Thanks to digitisation, we are living through one of the most technologically revolutionary periods in human history. The Internet of Things, Big Data, smart phones and cloud-based computing are transforming the way we live and work.
Forward-thinking rental companies are already taking advantage of the huge opportunities offered by these new technologies. These include opportunities to make our operations more efficient, improve customer service, and even to create completely new solutions to our clients.
Below, you can find case studies from some of the companies that are cutting edge in terms of digitising their business models. They also examine some of the challenges that rental companies have faced when implementing and rolling out digital solutions.
These examples of best practice aim to demonstrate how embracing the digital age can provide us with strong foundations for the future success of the equipment rental industry.
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AVESCO RENT MAKES EFFECTIVE USE OF DATA
Avesco Rent was one of the first rental companies to digitise its customer-facing processes. In 2014 it launched FastRent, an online platform enabling users to carry out digital, paper-free interactions. Today, FastRent enables customers to hire machines, book transport, pay online and receive digital invoices. It also automates processes such as ensuring machines are in stock, and even negotiating the final price with the customer. Algorithms provide dynamic pricing, with prices set according to factors such as machine availability and day of the week.
Vincent Albasini, CEO, joined Avesco Rent with a remit to build on this success. Further digitalisation of the business has resulted in 20% revenue maximisation and 30% cost optimisation – a huge improvement to the bottom line.
“You need your processes to be automated so that they are more focused on hire revenue and EBIT,” he said. “Without the right technology, you are always chasing data and looking back at what has happened, rather than using data to effectively plan for today and for the future.
We can customise dashboards that reflect the KPIs that a CEO or a director need to see. And the information is in real time, not just historic. This is an extremely useful tool – and when you add in AI (artificial intelligence) capabilities you go from just having knowledge to having wisdom.
The other important thing to remember is to only collect the data that you need. Hosting data is costly and the more data you hold, the bigger the cost and the risk.”
The first step was to look at how digitalisation could improve the business, rather than investing in technology for its own sake. “The challenge is that, until recently, we had a linear approach to rental – almost like a factory production line approach. What this means is that you have a lot of silos and separate teams that don’t work together. If you simply add technology on top of that, you are only adding frustration and you end up with an admin overload. Admin does not add any value, in fact it can have a negative impact if it takes up too much time for managers and directors.”
The solution for Avesco Rent was to radically change its workplace culture. “You have to embrace this paradigm shift to working in an ecosystem. ‘Ecosystem’ is quite a trendy word, and some people use it without understanding what it actually means. For us, it is to accept that all parts of your business are stakeholders, including your suppliers and your employees as well as your customers.”
RAMIRENT GOES PAPER FREE WITH A NEW APP
Ramirent is rolling out the digitalisation of its processes, following a successful trial in Norway. The company uses the PHALANX suite of apps from UK specialist Spartan Solutions, which integrate with Ramirent’s existing rental software platform from Wynne Systems. These apps digitalise processes including delivery, transport, returns, inspection and servicing the equipment.
Annikken Bergem Nygaard, Supply Chain Planner & Developer for Ramirent, said: “We recognised that we needed more documentation of our processes because we didn’t have all the information available in a structured way. We started from a fleet management perspective, to ensure we had proper documentation on the state of our machines and equipment.”
“There was a lot of issues with the existing systems. For example, an engineer could take a photo using his mobile device but might misplace the images or forget to include the equipment number. Even handwriting can sometimes be open to interpretation! And of course, papers can be lost. It is also not a good use of a mechanic’s time to manually input data from a paper document into a computer.”
Ramirent ran a pilot in one depot and established clear KPIs (key performance indicators) to measure its success. “There was constant dialogue between Spartan, our management team and the end users.” The results were impressive – using PHALANX halved the time it took to turn around equipment from being returned to being rental ready again. It also reduced time spent inspecting equipment by approximately 30 per cent and delivered an increase of 40 per cent in additional, billable services. The amount of equipment damage attributed to customer use rose by more than 20 per cent, while the number of credit notes issued decreased by 34 per cent. “The results were really surprising,” said Annikken.
