In the dynamic world of information technology, it can be difficult to pinpoint a trend that has genuine staying power. This is particularly true of mission-critical software, which must stay true to the operational needs of businesses and the transactional needs of their customers.
Several years ago, in RER, I included third-party software integration in 12 technology trends predicted for the rental industry. Integration refers to the process of expanding a system's capabilities by connecting it to packaged applications developed by someone else. Today the trend of third-party integration is strongly entrenched, and virtually unlimited in terms of future potential.
The tipping point for rental software came in the late 1990s when the Windows operating platform became robust and stable enough to support the demands of entire businesses, rather than just individual computers. Until Microsoft sorted this out, many software companies opted for reliability, choosing to develop applications for more stable operating systems such as Unix and the proprietary platforms offered by companies like IBM, NCR, Texas Instruments, Alpha Micro and others.
The great attractiveness of Windows, beyond its user-friendliness of course, is the wealth of software packages that are constantly being developed to run on Windows. To take advantage of this, the rental computer supplier simply needs to have compatible technologies on both sides of the integration — for example, SQL database technology on both the rental system and the application to be integrated. With that in place, integration is not a huge technological challenge.
On a conceptual level, third-party software integration is fairly straightforward. The rental management system houses the information related to each transaction in the business. This includes who the customer is, what equipment is being rented, when the equipment is to be delivered or picked up, when it will be returned, where it is being used, what rate will be charged, and other characteristics of the transaction.
Integration provides the pathway that allows this collected information to be used by other software applications that have been built to manage dispatch functions, monitor equipment activities via GPS technology, transmit invoices by fax or email, manage maintenance functions, etc.
The rental system developer does give up total control over the software when using third-party integration; however, integration lets the developer roll out new applications much more quickly, and with fewer bugs, than with ground-up development. There are additional considerations in using third-party software, such as the way the application presents itself to the user, compatibility issues, and reliance on third parties for support. Ultimately, in balancing the pros and cons, customer needs must win out.
There are many examples of the trend toward integration in our industry, as software companies begin to focus less on adding bells and whistles to rental applications and more on extending the software into other areas of rental operations. In my experience, the best way for a software company to prioritize the hundreds of third-party applications on the menu is to listen to its system users.
As just one example, I believe that RFID technology is a natural fit for virtually all types of rental businesses, but right now we're not seeing much demand for it. Instead, users have asked for and received integrations of SmartEquip, VaultLogic, PartyCAD, GPS mapping, credit card processing, dispatch software, electronic billing, CRM, accounting and e-commerce, among other applications. With so many potential integrations available, rental software developers must consider each marketplace need as it arises, deciding whether to build an application or to integrate with a “best-of-breed package” that has already been developed and proven.
A sound strategy in a weak economy
Each integration adds value to a rental company's IT investment in terms of mission-critical help in running the business. For example, construction equipment rental depends as much on delivery capabilities as it does on the equipment itself. If routing software can improve on-time deliveries, reduce fuel costs and increase driver productivity, that's a home run. There are parallel benefits to be gained in other types of rental as well.
The advantages become even more compelling in weak economies. This year, as in other downturns, many rental businesses are making do with minimized staffs and static inventory. Efficiency and productivity are paramount, as is customer service. If an operation can fire on all cylinders without waste, that expands the opportunity for customer interaction at any staffing level.
In the rental business, employees typically wear many hats. I've seen instances where mechanics and dispatchers have helped out at the rental counter on busy mornings. This requires software that is intuitive and easy to use, particularly if a rental business is cross-training all employees as a way of controlling staffing costs.
The idea of efficiency as a survival strategy is not limited to large rental businesses — in fact, small and midsize businesses are often the first to emerge from periods of economic uncertainty because they are entrepreneurial and resilient. This has proven true in the rental industry in the past, and I would expect the current situation to be no different.
Microsoft Corp. recently released a 2009 Insight Report (available on www.microsoft.com) that determined the main issues driving small and midsize businesses to invest in IT are declining revenues, competition from larger businesses, and general economic difficulties. The respondents said they are focusing on IT investments that directly benefit the bottom line, either by reducing operating costs, improving employee productivity, or acquiring and retaining customers. Many of the third-party applications I described above have been developed for exactly these purposes.
As the economy recovers, I think we'll see the driver of third-party integration shift from the smaller rental firms to the larger ones. For example, to return to the RFID example I gave earlier, my expectation is that the large public rental companies will eventually lead this trend, as they often adopt technologies ahead of the industry as a whole. This should have a positive influence on bringing RFID rental technology to bear across the board in the future.
Unquestionably, information technology is the primary way to level the playing field among rental businesses of all sizes. This has been true for a long time, but the availability of integrated applications has taken that play to a new level. Rental computer systems that embrace this direction truly are mission-critical systems, and their customers will benefit accordingly.
Jack Shea is CEO of rental software provider Solutions by Computer, and a frequent contributor to RER on rental technology topics.
