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“Not quite ready for prime time,” is the message about RFID and global positioning systems (GPS) from several manufacturers of rental software including Ray Bonestroo from Genisys Software, Jack Shea of Solutions by Computer, Steve Milcik from Orion Software, Helen Sowerby from Result Group, Don Whitbeck of Texada Software and Michael and Diana Saunders of Xgensoft.

RFID (radio frequency identification) remains a promising technology, but because of technological and physical limitations, it has not had as big an impact on the computer rental software market as was expected a few years ago.

Screenshot Courtesy Of Result Group.

“Three years ago, RFID and GPS were the talk of the industry,” says Whitbeck. “This was the newest, latest, almost there technology and it was soon to be adopted by the rental industry. Three years later, it’s the latest greatest technology, it’s almost there and it’s soon to be adopted by the rental industry.”

Whitbeck explains GPS and RFID technology have come a long way and a number of companies are looking at them. “What is still missing is a hard dollar cost justification for the adoption of those technologies… if I put GPS on my heavy equipment, what does it actually buy me?”

At this time, says Whitbeck, the reductions in insurance and theft costs are not covered by the cost of the GPS technology. “You’re looking at a vague ability to justify why you would equip your entire fleet with it?”

The problem with RFID, says Whitbeck, is that while it is becoming cost effective, it is not yet accurate enough and a special tag is needed to be mounted on heavy equipment. “If you take the inexpensive tags, the 50 cent ones, they’re unreadable because the metal in the machine interferes with the radio signals.”

One method Whitbeck says Texada is working on to overcome the RFID problem is “mount on metal RFID tags” and has partnered with two RFID companies to pilot the technology and make sure it works. “But it’s still not quite ready for prime time… it’s been around and people have been looking at it for three years, they are realizing they’re not getting that pay back.”

New technology that Whitbeck says has enjoyed significant success with its customers are Management Dashboards and equipping drivers on deliveries with a mobile device such as a Blackberry. He says the advantage of field technology stems from the fact heavy equipment rental companies have discovered their drivers have most of the face-to-face contact with customers and can be equipped to handle more of the relationship as well as enabling faster turn-around time for rentals.

“If you have a hand-held device and you check a backhoe in at the customer site, you might get an extra four or five hour window into availability… when you look at increased revenue versus the cost of hand-helds, you’re looking at three to six months’ pay back.”

Whitbeck explains that Management Dashboards “are highly graphical, interactive tools that give you snapshots on the health of your business on a real-time basis.” Using the system, Whitbeck says, “rental managers can tweak their business process as it unfolds so they don’t have to wait until the end of the month to know they had a problem.” Whitbeck says Texada introduced the system in May and they have had “fantastic uptake on that.”

Shea agrees that RFID has not moved very much but purchase cards and credit cards in general have increased, although in the US they require level-three security to qualify for the lowest insurance rates.

Shea says RFID and bar coding have not taken off because there is not the same amount of items being moved, unlike other sectors of the retail industry. “People just don’t see that they’re going to get that much benefit out of it… the profit is very tangential, there is no direct link.”

Purchase cards, says Shea, are being used by larger organizations such as governments, corporations, universities and transit authorities to keep track of what was purchased or used electronically. “When they get their credit card statement, it has an electronic record with it that shows all the things that were bought. And that is what level-three requirement is for Visa or MasterCard, you have to send them the billing information on every line item on every invoice you issue. So it’s pretty extensive.”

Shea says what Solutions by Computer is seeing from customers are demands for more integration with other systems they have. “Level-three can really only be done if you’ve fully integrated with your credit card package.”

The use of GPS also continues to grow, says Shea, including on delivery routes. “Our software can map out a delivery route for equipment being delivered or serviced and the GPS can keep track of whether that route was adhered to by the driver.” According to Shea, customers are ‘drilling down’ for more information on their equipment rentals all the time. “Some of them are saying, ‘I need this information to keep my costs down’. And if your rental management system doesn’t do that… he’ll pass you by.”

In the next few years, Shea predicts what will be more important is data analysis, “allowing the customer to slice and dice the data much easier than it was in earlier versions of software.” He says a feature in Solutions by Computer software allows rental operators to see what products are being rented, by what types of customers, down to rental periods as specific as quarterly, monthly or weekly with graphs that provide information on peak rental times. “It’s very flexible as to what you can get out of the data these days.”

For Xgensoft, bar code scanning demand has increased greatly, according to Michael Saunders. RFID is something the company is going to address shortly, but Diana Saunders adds the company’s basic premise is to keep their products cost effective. “Our premise at the moment is to take technology that’s practical and build it into our program, but still keep it as cost effective as possible,” she says.

“It’s a question of do you jump on the bandwagon right away and try and get it into the product or do you wait until it matures a little bit?” says Michael, who adds customers are a lot more savvy about what they want than even three years ago.

“Three years ago, typically a customer would download one or two products from the web and make his decision based on the fact he saw a few products. Now we get people who have downloaded 10 or 20 products, so, I would say people really compare the features of their software products more than they did two or three years ago.

“RFID technology has been held back for several reasons,” says Michael, such as the problem of trying to put it inside clothing that goes out for rent. “The wearer will decide the RFID is physically uncomfortable and he’ll rip the RFID out. And that does nobody any good.” Michael says the RFID technology has a bit of a ways to go in terms of developing utilitarianism, but it is getting there.