The success of the pilot and roll-out has been down to end user engagement. “One thing that was crucial for the project was to include the end user from the very beginning,” said Annikken. “In this way, you create commitment to the project because the end users have helped to build it, they are proud that it belongs to them. Creating that level of commitment makes it much easier to implement change.
“Some people understand the efficiency benefits right away. For other people, technology is still scary – perhaps they don’t even use apps on their phone. So we are providing training and refresher courses. Ultimately everyone understood that the old way of working was not as effective as it could be, so that also made change management much easier. Everyone wanted our processes to improve.”
DIGITISATION ENABLES RAPID GROWTH FOR RENTA
“Our strategy from the very beginning was to emulate the productivity benefits of digitalisation that were already in areas such a finance and logistics,” said Joel Särkkä, Chief Information Officer for Renta. “The capabilities and cost savings that our solution landscape brings are significant.”
This meant Renta created its own apps, rather than using apps from third parties. “It is crucial for our business to own the IP. This enables us to be best in market and gives us a competitive advantage.”
Renta Connect brings together all the applications that the company builds either for internal use or as customer-facing technology. Kari-Tapio Saarela, Chief Operating Officer, said: “We have our own applications for each business unit. We combine the data and use AI (artificial intelligence) to analyse it.”
Along with data from ERP and finance systems, information also comes from Trackunit telematics devices fitted to the fleet. “There is a lot of variation in machine demand from season to season,” said Joel. “Data enables us to prioritise the turnaround of machines in high demand. We can increase utilisation while the customer also benefits because the machine they need is in the depot and ‘rental ready’. You can achieve higher utilisation rates from a smaller fleet and therefore a higher return on investment and a lower carbon footprint.”
Implementation of the digital strategy was easy internally; but has required changing the mindset of some customers who preferred more traditional ways of doing business. The solution is to make the customer-facing apps as user-friendly as possible.
Kari-Tapio said: “There are some older guys using the Renta Easy app now who tell me that it is the best system they have used in years. Once they use it, their eyes light up as they can see the benefits right away. It is great that the older users are fired up about it, but don’t forget that for the younger generation, digitalisation is a given – they expect it.”
Renta Easy is its main app for customers. “Renta Easy is a fleet management tool rather than an e-commerce platform,” said Joel. “It is many elements brought together in one app.”
ZEPPELIN RENTAL LEADS THE WAY WITH ONLINE RENTAL
Zeppelin Rental has undergone a digital revolution. In 2016, it digitised its entire business model, including launching its online rental offering to customers. This pioneering work saw Zeppelin Rental win the Digital Innovation award at the European Rental Awards 2017.
With the launch of online rental in September 2016, Zeppelin Rental became the first rental company in Europe to provide its customers with a comprehensive online rental process. This includes real-time availability of its rental fleet at more than 120 rental locations, along with specific terms and conditions and transport costs for each line item.
Online rental exceeded all expectations. In just four months, over 1,200 people registered to use the service – and more than half were new customers.
“In order to build an e-commerce ecosystem we talked to every department of our company to find out their requirements,” said Sebastian Wiese, Head of e-Commerce and Digital Business.
“For example, we involved over 100 members of the sales team in Webex sessions to explain the benefits of online rental. They were very enthusiastic and buy-in was immediate. We fully integrated e-commerce with our IT infrastructure. This makes it a much better customer experience. It is the same as walking into a branch in terms of pricing and availability.”
Zeppelin Rental built on this success with an app for iPhone and Android in November 2016, which was downloaded over 1,000 times in less than six months. In late 2017 it launched v2.0, which enables users to customise the app according to their specific business needs.
Zeppelin Rental also involved its customers and employees in every step of the process, using their feedback to perfect its e-commerce platform.
“Customers benefit from easier and quicker processing that enhances their efficiency as well as increasing their flexibility,” said Dominik Baumann, Head of Marketing.
“They have the possibility of ordering 24/7, regardless of opening hours, and are provided with greater transparency in terms of both availability and pricing. Of course there are challenges along the way but this level of innovation makes it really exciting to work for Zeppelin Rental. We are ahead of our competitors in terms of e-commerce and we intend to stay there.”
