Perhaps you’ve heard the term business intelligence, but aren’t quite sure what it refers to. Is it some sort of a measure of your potential for success as a business person? Is it a trait you’d be assessed on in a personality test, like extroversion or agreeableness?
In fact, business intelligence (BI) refers to technologies, applications and practices used to collect, analyze, interpret, and present information. Who’da thought, right?
Well, prepare to get smarter. Already in popular use in its elementary and intermediate capacities, business intelligence promises to change the way rental companies do business. But don’t let that scare you. You won’t need to hire a team to comb through terabytes of data, or be a tech genius to get up to speed. True business intelligence, experts say, will take a lot of the work right out of your hands.
From a historical perspective
According to Greg Lewis, co-founder of Fame Intel, a full-service rental business management software company, BI is more than just technology, it’s a strategy used to analyze data for information in order to see the historical, current and predictive views of business operations.
“The world that we live in is at an interesting point,” he says. “Almost all rental companies are living in the historical world in terms of intelligence. If I want to know about my utilization, my data is going to be behind real time by a couple of days or even a couple of weeks. The rental industry is an incredibly fast-paced industry, and it’s mobile in the sense that equipment is being delivered all over the place, and constantly going on and off the yard. But systems are still widely paper based, so there’s a lag before anyone’s keyed anything into the system. From a BI standpoint, you’re always a few steps behind.”
He continues, “One of the reasons the industry is begging for mobile-first solutions is because we want to move to the next step, which is to be current with real-time information. It’s so important, not simply because we want to make it easier to see what’s going on, but because we want to be able to look ahead and prevent problems.”
Predict and prescribe
The next step is to begin to use BI to predict what’s coming so decisions can be made much more proactively. For example, with the most up-to-date info on fleet utilization, you might be able to look at buying or selling units based on better data. Likewise, things like late deliveries could be anticipated, allowing you to provide better service by calling your customer ahead of time.
“The third step is the most fascinating,” explains Lewis. “Once we eliminate pen and paper and get real-time information, we can set targets. Not only could you stop managing by exception - looking at a big Excel sheet filled with data that you don’t know what to do with – once you have predictive analytics you can take it one step further to ‘prescriptive’ analytics.”
Lewis says predictive analytics take place only in systems smart enough to not just say a machine is due for maintenance but to also then place a purchase order because it knows you’re running low on oil filters.
“The system prescribes the solution, not just identifies the problem,” he explains. “It’s so fast, the system is prescribing solutions in real time. It might seem overwhelming to rental companies, but it doesn’t have to be this crazy, massive process. It just lets you know ‘you need this part and I’m going to go ahead buy it for you.’ You get a notification on your phone, click okay and you’re done.”
Ready for this?
We’re clearly moving into a world where systems are being programmed to take care of things on their own. But are all rental companies ready?
“The next stage is making it so simple, we won’t need analysts with a degree in stats to manage the data,” Lewis says. “It’s just very simple: We plug in here are the goals I want to meet. If I want a minimum of 65 percent time utilization in this cat class, for example, predictive BI would give me an alert in real time when anything falls below 60 percent. With the next step, prescriptive analytics, I’ll get an alert when an item has been idle for two weeks, falling below 65 percent, and then a prompt asking if I’d like the system to check auction prices, or offer other suggestions.”
He continues, “We’ve already gotten to the predictive analytics point. We’ve been able to set targets very simply - for really anything you want to measure – and set automatic notifications. The next phase is the prescriptive aspect and it’s much more challenging because it involves machine learning.”
Going mainstream
Lewis says technology has already made the tools available to get to the prescriptive phase of BI, and it’s being used in some settings.
“Our team is already plugging into tools to play with ideas and help companies utilize their data,” Lewis says. “We’re probably only one or two years down the road from mainstream adoption.”
Of course, effective prescriptive BI depends on the user and how reliable their data is in the first place. To lessen the potential for human error in this regard, systems must be able to validate data at the time of collection. The most advanced systems are built to extract trends, etc.
“If you use Outlook, we integrate with it, logging every email sent out. That data is captured automatically,” Lewis says. “Larger customers often have a team dedicated to data alone, but smaller customers sometimes just want us to show them how to use the system so they can build their own user experience, outside of the realm of BI but still applicable. It’s very easy to design the system the way you want to see your data, with rich graphics or just numbers, for example.
“It’s extremely customizable,” he continues. “We have an out-of-the-box template that we offer, and then it’s up to the client to choose what they want to utilize. That’s the difference between having an application and having a platform. An application, by definition, puts you in a box; it’s built to perform specific functions. Whereas a platform, at its core, means you have the ability to plug into as many applications as you need, or build brand new ones.”
To that end, Lewis notes that Fame Intel can interface with 550 applications, allowing clients to pick and choose which add-ons they want to make use of.
“They can measure everything from the American Rental Association’s standard metrics, including time utilization, dollar utilization, fleet aging,” he says. “But also things like how long a machine has been sitting idle, or how long it’s been in the shop? There are countless metrics.”
Adopt or lag behind
The concept of allowing your management system to make suggestions and prompts for business decisions is exciting to some but terrifying to others. Overall, Lewis says the North American market is a bit scared.
“A lot of promises have been made, and companies are still looking to see the results,” he says. “But the next generation is now here, taking over and wondering how to succeed. It’s going to take a few companies to really be on the cutting edge to show what’s possible. This will be the same as any other technological advancement, there will be early adopters and there will be laggards.”
He continues, “Rental companies just have to ask themselves, how long before it’s too late? Looking at the sharing economy, at the rate aggregators, at the technology the nationals and big boxes are investing in… how long do you wait?”
How about the smaller, independent rental companies? Is it do or die for them?
“It will be different, depending on the company. Some companies have customers who are so loyal, they’ll never leave them no matter what, and that’s fantastic,” Lewis says. “The question those companies are asking is whether they want to provide that extra service. Other companies, in more competitive environments, might start losing deals if they can’t offer the same level of service as the nationals.”
Thankfully, cost is no longer a barrier to entry.
“Companies used to pay $10,000 up front for an enterprise system, and then $2,000 every year after,” Lewis says. “Now you can pay 4-5% of $10,000 on a monthly basis. You used to need deep pockets, but within the SaaS model today, you can get started for as low at $100 per month per user.”
What does the future hold?
In five years, renting will be a completely different experience for contractors, Lewis predicts.
“They’re going to be younger, more tech savvy and with expectations to be able to rent something on their phone,” he says. “There will be far less human interaction than today. Wait times will go down to nearly nothing. Everything in terms of service will be dramatically different.”
He continues, “Rental companies, from an operations standpoint, will be running far leaner. There will be almost no miscommunication and fleet will be more highly utilized when using BI to leverage decision making. Companies will be maximizing simple things like warranty chargebacks, which most don’t do now because they don’t have the resources or the technology. In the future, independents will be more profitable and will be able to better compete with larger companies.”
Unlike many industry experts making predictions for the future, Lewis says independents stand to gain the most from technology like BI.
“I think this is just the start for the independents,” Lewis states. “They offer incredible value to contractors. They can serve the contractors the larger nationals aren’t willing to, provide more niche products, and purchase far faster. There are so many reasons contractors prefer to work with independents and now technology will allow them to leverage those benefits much further.”
Greg Lewis, co-founder of Fame Intel, is believes it should always be fun to do your job. That’s why he and Fame are on a mission to provide software that frees people from stress, allowing them to dream bigger and make fearless decisions. He has spent the last six years focused on helping Fame leverage web-based and mobile technologies, specifically for the equipment rental, sales, and service Industries.
