Jan, Tell us about Sofico.
Sofico is privately held company based in Belgium. We have developed software solutions for car leasing companies for 26 years. Typical customers are ALD, GE and captive finance companies. We develop, maintain and market our software, Miles. We have customers all over the globe – various European countries, Australia and New Zealand as well as Japan and South Africa. We have our first customer in the United States and are looking to further develop the U.S. market.
Your global reach is impressive; tell us more about your software solutions.
The basis for our success is the fact that we focus on one particular niche market, car leasing. We began in 1988 with our first solution, which was called Leasebase. It is now at the end of its life and we have our newer product, Miles. Miles is a sort of ERP system for leasing companies covering the whole lifecycle of a leasing contract, from the configuration of the vehicle at the start of the quotation process, all the way through to the remarketing of the vehicle after contract termination and all of the processes in between. The registration, reporting – even the general ledger – is included in the system.
Miles is fully integrated but is based on open standards and the most recent technologies. I always mention how a lot of companies are still working with systems that are 20-30 years old and were developed before the Internet. Experts sometimes laugh but it makes a huge difference. Miles was developed in 2001-2004, so we are fully integrated. The web front office and mobile apps we offer run on the same database as the back office.
What are your plans for the U.S.?
I came over here a couple of years ago and decided quite quickly that it was not yet the right time for us to enter the U.S. market. Now, I have the impression that things are picking up and I think the timing is right. We have our first U.S. client, but it is never good to have only one client in a very big region so we are now trying to expand our presence. Our first step is to get an understanding of how business in the U.S. is different from Europe. At the end of the day we are in the same business but some details are very different, just like Australia works differently from Europe. I am trying to gain some insight into the market and common practices in order to ‘Americanize’ our system and fine-tune it to the specifics of the U.S. market.
What makes Sofico’s software solutions unique?
I think Sofico’s unique position lies in the fact that many leasing companies today, mainly the very big leasing companies, have very old systems. Actually, they don’t have just one old system; they have a patchwork of legacy systems. These are all connected to each other which make it difficult to maintain, but even more difficult to bring new products and services to the market in a cost effective and timely manner. I believe that, today, software systems for the leasing market have become almost a commodity. With Miles, we can deliver that basic layer, the commodity, to all leasing companies.
On the other hand, the customer experience is becoming more important. That is something which we can jointly develop with our customers or which our customers can do by themselves based on the back office system that we provide. I don’t think there is any added value anymore in leasing companies developing their own system from scratch. It is basic; it is almost the same for everybody. It is all about purchasing a vehicle, funding that vehicle and adding services. Whether you look to Australia, to Japan, to the States or to Europe, it is all about the same business. As I said though, there are subtle differences.
Japanese leasing company Ichinen recently selected Sofico to implement Miles. How did this transaction with Ichinen come about?
One of Sofico’s strategic objectives is to grow, both in volume and geographically. Therefore, we conducted some market research from our Australian office. While the market in Australia is quite small, we have a very big share of that market. So, we looked at growth scenarios based out of Australia, focusing on the Asia Pacific region. We visited a number of countries and at the end of the day, Japan seemed the most mature market and there was a very big need for mature, fully integrated systems.
One of the specifics of the Japanese market is a reliance on old legacy systems. As a result, a lot of things are done manually, so a fully integrated system like Miles can be successful over there. Obviously, there is a big challenge because of the language. You have to speak Japanese. There is no way to conduct business in English, so support from Belgium or Australia is limited. For Sofico, this was a very big investment. Both in terms of money and effort because everything from marketing materials, Miles itself, the training materials, everything had to be translated into Japanese.
We built up very good contacts with a number of prospects as well as the Japanese Fleet Association and, after about one year, to our very first customer in Japan, Ichinen. Ichinen is a fleet of about 100,000 contracts and it is one of the top ten players in the Japanese market.
What sorts of trends are you seeing in the global marketplace?
Actually I don’t see very many global trends but I do see some very specific trends in Europe. A very important one is mobility. Company car providers are moving away from a budget that is centered on a car and instead focusing on a budget that is centered on a person. In this case, an employee has a mobility budget instead of a company car. This budget can be used towards public transport, taxis, renting a car, scooter or a bicycle and so on, depending on the need of each trip. I think that in the U.S., certainly in big cities, mobility could also be a solution to help alleviate congestion problems. However, I understand that the U.S. is a very big country and I don’t think mobility will be relevant for the rest of the country.
Jan Bouckaert is Business Development Manager at Belgium-based Sofico. Jan has over 25 years of experience in the international leasing and fleet management industry. He uses his expertise to help Sofico realize its strategic objectives.