Equipment Leasing is a business process that no one owns. Most Fortune 1000 companies take a fragmented approach to managing the equipment lease lifecycle, and as a result they waste a significant amount of money on this poorly managed process. The challenge is that the equipment leasing life cycle crosses the organizational, geographic and functional boundaries of large global companies.
Recently, CFOs have identified this issue as an opportunity that can and should be addressed in order to realize significant cost savings for the organizations. One approach is to consolidate and manage the equipment leasing process through a global shared services initiative that applies “Center of excellence” best practices management to generate significant and measurable cost savings.
The areas of most concern with the equipment lease life cycle are:
- Uninformed Lease vs. Buy decisions
- Costly and uncompetitive lease sourcing process.
- Expensive Lease Origination with complex documentation.
- A lack of financial control and management of the lease equipment, resulting in significant financial waste.
- Incomplete and inaccurate financial reporting which creates compliance risk issues.
The CFO of one Fortune-200 company decided to do something about this problem and reduced the cost of their equipment leasing program by 18%. The highlights their story is as follows:
- CFO Executive Sponsorship: Provided the transformational leadership needed to tackle the job.
- Create a cross functional taskforce to define the problem and propose solutions.
- Procurement: Equipment Lease Sourcing.
- Treasury: Equipment Lease Portfolio Management.
- Controller: Financial Reporting, Accounting: SOX and Audit Concerns.
- Established a global shared services “Center of Expertise” to manage the Equipment Lease lifecycle
- Engaged Strategic Partner: LeaseAccelerator.
- Partner engaged for lifecycle leasing solution, best practices, expertise and transformation consulting.
- Implemented an Enterprise Equipment Lease Management process and solution.
- Equipment Lease Sourcing: A Marketplace Platform to connect with a Global Lessor Network (GLN) of 500, automate the bidding process and competitively source leases.
- Portfolio Management: Created a system of record to manage over 7,000 lease schedules in 44 countries.
- Financial Reporting: SOX, FASB Compliant Financial Reporting System
- Enterprise Straight Through Processing: Integrated SaaS platform with Ariba Procurement and Oracle G/L, A/P.
To learn more about how this Fortune 200 company addressed its Equipment Lease Management challenges: