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Streamlining automotive businesses could bring ‘significant’ benefits for fleets

Automotive industry must stop operating in silos to avoid wasting millions in duplicated investment and to ensure a joined-up service for fleets and drivers.

Mike Walters, managing consultant at Elevenci

That’s according to recently founded consultancy firm Elevenci, which says that OEMs, leasing and finance companies need to address the increasing convergence of retail and fleet and the rise of subscription services; a move that would bring significant benefits in streamlining work with end-user fleets.

According to Elevenci managing consultant Mike Walters, some companies in the industry face being left behind by new entrants if business models are not fundamentally rebuilt.

Walters said: “Too many automotive businesses are struggling along with the same old legacy models, yet there’s very little open discussion about the subject. This duplication can’t continue in a world that is forcing manufacturers to consolidate in order to gain economies of scale efficiencies.”

He gave the example of fragmented mobility as a service (MaaS) strategies across OEMs and their captive finance and fleet organisations. With different platforms, teams and goals, this can lead to sub-optimal investment and outcomes.

Analysis by Elevenci – which has been established by managing director John Waring as well as Mike Walters, Gary Elliott as client development director and consultant Andrew Shawm, backed by a panel of well-known industry experts – shows that automotive organisations can save up to 40% on costs by converging investment on modern, hybrid IT platforms that can flexibly support the rapidly evolving subscription and mobility ecosystem.

The benefits would mean huge opportunities for efficiencies and performance improvement, but dealer groups, customers and fleet managers should also see a much more harmonised experience by having far fewer touch points and a less complex IT landscape.

Walters said: “Historically automotive finance companies and leasing/fleet companies have worked to different models (e.g. B2B2C and B2B).

“However, the rise of personal leasing, mobility, subscription services, challenges to point of sale (POS) finance and the demise of the traditional company car, all add up to significant convergence and blurring of the lines between fleet and retail, consumers and employees.

“Does it make sense, therefore, to maintain them as separate organisations often operating on different IT platforms?”

Walters added: “Fleet operators typically have multiple contacts points with several different people and teams, while using various tools from different parts of what is ultimately the same organisation. This is an overly complex and disjointed experience which can be drastically improved. Streamlining and harmonising across these different parts of the business will reduce the touchpoints for the fleet operator, making his/her life much more simple when dealing with an automotive brand. The benefits found once this complexity is removed are significant, and will help to deliver an enhanced yet simplified experience.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

One Comment

  • Jo06. Mar, 2020

    Whilst the comments are valid, not sure this consultancy team understands the complexity, cost and resource requirements for large leasing companies to change back office systems.