In order to ease business for customers, Zeppelin Rental launched further high-quality online services like its modular space configurator that allows the easy planning and three-dimensional visualisation of container complexes of up to 32 single units. Depending on the customer’s needs, they individually decide on the container types and the interior, the number of floors and the size of rooms. They select different options like including toilets and kitchenettes, can save the project and request a quotation by Zeppelin Rental for their individual complex with just one click.
DIGITISED SPARE PARTS MANAGEMENT BENEFITS BOELS
Guy Cremer, Director of Fleet Operations, highlights how moving to a digital parts management platform has enabled Boels Rental to further improve customer service.
When Guy Cremer joined Boels in 1989, the Dutch company was already committed to digitisation – it had designed and built its own IT system the year before. Since then, Boels has grown from three rental stores to almost 400, expanding across the Netherlands and into 10 other countries.
“In 2005, I saw SmartEquip at the American Rental Association show,” he said. “One of the major US rental companies took us to visit a branch that was using the technology. A mechanic there looked me in the eye and told me that if they were to get rid of the system, he ‘would quit’. For me, that was the real drive behind investigating it further.”
“We had almost 120 depots by then and our mechanics were vital to our quality service. At that time, it was very hard to find and keep good mechanics, so we felt that a parts system could not only improve our efficiency, but it could also help us to retain our best mechanics.”
In 2012, the company tested SmartEquip at 20 locations, all based in the same country. “Within 6 months we trained everybody within the Group, and after 8 months we ordered 95% of our parts via the platform, companywide. It was really well-accepted in a very short space of time.
“We have a very centralised structure; we use one system for all countries and all depots. Integration is much more difficult if the rental company is using multiple systems. That was one of our biggest advantages when it came to digitisation.”
The main benefits of using SmartEquip were an approximately 80% reduction in the time spent trying to identify, find and order parts; and another 80% reduction in the number of line items stocked in Boels’ central warehouse.
“In the past, if the parts team ordered the wrong part, or it was delayed, eventually the technician would go and buy it himself. This meant that we didn’t have quality control over the part that mechanics buy – and we would end up with many duplicates.”
Other advantages include improved machine uptime. Mechanics now have all the service, parts and technical information at their fingertips, on an iPad, in their native language.
“Boels Rental operates in 11 countries, so we need a parts management system that supports all the relevant languages. If you are a Polish mechanic, it automatically provides you with the information in Polish.”
“The mechanics don’t like computers. They prefer to have dirty hands – ‘wrench time’ is what they like because it is what they are trained to do. They do not want to spend ages looking up spare parts. SmartEquip makes it more fun for a mechanic because it reduces the hours spent looking up parts by 80%.”
TELEMATICS CREATES NEW BUSINESS MODELS FOR RIWAL
Olaf Sterkenburg, Group Commercial Director, of Riwal, outlines how the powered access rental specialist Riwal is using telematics to enhance customer service.
Trackunit has worked with Riwal for over a decade, starting out by suppling GPS tracking devices to Riwal’s operations in Denmark.
“They were the first ones to supply to our Danish operation to locate our machines,” said Olaf. “As tracking developed, they added more features. We grew with them and the features that they added. The technology has advanced to provide a much more robust remote connection. And the amount of data has significantly increased – it is no longer just machine location but also the ability to charge for the hours that customers actually used the machine.
“In most markets where we operate, the rental contract is for a 5-day per week period. But a lot of our customers were using the machines over the weekend. We don’t mind that, but we want them to pay for it. So Trackunit created a nice ROI for us. We could check on a Monday morning who had used the machines over the weekend.”
In 2012, Riwal took a strategic decision that any new, high-value access platforms it purchased would be fitted with tracking units. Typically this would be larger scissor lifts and big booms. By 2015, it decided that every unit – large or small – should include tracking. Riwal has more than 14,000 access platforms in its fleet, and by the end of 2017, it intends to have 10,000 of them fitted with tracking devices. Every machine will include a Trackunit device by December 2018. The main reason for this rapid expansion is the positive response from customers.
