What is driving digitalisation
in the rental market
What are the factors driving digitalisation within the industry, how this is creating change and what does it mean for your business
01
Digitalisation – The market has reached a tipping point… “It is now how, and are we doing the right things, rather than should we digitalise”
The implementation of digitalisation has reached a tipping point due to four main drivers:
1. Customer drivers
- A number of customer segments expect a high level of digitalisation, especially the large customer segment and in the absence of digitalisation, customer costs are increased and a rental company will find it hard to do business.
- Other segments such as the mid market are rapidly embracing digitalised rental as it makes their businesses more efficient and effective, releasing time to manage the site rather than organising rental.
- Finally in some segments, such as the craftsmen and consumer segment, digitalisation has yet to make a significant impact, however it is developing fast and as demographics change over time, digitalised rental will become the norm as younger rental customers who are accustomed to doing everything online increase in importance.
2. Rental companies
- The digitisation of rental processes are transforming a rental company’s cost base and delivering a faster, more efficient and effective service. In addition, rental companies are increasingly offering value added services based on telematics data. These developments educate customers to expect such an approach and are driving change and re-setting expectations across the industry.
3. Equipment and solution providers
- New equipment comes digitally enabled, OEMs are pushing digital added value solutions and software solution providers are selling the benefits across the industry, again educating customers and setting expectations.
4. External factors
- Sustainability requirements such as city centre zero emission zones and carbon emission reporting are delivered by digital solutions, digitalisation enables sustainability requirements to be met and sustainability requirements drive digitalisation. In addition, areas such as insurance are looking at digitalisation as a means to reduce premiums and hence reduce a construction customer’s cost base (due to the positive impact digitalisation has on health and safety and theft). All of these factors are increasing the drive towards digitalisation.
“For us, digitalisation enables automation and excellence, which releases our people from non value added administration, for example, to more customer facing, value added activity.”
Process automation and machine telematics are driving digitalisation from within the industry, however customer acceptance is one of the biggest factors holding back digitalisation in some customer segments
Automated rental processes are more efficient and effective
- Digitisation of the rental process delivers efficiency and effectiveness gains and is a first step on the digitisation journey
- Digitalisation enables effective revenue collection, supports increasing asset utilisation reduces administration costs and delivers enhanced services in areas such as sustainability
Digitally connected machines enable transformation
- Machine data provides visibility on machine availability and delivery of superior customer service
- Data analysis allows for error reduction / elimination and service and proposition (e.g. variable pricing) development
However, customer behaviour change is still the biggest hurdle
- “Only a few look online, still mainly call up the rental company”
- “Not seeing adjustment to rent online”
- “Customer everything last minute,
very traditional, will call up” - “Customers want to negotiate discounts”
- “Typical renter is over 30 years old”
- “Difficult to sell what is new”
- “Younger customers look online –
don’t call” - “the construction industry is only just starting, it’s behind all other industries”
- “Customers in a hurry, need to know the equipment is available, digital enables certainty”
Digitalisation
All customer segments are rapidly migrating to digitalised rental solutions, but different segments have different drivers…
Large construction companies
Digitalisation offers large companies direct cost reduction as it streamlines back office processes in areas such as:
- e-procurement linked to their ERP systems
- Automation of their paperwork processes
- Elimination of errors and exception management
- Automation of contract management
It delivers cost reduction across their activities by enabling:
- The management of their asset pool (own and rental)
- Facilitates services such as fuel management and material movements
- Supports analysis and management of site efficiency and effectiveness by providing data on asset (and hence workforce) utilisation
It enhances their customer experience as they:
- Receive online rental offers, equipment availability data, last rental data, etc.
- Can receive transparency on what’s on site, documentation on assets and user training
- Can self serve
- Meet planning regulations, laws, CO2 information, modelling
This segment expects digitalised rental
Medium construction companies
Construction engineers are very time poor and an online solution enables them to rent assets quickly and efficiently. Key to this segment is engagement with, and education of, decision makers to educate them on the benefits to their business of digitalised rental.
The streamlining of back office processes and reduction in their costs associated with rental (invoicing, fleet management, contract management) are of immediate value to this segment.
At the current time, the market reports that they are less interested in more advanced data solutions, such as sustainability, rather their own efficiency and effectiveness are the key drivers, however, in areas such as health and safety, interest is growing.
This segment is being targeted by the more successful platforms, often via an availability proposition to get initial engagement, then migrating the customer onto platform usage via delivering efficiency and effectiveness benefits.
This segment is being targeted and is transitioning fast
CRAFTSMEN /
Consumers
This segment is characterised by craftsmen and DIY customers who are used to apps such as uber, booking.com and budget airlines.
The craftsmen rental process is perfectly suited for digitalisation – availability and price offered online and rental achieved via a credit card.
Accordingly, on the back of an ease of use offering, this segment has rapidly moved online, driven by rental companies and an expectation of digital offering as is available in other segments.
The move to digitalisation in this segment is also forecast to accelerate as the market matures.
This segment is a natural target for digitalisation
“Construction engineers are very busy running the worksite and renting equipment the traditional way takes a lot of time”
“Small customers don’t care about fleet management and data, they want to negotiate a deal and get advice”
“Rental customers used to be older men who grew into the job, interested in knowledge, now they are younger and female and just want data and results”
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 |