What customers are looking for, according to the Saunders, is ease of use. “It’s our opinion that people are moving away from very complicated pieces of software,” says Michael, although, Diana notes that despite the demand for easier to use products, the software has to be able to do very specific tasks. “It’s a double-edged sword. It’s not all one way or the other.”

Whatever customers are looking for, the Saunders say their customers now see rental software as an essential part of their business. “We get a lot of converts,” says Michael. “People who have not had software and decided they can’t live without it any longer. More and more, software is becoming an essential part of people’s business rather than a luxury.”

Technological problems have also been the biggest reason for RFID not taking off, according to Steve Milcik, who says the technology does not work well on metal surfaces or in boxes. “At this point, check-in and check-out of inventory items is still much simpler using traditional methods.”

While Milcik says that RFID could work in some industries, like party rentals that specialize in linens, it would have to be a very high volume industry to be cost effective.

“Right now there is a perceived lack of return on investment that is really slowing adoption,” says Milcik. “Businesses feel current technology is sufficient… it’s still out there, it’s not 100 percent yet. We still see it as a viable part of the future but it’s not going to be immediate. Customers want technology that will bring them tangible results today, such as web shopping carts, electronic signature capture and credit card processing.”

Milcik says one of the problems with introducing new technology is that what customers think they are looking for as a solution is not always what they really need. While there is great demand for bar coding and Milcik says Orion’s software is fully capable of all aspects of bar coding including scanning, batch scanning and printing, “The application of bar coding in many rental operations is much different than the dream the client has.”

While customers are hoping to use this technology to increase the speed and accuracy of their transactions, Milcik says that many rental items do not lend themselves to having a bar code on them so that it remains viable over time. Bar code labels are fragile and can easily rip or fade away due to wear and tear. He explains that customers will have to ask, “Where did I put the bar code on this chainsaw?” They will need to lift it up and look around and find the bar code.

Milcik says there is a constant goal to improve the rental process, but current technology does not always support the wish to automate the process due to physical realities. He adds that while the problem can be solved by havingthe bar code in a book beside the cash register, “Have they saved time? Not necessarily.”

In order to solve the problems with RFID, Milcik says there will probably be some pilot projects in large organizations and limited deployments to see if it works. “All of those things will bring a higher level of acceptance and bring the cost down. Whatever happens with this or any other future technology, if it is proven to bring value-added benefits to our customers then you can rest assured that Orion Software will be offering it to their customers.”

Providing a view on the industry from the other side of the Atlantic Ocean is Helen Sowerby, development director for Result Group in West Yorkshire, UK, who says the company has been selling specialist software since 1994.

“Our java based product, Rentalresult, manages all aspects of rental including order processing and fulfillment, sales management, asset life cycle and inventory, servicing, financials and Customer Relations Management (CRM),” says Sowerby. “Other projects we are working on include expanding our third party haulage system; developing a whole range of additional features to complement our lost opportunity and quotes system, in particular notifications to users when equipment becomes ‘available’ unexpectedly and expanding our purchasing capabilities for companies with large parts distribution businesses.”

While customers are more aware of what they want, Sowerby says the challenge is “being able to differentiate between ‘wants’ which are going to make a real difference to the bottom line, to ROI and to ease of use, and ‘wants’ which are simply the result of habit and history in that particular client’s branches.”

Sowerby adds that while the demand for more features is always strong, if the features are not easy to use then the investment is wasted because users ignore them. But whatever type of technology companies are looking for, Sowerby says what they have in common is that they see the software as essential to their business. “The days of using your rental software purely to create invoices has long gone.”

What is on the horizon for Result Group and other rental software companies, according to Sowerby, is a trend towards customer driven functionality for allowing customers to create orders, select equipment, request deliveries and pickups online or from mobile phones – effectively moving far more into the self-service environment.

Some of the technologies that will become effective in the next three to five years, says Sowerby, include voice recognition as well as neural networks and artificial intelligence that offer increasing signs of applicability and usefulness within the average business.

Genisys Software has been in business since 1989 and president, Ray Bonestroo says the company’s software product is a real-time system written to handle the needs of single and multi-location businesses and from the beginning has been integrated to a multi-user accounting software package.

Bonestroo says the company is currently focussed on its newest 7.2 version of its software as well as its new AlphaRENTAL Mobile application that runs on any smart phone with the Windows Mobile 5.0 or 6.0 operating system and the new Apple iPhone also. “This revolutionary software allows the outside salespeople to have real-time access to the database from anywhere at anytime, and now we have extended those functions to the owner/management, drivers and yard staff. Our version 7.2 is fully graphical but retains 18 plus years of business logic we have developed.”

Customers are very knowledgeable, says Bonestroo, since most of them have had a prior rental management package. “They know what to avoid and the features that they wish they had in their current software.”

While ease of use is always a big factor in decision-making, speed and how the transaction flows are very important, according to Bonestroo, who adds that software is now seen as a standard part of most rental businesses. “It certainly is very rare now to hear anyone say they just don’t want to be automated, which used to happen more frequently. I think they are realizing that the benefits far outweigh any up front investment of time and capital.”

With costs of technology continuing to drop, Bonestroo says it will become more available. “More of the smaller companies will get into GPS tracking of their equipment, both to help with theft prevention and also preventative maintenance. The investment to get into this technology keeps dropping and becoming
more affordable.”

Bonestroo says Genisys also expects more functionality to be added to their Mobile application, as the new smart phones have the capabilities to replace laptops in most areas already, and that advancement will only continue going forward. -end-

*Pat Bolan is a freelance writer based in Exeter, Ontario.