Getting started – strategic options
The digitalisation options available to the rental company. This section also covers an analysis of the main digitalisation delivery strategies of in-house development, Commercial Off The Shelf software deployment, partner with a platform provider or hybrid approach
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GETTING STARTED – THE STRATEGIC OPTIONS AVAILABLE TO A RENTAL COMPANY STARTING ON THE DIGITALISATION JOURNEY
All rental companies face the same opportunities, whether a larger rental company or a smaller SME rental company. This section is applicable to all sizes of rental company, but particularly applicable to small and mid sized rental companies who have yet to start their digitalisation journey and have limited resources compared to the larger rental company.
Summarising the benefits of digitalisation to rental companies are as follows:
1. PROCESS EFFICIENCY AND EFFECTIVENESS – AUTOMATE EXISTING PROCESSES, REDUCE COSTS, INCREASE SPEED, ELIMINATE ERRORS, INCREASE REVENUE
2. CUSTOMER SERVICE AND SOLUTION ENHANCEMENT AND DEVELOPMENT
- Stage one – interface of rental ERP with customer ERP to deliver efficiency and effectiveness gains to the customer (as well as the rental company).
- Stage two – use of telematics to deliver enhanced services and solutions to the customer and develop additional services and solutions.
3. MARKETING AND SALES – REACH AND SELL TO NEW CUSTOMERS
4. ASSET MANAGEMENT (VIA TELEMATICS)
5. BUSINESS MODEL TRANSFORMATION – DEPOTS, ASSET POOL, SALES ORGANISATION, BACK OFFICE ORGANISATION)
HOWEVER, RENTAL COMPANIES OFTEN HAVE LIMITED DEVELOPMENT RESOURCES TO DEVELOP THEIR OWN DIGITALISATION SOLUTIONS. TO OVERCOME THIS THERE ARE MANY OFF THE SHELF SOFTWARE AND PLATFORM SOLUTIONS ON THE MARKET. THE ROUTE A RENTAL COMPANY SHOULD CONSIDER DEPENDS ON THEIR STRATEGIC PRIORITIES AND GOALS.
The key options available are as follows, each will be explored in turn on the following slides:
- Do nothing, carry on as before, no digitalisation.
- In-house: develop and implement a digitalisation strategy in-house.
- In-house: utilising commercial off the shelf (COTS) software solutions.
- Partnership with a platform provider.
- Hybrid mix and match solution based on mix of in-house, COTS and platform.
THE THREE MAIN DIGITALISATION PATHWAYS FOR THE RENTAL BUSINESS TYPICALLY INVOLVE
1. PLATFORM PROVIDER
In this pathway the platform provider usually undertakes digital marketing on behalf
of the rental company, they provide a digital solution which replaces or integrates with, or operates alongside the rental company’s own systems, the rental company owns and maintains the asset and provides the customer service associated with the rental – advice, on and off rent, maintenance and support and logistics – although the platform may provide some of these solutions (such as transport) and / automate process elements such as on and off rental, invoicing and data provision to the customer. The more advanced platform providers will also provide data and data analytics in areas such as incident analysis, segmentation by different incident, impact, type of customer, etc., and make recommendations as to how the rental partner can improve their service. They will also support investment decisions by providing supply and demand data for the market segmented by area, equipment, clients, etc., and data on how to use the equipment – utilisation, carbon impact, etc.
of the rental company, they provide a digital solution which replaces or integrates with, or operates alongside the rental company’s own systems, the rental company owns and maintains the asset and provides the customer service associated with the rental – advice, on and off rent, maintenance and support and logistics – although the platform may provide some of these solutions (such as transport) and / automate process elements such as on and off rental, invoicing and data provision to the customer. The more advanced platform providers will also provide data and data analytics in areas such as incident analysis, segmentation by different incident, impact, type of customer, etc., and make recommendations as to how the rental partner can improve their service. They will also support investment decisions by providing supply and demand data for the market segmented by area, equipment, clients, etc., and data on how to use the equipment – utilisation, carbon impact, etc.
