In today’s competitive landscape, rental companies are evaluating their operating expenses more closely than ever. Eliminating unnecessary spending and reducing OPEX are common goals for businesses of all sizes – from small, one-location shops to larger regional and national operations.
Of course, in any organization, one of the biggest opportunities to reduce OPEX is to reduce wasted time. Wasted time (and as a result, reduced productivity) comes in many forms, but the “common denominator” is often a disconnected workforce. Here, we’ll discuss this issue – and the potential solutions.
Most would say that we are living in the most connected generation to date. Even though this is a true statement, this connectivity – when not managed correctly – can have a negative outcome for a business and its expenses.
It is unlikely that your rental business will have a single software application that does everything you could possibly need. When there is a disconnect between your workforce and the multiple applications they use each day, it can create more inefficient processes and more repetitive work than it solves - which negatively impacts your bottom line.
The other realities of today’s workforce also add to this issue. You likely have employees who work in different departments, different branches, and different hours. Combined with everyone’s work now being spread across multiple software applications, several problems emerge:
So: what’s the solution?
Find out what processes are the largest drain on your time (and therefore, the largest contributor to unnecessary operating expenses.) Consider:
You have to understand your current expenses before identifying a new target number (and an action plan to get you there). This requires gathering data in an effective and efficient way.
Enterprise resource planning (ERP) software is built specifically for this purpose. Rental ERP systems offer an integrated suite of applications to automate, manage and analyze core processes. (ERP solutions deliver a more focused, connected approach than using multiple point systems for the same end functionality.)
If you’re not yet on a formal ERP system, you can still track your costs across various systems and spreadsheets. However, as part of a more serious effort to evaluate your operating expenses, reduce unnecessary spending, and improve your bottom line, a system that brings all these efforts under one roof can drive considerable value.
Once you’ve reviewed the corresponding areas of your business, you can identify the largest disconnects and implement changes to reduce OPEX in the areas where the most time is being wasted.
A note: don’t just focus on your current business; think about where you want to be in the future. A well-thought-out road map is essential for properly forecasting your expenses.
Similarly, establish metrics that are relative to your unique business goals. Don't try to run your rental business off another company’s KPIs. Look at what improvements will make you and your company most profitable – both now and in the long run. When expenses are higher than you’d expect in certain categories, take the time to drill down, investigate, and plan appropriate action to cut wasteful spending.
Any time you choose a new software application to help with a particular process, ask: will this be able to connect with our other business applications in an efficient way? If you’re using a rental ERP as your “single source of truth”, consider whether that new application can connect to your existing solution. Or, for applications you’re already using, consider developing a custom integration. This will allow you to reduce manual work, streamline workflows and reduce spending on unnecessary software systems.
Automation is one of today’s best opportunities to reduce operating expenses. Letting software take care of repetitive processes behind the scenes means less “drudgery” for your employees. For instance, you can:
With automation speeding up key rental processes such as these, your employees can spend less time on manual tasks.
Some processes can’t (or shouldn’t!) be automated – but they certainly can be streamlined to reduce the corresponding expense. Going back to the procedural audit you completed as part of your planning phase, identify and prioritize areas where improvements can be made.
For instance: can certain paper-based processes be made digital? On inspections where you’re taking hand-written notes or contracts where you’re capturing inked signatures, could an electronic process be faster and less costly?
Self-hosted software can also be a large operating expense. To reduce these costs, many companies are now using SaaS-based rental systems rather than servers and self-hosted that can be comparatively expensive to buy and maintain.
As an added bonus, cloud-based software tends to help with collaboration, as updates are immediately visible in real time – whether employees are at the rental counter, in the yard, in the shop, or on their way to a customer’s jobsite.
We’re here to help you make your rental business more efficient across every department – from Accounting and IT to Operations and Service.
Our solutions are designed to streamline your most important processes, while giving employees the insights they need to effectively do their jobs. And, with decades of real-world experience in the rental industry, our Professional Services team can help you make the most of your technological investments, implementing best practices that account for your unique business needs – both now and as you grow.
To learn more, contact us today.