Wim Bauwens, sales and marketing executive at Sofico talks to Sotiris Kanaris about a new market trend and its effect on software development
Global fleet and leasing software provider Sofico has found that the boundaries between pure fleet and pure retail sales in the European automotive leasing market are blurring.
"In a number of big European markets fleet leasing companies are starting to offer some private leasing products to individuals, not companies. Captives are increasingly looking at business fleets and target the B2B market," says Wim Bauwens, sales and marketing executive at Sofico.
The company says this trend is particularly evident in the Netherlands and Belgium, but it is happening in the UK as well.
The convergence of the fleet and retail markets is changing the lessors’ and captive finance companies’ software requirements.
Currently operating in both markets, they put their contracts on two separate systems. Bauwens believes they will start looking for "unified" software.
Sofico is currently in the middle of implementation projects for customers who are adding retail contracts and fleet contracts on one Miles implementation.
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Miles is Sofico’s end-to-end system which manages both the financing and the services included in a full-service lease.
"We have been doing development work to expand the scope of Miles to allow it to also manage retail contracts," says Bauwens. "Typically a company with a retail focus like a captive finance company has a different system for that. We think there’s a lot of efficiency to be gained for companies by being able to put their entire portfolio of contracts onto one system. We have made steps towards that."
Bauwens says not many software companies will be able to offer a unified system. He talks about the need for software market players to predict where the market is going and adapt their systems accordingly.
However, he specifies that there are instances when software companies have to wait and see how their customers react to a market change before moving on to develop a product.
"If you look at mobility, I think it’s not quite clear what the role of the lessors and the captives is going to be in that market," Bauwens says. "There are separate mobility providers entering the market. They could take over that space. We’ll see what
Through the Miles system Sofico collects a range of data about the customers, drivers, cars and contracts. Bauwens says this information can be used to conduct predictive analysis.
However, he says the majority of companies don’t take full advantage of the data available to them, because of budgetary limitations.
"I think a big portion of the budget related to data analysis is being eaten up by regulatory reporting. The priority for companies is to be compliant, so a lot of the effort in producing reports shifted to this area. It’s nice to see what else you can do with the data; but do you still have time and money and people to do that? This is usually a problem," says Bauwens.
Another reason cited by Bauwens for the underuse of data by companies is the lack of knowledge in-house as to how to use it.
He says the data available today will be nothing compared to the volume that will probably be available in four or five years when the next generation of cars comes to market.
"These are going to be connected cars which are going to be producing so much data that I think at the moment nobody is really clear on what can be done with it and how much potential it has."
New assets and markets
With its existing focus, Sofico managed to more than double its revenue in five years, from 12m (£9.5m) in 2010 to 27.1m in 2015.
Sofico plans to expand into different assets such as trucks and forklifts in the future. In addition, the company wants to move from being solely focused on long-term rental to offer Miles to companies operating in the short-term rental market.
"At the moment we do some short-term rental within Miles, but this is more related to the leasing company booking an external car from a short-term rental company to hand to their customer for a short period," says Bauwens.
In order to develop Miles in that direction, two years ago Sofico took over a French company specialised in short-term rental and truck leasing software.
Sofico has offices in Ghent, Sydney, Tokyo and Avignon, within which there are developers, project managers and consultants.
The firm currently has three customers in the UK, including FCA Fleet Services UK, and Bauwens says they are in contact with a number of prospects.
However, Bauwens highlights that the UK market is very competitive, as a number of its international competitors are UK-based.
He adds that the UK fleet industry is very active, which presents opportunities as well as challenges for foreign companies.
Bauwens concludes: "The industry is strongly networked; there are numerous events happening; there is an industry press; so everybody knows each other. This makes it easier to network, but at the same time more difficult for non-UK companies to establish themselves."