2. SOFTWARE SOLUTION PROVIDER
Including platforms provided by the equipment manufacturer. These solutions provide a COTS (commercial off the shelf) software solution which digitalises the rental process and automates the process from allowing the customer to rent digitally to organising logistics, maintenance and repair, enabling the customer to on and off rent an asset and digitally invoicing the customer. In a number of cases (where the asset has telematics installed) they will support data analytics and provision of digitally enabled solutions to the end customer such as equipment utilisation. The solution will either replace, integrate into, or sit alongside the rental companies ERP.
3. IN-HOUSE DEVELOPMENT
In this scenario, the rental company will develop their own digital solutions, or if a SME, more likely they will purchase stand alone solutions such as a maintenance, or logistics solution and integrate them into their ERP to create a solution for their business.
DECISION MAKING FOR RENTAL COMPANIES – THE DIGITALISATION DO NOTHING OPTION
What it involves:
Carrying on as before, no major steps towards digitalisation, usually includes a website catalogue, maybe email campaigns and local social media combined with an email enquiry system on the website, but little or no automation of processes, no telematics and no digitalised service development.
- No investment required
- No change required
- Aging construction workforce will mean traditional customers will leave the industry.
- Younger customers will require digital solutions as they run their lives digitally.
- Medium and larger customers will increasing require digitalised services and solutions.
- SME rental agencies will lose share to platforms as they mature.
Critical success factors:
Need a clear strategy to differentiate the non digitalised rental business from digitalised alternatives – for example local non web travel agent maintaining its business via personal service versus online travel, flight and holiday booking options.
DECISION MAKING FOR RENTAL COMPANIES: THE IN-HOUSE DIGITALISATION OPTION
What it involves:
Building your own solutions in-house. Solutions typically include process automation, social media activity (such as web promotions, linkage to local activity such as building starts) automated multi channel sales front end, automated availability, quoting, integrated with telesales and in person depot sales, telematics, either self installed or middleware to integrate manufacturers’ systems with own systems, digitally enabled services and solutions (such as sustainability or use based pricing).
- Control – your system will fully meet your needs and be to your specification.
- Ownership – you own the lead stream, the market engagement and customer relationship (versus platform option).
- Facilitates – longer term service development and business transformation.
- High cost option.
- Skills and resources required.
- Timescale to implement (years).
- Maintenance and refresh.
- Ability to create a solution better than
off the shelf solutions.
Critical success factors:
Need a clear strategy to differentiate from platforms and competitors
- This can be digitally enabled local, regional or international presence, delivering strong brand awareness, wide reach and high levels of service supported by digitalisation.
- Can be a focus on a particular asset class – e.g. specialist in power rental, toilets, temporary buildings, etc.
- Can be a functionality based proposition based around services and solutions.
Critical to success is a focus on digital to drive customer retention and growth as well as acquisition and servicing.
Need to commit funds and resources to development and implementation.
“Customer driven KPIs showing impact of digitalisation are the main benchmark – like the fact that we are viewed as the safest (cyber wise, Health and Safety, etc.) and most reliable company in the market means digitalisation has succeeded”
DECISION MAKING FOR RENTAL COMPANIES –
THE IN-HOUSE BASED ON COMMERCIAL OFF THE SHELF (COTS) SOLUTIONS
What it involves:
Building your own solution in-house by implementing COTS solutions. Solutions can range from full digitalisation out of the box, to discrete packages – for example a digitalised maintenance solution. Solution elements typically include process automation, covering back office, billing, electronic data interchange with customers, maintenance, asset management, customer relationship management, sales and marketing, telematics and data based service development (see benefits of digitalisation for examples). A typical “get started” approach means implementing discrete packages e.g. maintenance, to fix a problem, or deliver discrete benefits against a stand alone business case, and build up from there. Experience of companies interviewed for the guide was that at some stage along the journey you will have to replace your ERP system once you have digitalised a significant element of your business, otherwise an existing ERP system will constrain further digitalisation.
- Can develop piecemeal, each element based on stand alone cost benefit.
- Can develop faster than in-house.
- Capability lis often higher with bought in systems than in-house.
