How today’s private fleets are modernizing their contracts with digital transformation
Private fleets today are modernizing their trucks with the latest technology features, but they are also working toward modernizing their back-office operations by digitizing their contracting workflows.
This movement was born out of the pandemic when there was a dire need to reduce the number of hands that touched physical paper contracts. However, organizations now see the value in moving from paper to digital for many reasons that emphasize asset security, compliance, and efficiency.
Contracts are the lifeblood of relationships between fleets, lenders, and other partners and vendors. With the advent of technology solutions facilitating digital transformation, companies are increasingly reducing their reliance on paper contracts. This shift not only improves the speed and efficiency of transactions but also ensures greater security and compliance with stringent regulations for equipment financing.
The transition to digital contracts also addresses concerns related to document storage and access control. As an example, digitization enables better protection of documents during transfers between private fleets and their finance partners.
Recognizing the inefficiencies in paper-based processes, fleets and their finance partners are actively seeking to minimize their reliance on physical paperwork. This shift is particularly seen in many industries that operate private fleets, such as construction. As an example of this, in terms of how companies have contracted partnerships with transportation fleets, about 7.5% of all documents end up getting lost, which is a reason why keeping everything digital today is effective.
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A more accurate, secure digital workflow
Sure, many organizations today still use paper, but leading industry businesses are realizing many additional benefits that a digital back office creates. First and foremost, digitization will significantly improve the accuracy and added costs to manage paper, keeping up with revisions, etc. What’s more, digital contracts not only reduce the risk of using outdated agreements but also facilitate smoother interactions between the lender and the truck dealer or business.
Private fleets and their finance partners have clearly recognized the importance of evolving from paper only to more of a digital contracting environment. The result has been faster processing, streamlined workflows, and more reliable, trusted document handling.
Managers like the ease of logging in, reviewing, and signing their documents, which automatically pushes the document to the next approver.
What’s more, aside from e-signatures and digital contracting, the electronic storage of these contracts is crucial for all parties involved, ensuring secure access and facilitating audits.
Digital contracting will only grow in prominence. Therefore, organizations should recognize this if they want to be considered leaders of tomorrow. According to industry data, the global digital signature market size is projected to grow from $7.4 billion in 2023 to $34.8 billion by 2028, a CAGR of 36% during that time. Leading companies in their respective industries will quickly turn toward digitizing their contracts and signatures.
The next phase of contracting digital transformation will involve leveraging advanced workflow processes such as e-contracting, multi-channel origination, digital certainty, auditing, document governance, security, post-transaction asset management, and analysis tasks. Each of these areas may seem mundane to the average person, but they each remain critical for the industry to evolve to the next chapter of digitalization.
Centralized data management will allow private fleets and their finance partners to access and analyze metadata across various origination channels and asset classes.
What’s more, it will help to control and track access, manage status changes, and transfer control of digital documents while utilizing sophisticated granular controls and permissions to allow for departmental separation and visibility. All of this will result in improved speed and process efficiency for the entire industry.
Despite the benefits of digital transformation, some organizations have been slow to adopt these changes. Challenges, such as legacy internal processes, user resistance, and concerns about software costs have hindered progress for some. However, delaying this adoption of digital solutions will result in a competitive disadvantage.
With these enhancements, the equipment finance and private fleet industries can advance in digital transformation. From origination transactions to back-office operations, digital transformation can revolutionize how original equipment manufacturers, dealers, equipment financiers, and fleets themselves operate and collaborate.
