Navigating the Equipment Rental Industry
A Dive into Data and Analytics in the Equipment Rental World
*Ready to elevate your rental analytics game to the next level?* We’ve got you covered right here.
In a recent interview with the American Rental Association (ARA) VP Josh Nickell, North America’s outlook for the heavy equipment rental industry appears to be stabilizing after unprecedented growth since the pandemic. As we anticipate an increase in interest in our data-driven technology in 2024, we appreciate Nickell’s post highlighting the increasing significance of data and analytics in decision-making for rental businesses.
The Shift from Intuition to Data
Traditionally, the construction industry, including heavy equipment rental, has relied heavily on intuition and experience. Nickell points out that the industry still needs to leverage data and analytics fully. While some businesses have started incorporating these tools, widespread adoption has immense potential.
Here at Suite Engine, we know that diving into data and analytics can be overwhelming because it’s hard to decide where to start. That’s why we want to share two specific examples of how some of our rental customers use RPM on Microsoft D365 Business Central and its data and analytics capabilities powered by Power BI to make data-driven decisions.
Dollar and Time Utilization
Our dealers have seen a direct impact on their business just by tracking dollar and time utilization. These metrics help them understand how well their equipment contributes financially to their business (dollar utilization) and how efficiently it is being used over time (time utilization).
Dollar Utilization
- What it is: A Metric that tracks how effectively you are generating revenue from your rental equipment. It considers the total rental income generated by a piece of equipment compared to its total cost.
- Why it matters: High dollar utilization means you get good value from your equipment investment. It indicates that your equipment is consistently rented out and earning revenue, maximizing its financial contribution to your business.
- How to calculate: It’s typically calculated by dividing the rental revenue generated by a piece of equipment by its total cost. The formula is:
Time Utilization
- What it is: A Metric that tracks how efficiently your equipment is being used over a specific period. It considers the actual time your equipment spends on rent versus the total available time.
- Why it matters: High-time utilization indicates that your equipment is actively in use, minimizing downtime. This increases revenue and suggests that your equipment is meeting customer needs effectively.
- How to calculate: It’s calculated by dividing the actual rental time by the total available time. The formula is:
Our customers can easily monitor these metrics by leveraging RPM’s full integration, guiding decision-making, optimizing equipment fleet for better financial performance, and boosting customer satisfaction.
Why Data and Analytics Matter
In the post-pandemic era, as the industry returns to ‘normal,’ the importance of analytics has never been greater. Nickell emphasizes that running reports for dollar and time utilization is essential. “Companies need to be running their reports for dollar and time utilization. It’s not just a free-for-all, buy-everything atmosphere anymore,” he said.
As you embrace data and analytics for the future of your rental business, tracking these metrics becomes a valuable tool for making informed business decisions and improving your business’s overall success.
Go Above the New ‘Normal’ with Suite Engine’s RPM
As the equipment rental industry is predicted to “normalize” in 2024, according to Nickell, embracing data and analytics is your ticket to success. Dollar and time utilization reports are not just numbers; they’re your business roadmap. They guide you in optimizing your equipment fleet, maximizing financial performance, and enhancing customer satisfaction.
So, here’s an invitation for you: Don’t just keep up with the business in 2024; dominate it with data. Start your journey with Suite Engine’s RPM in Business Central and its data and analytics capabilities powered by Power BI.
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