ABN AMRO Lease doubles business efficiency with SAP Leasing

ABN AMRO Lease is one of the largest equipment leasing specialists in the Netherlands, generating more than €1 billion in annual revenue. Based in Utrecht, the Netherlands, and active in Belgium, Germany and the UK, some 160 staff specializes in arranging innovative lease finance for barges, containers, cranes, lathes, generators, presses and ships – large equipment of almost any type that bears a chassis or serial number in the manufacturing and industrial sectors.

When companies need more financial flexibility , leasing offers a valuable alternative, and can create new opportunities for customers to allocate precious cash more effectively.

Maurice Koot, Chief Operating Officer and Chief Financial Officer, explains, “We focus on helping customers place a value on assets, and then consider whether that value is better realized as a lease. Particularly in the current economic conditions, leasing can address the difficulties of raising capital for purchases of new equipment.” To support its lease management processes, ABN AMRO Lease was operating a total of 13 applications across its key business areas. Links between applications relied on batch processes, and this somewhat disjointed system presented a barrier to business growth.

Because so many processes required detailed knowledge of how the applications worked together, it was not possible to start a new operation in a new location or country.

Additionally, the system did not support multiple languages or currencies, another barrier to widening the range of operations. With data held on many different systems, even apparently simple tasks such as preparing a consolidated mailing database for a promotion could take up to eight weeks.

As sales volumes grew, the system – and the staff – struggled to handle the increased workload. “ABN AMRO Lease is actively looking at new markets, by geography, sector and financial product,” says Maurice Koot.

“Former systems did not offer the flexibility or capacity to scale, and without multi-currency and language support our options were very limited. Rather than try to become software engineers, we looked for an integrated, purpose-designed solution.”

Identifying the best solution

The ABN AMRO Lease team identified high-level objectives, which included targets to reduce the total cost of operation by more than ten percent, increase the number of contracts handled per employee by 20 percent, and cut the financial closing days by 50 percent. The company also set enablement goals, including the ability to introduce new products in shorter timescales, to advance into new territories supported by system language and currency capabilities, and to open up new market sectors.

Working with IBM, the team identified a range of additional project goals. These included the integration of applications to reduce the number of separate interfaces and improved maintainability, and take steps to enhance the application flexibility and adaptability to be able to respond more rapidly to the business requirements.

To make this possible, the combined team committed to introduce best practices for creating leases using industry-standard applications rather than developing in-house solutions. This would lead to standardized and more effective business processes running on a single, efficient IT platform with modern, user-friendly access to information. From a shortlist of six solutions, ABN AMRO Lease chose the SAP Leasing application from the SAP Banking software portfolio, as the first customer in Europe.

Rob Arends, Head of ICT Program Office, comments, “SAP Leasing, CRM® and ERP® offered the kind of integrated solution we wanted, providing superior functionality and covering all our product operations with no customization or modification.”

Maurice Koot adds, “The SAP Leasing driven solution creates a single point of control for customer data, leases and contracts, available for all our staff as an integrated view of activities. SAP provides the integral interface between operations and finance that we previously lacked, and allows us to create a fully connected business process across the company.”

Creating a partnership

Having not used SAP software before, ABN AMRO Lease looked for an implementation partner able to guide it through the business and technical processes. Maurice Koot was impressed by the response from the IBM Global Business Services team, and the expertise on offer from IBM´s SAP Leasing Competence Center.

“We selected IBM Global Business Services® because of its strong links with SAP and for its understanding of the leasing sector,” says Maurice Koot.

“Based on this understanding, the IBM team was able to translate the business requirements into the application configuration and infrastructure sizing, which represented enormous value to ABN AMRO Lease. Additionally, IBM Global Business Services brought project management skills to explain what had to be done, when, and why. This is a difficult challenge when a supplier acts as the project manager, yet the IBM Global Business Services team performed it well.”

