to the customer to request extra documents. This information should sustain both the customer evaluation (Know Your Customer (KYC) ) and credit approval studies performed by Funders.
Deal closing: structure legal frame of the offer
The internal review of deal opportunities together with the credit approval provided by Funders will trigger decisions regarding the Customer request. Depending on the deal size, type of equipment and any other predefined criteria, different hierarchical levels could be involved to decide if the customer request will indeed be turned into a contractor not.
Entering the redaction of Contractual set of documents, the BO will act as the guarantor of documents integrity and make sure that any derogations and/or amendments, are clearly stated and shared with both customers and funders. After potential legal revision, the contract will ultimately be signed and carefully saved.
Post deal closing: ongoing asset and contract management
As the contract is signed, the As-A-Service fee invoicing may not start before the equipment is actually delivered and installed. The asset management is a large part of BO responsibility. BO will ensure that all orders are placed to suppliers and that customers indeed acknowledge equipment delivery.
This will trigger the subscription fee invoicing which is another task that can be handled by BO together with collection.
The contract signature also allows BO to actually fund the contract to the financial partner, which implies to provide several required specific documents. This assignment also defines the rules of Billing and Collecting applicable to this specific contract. The preferred choice of the manufacturer should be to keep the direct relation with its customer by billing them. This implies for BO to enter strict rules with the funder defined in the Mandate to Pay process.
Keeping the narrow link with customers (via the sales Rep) along the whole contract duration will help manage any requested change (such as asset disposal or additions) and eventually, handle the end of term whether it is via extension, refresh or sale of equipment.
Because “end of use” does not mean “end of life”, tracking the asset from the beginning to the “end” makes sense at this very stage. It is also up to BO to finalise the value added step of the circular economy by getting the asset back whether it is to Reuse, Recycle or Refurbish it. This reversed logistic management may require the expertise of a selected partner that also leads to an ecosystem to manage as part of BO responsibility.
Select your back office tools
In today’s era of speed, information provided to decisional people must not only be accurate but also accessible on a real time basis. Juggling a high number of contracts, customers and assets turns manual data entry into a potential source of errors.
Pressure on BO may also increase once end of term approaches; the high value of equipment or refreshed contracts are at stake and missing some key milestones might be costly.
A proper digital system can assist the BO to be more efficient in their numerous tasks. The system should have the ability to follow the entire process. As some in-house systems might already exist and be functional, only a couple of modules might be necessary to complete BO assistance. In this case, the integration of existing data points would be secured thanks to solid API’s.
The system should allow various activities (such as contract edition, asset ordering, sale of payment stream, invoicing, reporting) at every step of the way. A detailed analysis of repetitive tasks that could lead to notifications could come in handy. Attention should be paid to where the operations are performed. Not only is geographykey when designing a proper BO system to ensure proper support and training, but also to address constraints such as local legislation (taxes for example).
Implementation of a new software system can be a challenge but it becomes a must have in the transition towards As-A-Service.
At the very beginning of the manufacturer's As-A-Service journey, BO has to set the solid basis of the organisation. BO should review the processes so that this As-A-Service transition becomes scalable while still guaranteeing a seamless sales and customers journey.
Although the path may seem difficult to navigate because of the numerous aspects BO is involved with, focusing on enhancing operational excellence and facilitating the Customer experience should guide the successful redesigning of BO processes.
By choosing a software system aligned with business and ecosystem needs, BO will only become more efficient in each and every area of activity.
Should you not have the in-depth internal resources to set up the Back Office organisation sustaining your growth, look for Experts for guidance on the subject.
At Black Winch, our team of Experts hold over 25 years of experience in the leasing sector. Reach out to email@example.com for an inspiration session on how we can help you develop your most effective and efficient BO department.