12 Trends Shaping Rental Computerization

May 1, 2004
In January, Rental Equipment Register examined 25 Trends That Might Matter to the rental industry. Now, from the same perspective, here are 12 trends

In January, Rental Equipment Register examined “25 Trends That Might Matter” to the rental industry. Now, from the same perspective, here are 12 trends in rental computerization — some have been gaining steam for the past several years, others are on the leading edge in 2004. All could influence what you will come to expect from rental software and its role in your operation.

  1. Radio Frequency Identification (RFID)

    This new technology could revolutionize the way certain rental businesses operate. RFID uses tiny computer chips to identify individual items. Each chip is encoded with a number that is constantly transmitted and can be read by an antenna up to several feet away. The chips are more practical than barcodes for rental, since barcodes have to be within a few inches of the reader and also require line-of-sight for the reader to work. As an example of RFID applications: Chips can be attached to chairs and tables, or sewn into linens, and read into your rental computer system as this inventory is loaded for delivery, warehoused on a skid or racked. Furthermore, the chips are inexpensive — some cost only 65 cents each.

  2. Purchase cards

    A purchase card is a special type of credit card, most often issued by major card companies such as American Express, VISA or MasterCard. When a transaction is paid using a purchase card, information must be automatically transmitted about each of the items on the invoice as well as taxes, damage waiver charges and other data. This data, known as Level II and III, includes the seller's special status such as minority ownership and small business designation.

    Many government agencies, municipalities, educational institutions and public companies now require their vendors to accept purchase cards as a condition of doing business. The customer's objective is to create paperless and automatic accounting of key information associated with each transaction. The rental store's computer system must accommodate the special processing associated with purchase cards. Otherwise, there also will be higher third-party processing fees involved. Many rental businesses find purchase card compliance to be worthwhile, as it allows them to solicit business that would be otherwise unavailable.

  3. Global Positioning Systems

    These systems have progressed far beyond their original intention in rental operations, which was to assist in recovering stolen equipment. Now GPS technology can also transmit information about hour meters and engine operating conditions, and can verify that a machine was or was not operated after being called off rent. It can even notify the rental business if a piece of equipment leaves a jobsite, preserving lien rights. This has benefits, particularly when expensive or theft-prone heavy machinery is involved. GPS vendors see the equipment rental industry as well suited for this technology. Consequently, integration with rental computer systems is on the front burner.

  4. Second-generation rental owners place value on management reporting

    Many rental startups from the 1970s and early 1980s are making the transition from the founders to sons, daughters and, in some cases, longtime employees. These new rental operators tend to be more familiar with computers and appreciate formalized reporting. Some have worked for public rental companies over the course of their careers, where computer-generated reporting and analysis is incorporated into daily decision-making.

  5. Customized management reports

    When rental software was first developed, reporting was fairly basic and extracted data according to the programmer's design. Many early report structures followed a strict accounting pattern: end of month, end of quarter, etc. Over the years, the range of reports available to rental businesses has broadened and become more business-specific. The data generated by rental transactions can now be extracted into spreadsheets and third party reporting programs, organized to suit specific needs. Many smaller rental businesses see timely information as a way to level the playing field, regardless of the size or resources of the competition.

  6. Customized documents

    The concept is similar to customized reporting (flexibility to suit specific needs) but the focus here is on the customer. Different customers or customer types may require that rental documents be customized to industry standards or to their individual ways of doing business. Event planners and caterers, for example, often want to suppress pricing on delivery documents but show pricing on invoices. Rental systems that allow the user to create custom quotations, reservations, contracts, invoices and statements help rental businesses market themselves as receptive to and knowledgeable about the requirements of the customers they serve.

  7. E-mailed documents

    More and more end users of rental services are asking rental suppliers to submit quotes, invoices and other documents via e-mail rather than by fax or snail mail. When proper controls are in place, e-mailed documents can be efficient and cost effective for all parties. The key word here is control: As a rental business make sure the document is a type that cannot be altered by the recipient. Usually, this is done by converting the document to a read-only PDF format before e-mailing it.

  8. Windows as a rental operating system

    Microsoft has worked hard to solve the weaknesses that have kept Windows from widespread acceptance into demanding business operations. Recent releases of Windows such as XP have helped stabilize the operating system to the point where it starts to become feasible for rental businesses. A large part of the rental industry will always want and need Unix-based operating systems, but Windows has an undeniable cache, particularly with smaller rental operations or those with environments that are more like an office and less like an equipment rental counter.

  9. System turnover

    A substantial number of the new systems being sold today are replacing original rental systems purchased. Rental computer buyers on average are more IT-savvy and experienced than they were 10 or even five years ago. This evolution is good for the industry as a whole and for rental computer companies in particular, as their software is held to ever-higher expectations. With solid rental systems now in place, leading computer companies are likely to focus some part of ongoing software development on refinements that serve niche needs, based on customer feedback.

  10. Disaster recovery concerns

    September 11 changed the way many large businesses prepare for continuity of operations given a catastrophic event. While this is slow to trickle down to small business, there is a growing sense of the importance of data protection. Data backups that can survive a fire, flood or major system failure provide more than peace of mind for the rental operator. A data archive can save massive amounts of labor required to recreate transactions from just one day or one week — if they can be recreated at all. Data recovery options now available to the rental industry include real-time data transmission over the Internet to an offsite storage bank, or a second server on site pulling data continuously from one location or across a network and archiving it over the course of each business day.

  11. Manufacturers encourage online ordering

    Equipment manufacturers have come to realize the efficiencies inherent in online processes such as parts orders and product support. From the rental operator's standpoint, there are substantial benefits to using rental software that has been integrated with major industry suppliers via a facilitator such as SmartEquip. These benefits include labor savings in the shop and field, transactional savings in ordering and fulfillment, improved uptime for equipment and better risk management. Technological roadblocks have primarily been due to a lack of standardization among manufacturers, but the mutually beneficial nature of the process gives all parties strong incentives to make it work. Rental businesses will be the big winners here.

  12. Companies adding rental operations onto retail or distribution operations

    The Associated Equipment Distributors has seen a steady stream of its members enter the rent-to-rent market since the mid-1990s. Rental departments have also become common in retail hardware chains, large outdoor power equipment dealers and other outlets that traditionally focused exclusively on retailing or distribution. Consultants to these industries have repeatedly emphasized the importance of treating the rental operation as a distinct business, with specially trained employees and rental-specific information technology. As a result, the trend in these operations is away from rental software packages that are “tacked on” to previously developed retail, distribution or accounting systems in favor of software that has been designed from day one to maximize return on rental inventory investment.

Jack Shea is president and founder of Springfield, Mass.-based Solutions by Computer, a developer and marketer of inventory management computer systems for rental operations. For more information, call 800-950-2221, or visit www.solutionsbycomputer.com.