- Support, maintenance and ongoing development, releases covered by supplier.
- Facilitates longer term service development and business transformation.
- Skills and resources required (lower than do it in-house).
- Constrained to the pre designed COTS solution.
- Ongoing licence and support costs.
- Requirement at some stage through the journey to replace your ERP system.
Critical success factors:
Need a clear strategy to differentiate
from platforms and competitors (as in-house development). Need intelligent customer capability and in-house capability to integrate with existing systems.
from platforms and competitors (as in-house development). Need intelligent customer capability and in-house capability to integrate with existing systems.
DECISION MAKING FOR RENTAL COMPANIES – PARTNER WITH A PLATFORM PROVIDER OPTION
What it involves:
Rental company partners with platform provider. Platform provider typically undertakes the marketing and secures the rental request, then puts the requirement out to the rental companies on their books and the rental company can provide the asset to the customer. The platform bills the customer or can act as an agent for the rental company who bills directly. The platform provider often provides a digitalised system (platform) for the rental company. The platform usually undertakes marketing, sales, billing, often transport, but doesn’t usually provide maintenance or fleet management. The platform provider takes a cut of the rental charge or bills the end customer direct and makes a margin on the rental fee they pay the rental company.
- Platform provider can access market segments unavailable to the rental company.
- Can provide rental base load which covers overheads.
- Can provide digitalisation solution
(platform) avoiding development costs by rental company. - Speed of deployment.
- Data provision to rental company and additional services based on data analysis.
- Platform provider takes cut of the margin, need to balance business volume to platform to maintain overall profitability.
- Once partnership set up, can constrain rental company to act independently (in defined areas).
- Digitalisation solutions not usually full scope, so some investment still required (e.g. maintenance, telematics, fleet management, etc.).
Critical success factors:
Need a clear strategy as to how the platform fits your customer portfolio
- Provides baseload and then your own direct rental on top generates profit
- Enables growth into different geographic areas by providing baseload
- Enables you to service customer segments you would otherwise not reach
- Do you keep business on the platform or migrate onto your own solution
Need to understand the impact on your business mix, profitability, and ability to service non platform customers.
You have a plan for what happens if the platform arrangement goes sour.
“Customers come to rent assets they can’t find elsewhere, and stay as the platform is fast, more efficient and provides value added services”
DECISION MAKING FOR RENTAL COMPANIES – HYBRID SOLUTION – IN HOUSE, COTS SOFTWARE, PLATFORM PARTNERSHIP
What it involves:
A combination of COTS software (for example in back office automation, asset management, maintenance), platform partnership to access market segments unavailable otherwise and to provide baseload to grow the business so the rental company can open new depots based on the baseload provided by the platform provider, and in house development to deliver telematics and integrate the COTS software and platform into the existing ERP system.
- Platform provider can access market segments unavailable to the rental company and provide baseload.
- Speed of deployment.
- Data provision to rental company and additional services based on data analysis.
- Facilitates longer term service development and business transformation.
- Capability is often higher with bought in systems and platforms than in-house.
- Platform provider takes cut of the margin, need to balance business volume to maintain overall profitability.
- Once partnership set up, platform can constrain rental company to act independently (in defined areas).
- Skills and resources required to manage and integrate.
Critical success factors:
Need a clear strategy as to the role of each element within your customer portfolio and delivery model.
Need to understand the impact on your business mix, profitability, and ability to service non platform customers.
Need a clear strategy to differentiate competitors.
Need intelligent customer capability and in-house capability to integrate with existing systems.
Need to commit funds and resources to development and implementation.
