First published in the December 2003 issue of LEASINGLife

“Pssst – 'Ave I got a deal for you! - The latest XR3i with alloys, spoiler, bucket seats and leasing terms you wouldn’t believe.”

Not many would fall for this type of Arthur Daley deal today. XR3i’s were great in the late 80’s and early 90’s but times have changed. We now reject such old cars not only because of looks, but also because technology has improved dramatically. Software has advanced even further – so why are we still prepared to use and even buy systems that were built when Rick Astley was Top of the Pops?

For some time the holy grail of transaction processing systems has been straight through processing (STP). It’s not difficult from a system perspective with the advances in technology and know how in software design. If you appreciate what needs to be achieved in the total transaction life cycle and look at each event in this context, then it’s easy enough to ensure that a contract, from quotation through to collections, taxation and accounting, can be processed seamlessly. The difficulty is when you use old systems that are bolted together and that only address one event in the transaction life cycle or even larger systems that simply use old technology and processing logic. The XR3i type leasing systems (some still with british racing green screens) do of course offer some processing horse power, but the ride is too often uncomfortable, and steering through the journey always includes unnecessary pit stops. A donkey would be more reliable.

Today we should demand the ability to manage the whole transaction process flow effortlessly, seamlessly and transparently. In doing so, we have the advantage of being able to calculate exposures accurately and immediately. Often our desire for STP is driven by the need for efficiency but it also has the advantage of allowing improved analysis of your portfolio's behaviour at any point in time from different vantage points. This is important in extreme situations, enabling us to accurately and instantly know what exposures there are to an industry, asset type or geographic location etc, but also in every day exposure and risk assessment of individuals or companies. In addition it would be pointless to have a system that has STP but can only cope with taxation changes with the help of a rugby pack of programmers.

When we designed 42™ our research showed that STP was not just about the transaction process but about a total environment that enabled clients to manage the business on a daily basis, whilst coping with changes without recourse to developers. STP that comes to a halt when the Chancellor stands up and makes a new announcement is like having to change the XR3i’s tyres because it’s raining.

Rather than an XR3i, Ford now encourages us to “get out more”. Of course an XKR is really the answer today. It’s about the only time British Racing Green is acceptable.