How the Internet of Things Changes the Way We Rent
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Industry 4.0 is the name for a trend of automation and data exchange that is facilitated by technology, and especially the Internet of Things. This trend also strongly affects companies in the equipment rental industry, and we already could see the rental market start to make the shift towards this trend at the end of this decade. The American Rental Association is expecting the Equipment Rental industry to grow to 60 Billion Us dollars by 2021 in the United States, and technology is an important reason for that.
Also, more and more equipment producers see rental as a way to shift from selling their goods to offering them as a service or rent them out. Slowly we are moving away from a culture where we need to own everything towards a pay-as-you-go or sharing economy. Studies show that especially the younger millennial generation is a likely age group to participate more actively in a sharing economy. More than half of them would participate more likely with a car-sharing service then owning one themselves.
These factors influence and change the way equipment companies do business entirely. Equipment needs to move all the time nowadays, and therefore we require diagnostics and utilization data in near-realtime. But how do you track where your equipment is located? How much fuel has my customer consumed, and how many kilometers has he driven? How much run time had the power generator? What is the state of your equipment? There are many factors an equipment rental company would like to know. The solutions is that we need to make use of the Internet of Things and its smart sensors and the possibility to gather data like nothing else in times where data is gold. Early adopters have already proven the benefits of IoT. 57% of business buyers say the ROI from IoT is more significant than they expected. The technology is still in an early phase because making rental equipment smart requires more than, for example, attaching a networking module onto a crane. Hardware makers and software developers will have to immerse themselves in the design conventions and business practices of unfamiliar industries to produce real-life business value.
Success in IoT will ultimately revolve around learning a new approach and culture. The learning curve is long, and wide-scale implementation will take time, but the potential is vast. For software developers, this is also a massive change. It is their responsibility to make the most out of the gathered data in defining rules & workflows, which will forward them with business logic into your operational business and in your business solutions like ERP and CRM. IoT data also can help you improve your decision making because it is an excellent source of information for Business Intelligence Dashboards to offer a better insight into your asset performance and utilization. Imagine a business suite that helps you make the right decisions, supports you in your operational excellence with real-time insights, prevents you from significant downtimes of your equipment and allows you to offer the right rental equipment, at the right time, from the right place and to the right conditions towards your customer.
The previous examples of the impact the Internet of things is showing how technological disruption is changing the game for equipment rental and the rental industry in general. Rental companies need to explore the use of these new technologies to stay ahead of their competition. We are heading into a new Rental 4.0 decade, where data will be worth more and more because we will get better at making the most out of it. Rental companies that will be able to act upon these opportunities will achieve higher customer satisfaction, will be more successful, and ultimately become more profitable than non-adapting organizations.