“We have integrated Trackunit into our customer portal named Access4U. Now the site manager or contractor can see precisely who is operating the machine – customers see great value in that. Two years ago we had 83 users of Access4U and now more than 500 customers in over 5 countries and growing.”
Advances in telematics also permit the device to communicate with the access platform’s CAN Bus system, which provides remote access to diagnostic fault codes.
“Part of The Riwal Way ethos is to deliver the best customer experience. With telematics, we can be a proactive rental company, because we can see problems before they cause the machine to stop working. In this way, we can promise our customers that we will plan maintenance in a way that doesn’t affect their up-time.”
“We are not interested in being the cheapest company in the business. Instead, we are focused on helping our customers improve their profitability. We take pride in what we do. We try to create something of genuine value to our customers and this has been recognised by our peers.”
Riwal won the Access Rental Company of the Year category at the International Awards for Powered Access (IAPAs) 2017, where judges singled out how Riwal was ‘innovative with new technologies’. It also won Large Rental Company of the Year at the European Rental Awards 2016.
Keen to innovate, Riwal has taken a step further. The company is now using its deep partnership with telematics provider Trackunit to create completely new ways of working.
“In the digital age, I don’t believe that IP or proprietary data is a good business model,” said Olaf. “If you can share data to create something meaningful, it creates value for both the customer and the supplier.
“Increasingly our customers are inquiring about paying for actual usage by the hour – and we are really OK with that. Most rental companies think that this business model will hurt them, but we actually think that it will help us.
“We believe that rental should be about customers paying for what they use, not paying to have a machine available just in case they need it. This is a far more transparent business model and delivers a better customer experience, which is what Riwal is all about.
“This model also means that we can make one machine available on site to multiple contractors at once. This is a much safer and more sustainable way of working, as well as being more cost-effective for our customers.
“All too often, we see our customers over-order; they hire too many machines. For example, by analysing the data we can show the customer that they have hired 5 machines, when they could quite easily manage with just 4. If there are occasions when they need 5, we can plan to supply an extra machine as it is needed.
“This is the direction in which we are pushing Trackunit. We want to create a control room that analyses the data and translates it into meaningful solutions for our customers.
“With the help of Trackunit, we have built a customer portal that transforms the traditional rental process into a fully digital process. Hire, off-hire, safety, invoicing, and GPS location are all digital now.”
Riwal Access4U is an online secured management tool, providing customers with instant access to all their hire information. Additionally, clients can view in real-time which machines are working on which projects and at which location.
Users can rent and off-rent equipment; find specific machine documents, such as downloadable inspection and operating sheets; and have complete access to their invoice history. They can even check which employees need renewed training based on the validity of their certificate – and request new training from Riwal as required.
“We don’t have a traditional customer/supplier relationship with Trackunit; we are in this together. Through this unique partnership, we are breaking new ground in a positive transformation for both companies.
“We cannot simply be a ‘me-too’ company. We want to be the company that does things differently and is a market leader. Part of that is the responsibility of taking the industry to another level. It makes us smile and it makes our shareholders smile, too.”
This approach offers advice on conveying the benefits of digitisation to your customers, suppliers, employees and other stakeholders.
- Embrace digitalisation, don’t just add it on top of existing structures and processes
- Digitisation can differentiate you from your competitors and move you up the value chain
- Digital platforms are vital for doing business with the younger generation
- However, also ensure your apps are user-friendly for the older generation
- Ensure that innovation is driven by what your customers and stakeholders really want
- Artificial intelligence and machine learning can help you continuously improve
This approach looks at the logistics of identifying why digitisation is right for your business, which suppliers and products will work best for you, how you deploy digitisation, and how you maximise the benefits.
- Owning the IP and the data can add to your business valuation
- Ensure that data enables you to plan ahead as well as look at historic performance
- Only collect the data that you need, to reduce risk and keep costs down
- Set targets and measure the success of each digitalisation project
- Start with a small trial and set clear objectives to measure its success
- Be prepared to face challenges along the way!