The project originally started in 2007, and has included functional extensions and software upgrades. For example, the IBM team assisted ABN AMRO Lease with an upgrade of the SAP Customer Relationship Management solution, which integrates with SAP Leasing to provide seamless customer service, marketing and management functionality.

Maurice Koot comments, “The long and successful relationship demonstrates clear evidence of the added value provided by IBM Global Business Services to ABN AMRO Lease.”

Building effective teamwork

The implementation team was keen to involve staff at an early stage in the migration to SAP Leasing, and ensured that key users – which for ABN AMRO Lease means almost half the company – understood what was being proposed, and how it would affect them.

The ABN AMRO Lease team agreed with IBM that the best strategy was to implement and commission the software with as little customization as possible, which could come later if required. The IBM team guided the company through configuration and selection to ensure that the software offered the workflows most suited to ABN AMRO Lease, a process which mainly involved narrowing down the possible options in the truly comprehensive SAP Leasing product.

IBM Global Business Services provided the essential business blueprinting services, transforming the business requirements into application specifications. Maurice Koot comments, “The business blueprinting element and understanding of our needs and translating these into the practical implementation of the SAP Leasing, CRM and ERP applications was one of the most valuable contributions from IBM Global Business Services.

“The IBM team was very driven to succeed,” comments Maurice Koot. “We agreed at the outset to limit both the software changes and the project team staff changes – on both sides – to provide consistency of delivery. We kept our word, and so did IBM, which greatly improved the implementation path. During the project, the ABN AMRO Lease business was acquired by a new company and then spun out again, and it is a tribute to our business collaboration that this caused little disruption.”

Designing the technological foundation

Key objective was to create an IT infrastructure capable of adapting to changing business demands.

Working with IBM Global Business Services, ABN AMRO Lease chose to implement its new SAP software on IBM BladeCenter® technology.

This infrastructure solution enables ABN AMRO Lease to create new virtual servers for SAP applications within just a few hours, without the delay and expense of specifying, procuring and installing physical systems.

The flexibility of the environment means that allocations of processing capacity, memory and network bandwidth can be adjusted to suit the workload, using shared resources. Rob Arends says, “IBM BladeCenter provides the ideal infrastructure for running a large private cloud. If we find we are running out of total resources, we simply add another blade server – and we have headroom to grow by 36 percent from our current workload.

Supporting business growth

Since implementing SAP Leasing software, ABN AMRO Lease has enjoyed significant growth, exceeding its original objectives. The number of contracts handled per employee has doubled, beating its target by a factor of five.

Financial closing has been cut from seven to three days, exceeding the project objective. Reporting takes 85 percent less effort. ABN AMRO Lease also analyzes business efficiency by taking net income, less interests and costs, and calculating its administrative expenses (of which IT operations are a substantial share) as a percentage.

Since implementation of the SAP and IBM solution, administration costs have been cut by 20 percent. “The project was targeted to provide a return on investment within four years,” says Maurice Koot. “We achieved it in less than three years.” Importantly, the SAP and IBM system supports multiple currencies and languages, and provides a complete business solution that can be rolled out to new territories, as planned. With a single customer record, promotional campaigns that took eight weeks to prepare can now be completed in a few days. ABN AMRO Lease is also now able to replicate both the business model and the products to enable it to open up new market sectors.

For example, in partnership with a medical equipment provider, ABN AMRO Lease sells a complete hospital operating theatre solution, offering a tailored finance package to make it possible for hospitals to take advantage of the very latest in operating theatre design without calling on scarce capital resources.

“Such creative and innovative thinking is essential for ABN AMRO Lease and its customers,” says Maurice Koot. “It continues our strategy of helping customers to place a value on assets, and then considering whether that value is better realized through a lease. In the past, creating, validating and establishing a business process for a new product could take up to a year. Now we are able to innovate, validate and action new offerings more quickly, helping us enter new markets more rapidly and cost effectively than before and also thanks SAP and IBM.”