Find out more about:
DIGITALISATION READINESS CHECKLIST
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Strategy
| Clear link between business strategy and digitalisation strategy (business strategy leads) |
See |
| Digitalisation strategy matches customer drivers in target segments | See Chapter 1 & Chapter 3 |
| Implementation strategy (in-house, COTS, platform, hybrid) matches capabilities and resources in the business | See Chapter 3 |
| Understanding the impact of digitalisation on your business mix, profitability, and ability to service non platform customers | See Chapter 1 |
| If relying on platform partnership for your delivery strategy, do you have a plan for what happens if the platform arrangement goes sour | See Chapter 3 |
Digitalisation delivery strategy
| Does the digitalisation delivery strategy – inhouse, COTS, platform, hybrid - match your strategy in terms of budgeting, “ownership” of customers, capabilities and likely development of digitalisation within your business over time? | See Chapter 3 |
| Does your IT delivery strategy and in particular budgeting over time, considered a transformation journey that is likely to include ERP replacement, telematics roll out and data analysis? | See Chapter 4 |
| Do you have the skills and capabilities required to deliver your digitalisation delivery strategy and journey over time, or you have a plan to address any skills and capability gaps? |
See |
Organisation of your digitalisation effort
| Is the business (relevant functions, operations, sales etc) involved and leading the strategy development and decision making for digital transformation? | See Chapter 4 |
| Are you running the digital transformation project as a business transformation project and not just an IT project? | See Chapter 4 |
| Do you have a clear business case for the digitalisation transformation? | See Chapter 4 |
| Have you aligned the tracking of benefits and results with business KPIs | See Chapter 4 |
Process digitalisation
| Do you have a strategy to bring your staff along with you and manage change and business transformation as you digitalise your business processes? | See Chapter 4 |
| Does your business process digitalisation strategy cover integration with operational aspects such as sales management, credit control, HR, QHSE? | See Chapter 4 |
| Does your process digitalisation strategy consider if, and when, you will need to update your ERP system? | See Chapter 4 |
Telematics implementation / data strategy
| Do you have a telematics implementation strategy – which assets, linkage to business processes and how to talk to different telematics solutions? | See Chapter 4 |
| Does your digitalisation strategy cover creation of a data lake / warehouse, analysis of data and development of new services and solutions? | See Chapter 4 & Chapter 5 |
| Does your digitalisation strategy cover the use of data to transform your business model in areas such as commercial offers, service delivery (depots) asset / fleet management etc? | See Chapter 4 & Chapter 5 |
Go to market / customer engagement
| Does you digitalisation strategy align with the different needs of different customer segments | See Chapter 1 |
| Have you engaged your digitalisation strategy to empower and transform your sales organisation (see implementation case study) | See Chapter 4 |
| Does your sales front end still allow for traditional (phone and in-depot and sales staff engagement) as well as digital engagement (Multi-channel engagement) | See Chapter 4 |
| Have you developed the customer journey and support you provide to educate and migrate customers onto digital platforms from traditional servicing |
See Chapter 4 |
Asset management
| Does your digitalisation strategy enable efficient and effective fleet management via data analysis and effective forecasting | See Chapter 2 & Chapter 4 |
| Does your digitalisation strategy provide data which will inform and drive your procurement decision making | See Chapter 2 & Chapter 4 |
| Does your digitalisation strategy deliver increased fleet availability via effective and efficient fleet maintenance | See Chapter 2 & Chapter 4 |
| Does your digitalisation strategy use data analysis to drive asset disposal | See Chapter 2 & Chapter 4 |
Proposition development
| Does your digitalisation strategy cover how you will reach and engage target market segments and drive customer acquisition | See Chapter 1 , Chapter 2 & Chapter 4 |
| Does your digitalisation strategy cover how you will drive customer retention and lock customers in | See Chapter 1 , Chapter 2 & Chapter 4 |
| Does your digitalisation strategy cover how you will develop added value services and propositions and develop additional revenue streams for your business | See Chapter 1 , Chapter 2 & Chapter 4 |
Business model development
| Does the digitalisation strategy go beyond customer engagement and sales, process transformation and solution development and create a vision of how the business can transform to capitalise on data and customer and market understanding | See Chapter 5 |
| Does the business strategy include scenario’s for how competitors may transform their business through digitalisation and how your business will respond | See Chapter 3, Chapter 4 & Chapter 5 |
| Does your digitalisation strategy align with the strategies of key customer segments and how digitalisation can support and enable your customers strategic development | See Chapter 1 , Chapter 2 & Chapter 4 |