7 Investment Factors to Consider Before Investing in Equipment Rental ERP

If you find yourself regularly searching the internet for workarounds to make your different equipment rental software systems work together, there’s a good chance your current infrastructure for managing your rental equipment, business financials, inventory, and reporting are not working that well together. If your existing systems are causing you and your staff headaches and the finance team is spending countless hours on reconciliations, it’s time to consider transitioning to an ERP.

Transitioning to an ERP is a big decision, and the cost associated is an essential factor. If you’ve already done some looking, you probably have questions like if an ERP solution for your equipment rental company is a quality investment. There might even be some initial sticker shock. So, we’d like to offer a critical look at what investment factors and considerations impact the cost of acquiring a centralized equipment rental ERP solution and how that compares to operating with disparate systems to manage your business.

What Will an Equipment Rental ERP Do for My Business?

Enterprise Resource Planning software, or ERP, is a system designed specifically to help businesses find efficiencies, centralize data, connect departments, and automate procedures. A well-planned and implemented ERP system can help your rental equipment business move into the next phase of growth by centralizing all your operational processes and data, including:

• Finance and accounting
• Human resources
• Rental, equipment, and fleet management and service
• Inventory management
• Purchasing and supply chain management
• Warehouse management
• Manufacturing
• Project management
• Reporting, analytics, and business intelligence

It’s difficult to understate the value of managing your rental equipment business in one single platform. The possibility for process efficiencies and greater productivity is huge with an ERP system, not to mention fewer data errors and discrepancies, which results in more capacity for your staff to acquire new clients and provide better customer service to existing clients.

With improved operational visibility and accurate data being shared across the organization, an ERP system leads to significant cost savings and increased profit margins in a short amount of time. For a modern rental company focused on staying competitive and increasing profitability, this type of software is imperative to success. To learn more about equipment rental ERP and how it works, download our detailed whitepaper below.

An Introduction to Equipment Rental ERP

Why Is ERP Perceived to Be More Expensive Than Standalone Software?

ERP systems are often perceived to be more expensive than standalone software at first glance.

The initial investment costs for an ERP solution typically range anywhere from $150,000 to $750,000 for a mid-sized business (ERP Software Blog). But if you compare this with the actual costs of multiple standalone software, the time your staff spends reconciling between multiple systems, duplicating data entry, or performing workarounds—the investment discrepancies might not be what you expect.

Over the long run, an ERP can scale and grow with your business in ways that standalone systems can’t while providing superior insight, enabling you to capitalize on market opportunities, streamline processes, and elevate both employee and customer retention. When considering the factors of an ERP investment, it’s important to understand the magnitude of equipment rental operations you can bring together in a single place. Where bespoke, separate systems need their own maintenance, management, technical expertise, licensing, support, upgrades, and infrastructure, a centralized ERP solution for equipment rentals can combine all of this into one.

Not only does eliminating unnecessary, redundant resources and efforts save costs nearly immediately, but the efficiency of bringing your business management operations together in a cloud environment is unparalleled. You completely remove the data silos that require manual reconciliation of information and reporting from one system to the next. Real-time analytics across everything from sales, finances, fleet utilization, and more are embedded and available at the click of a button. Audit trails across all facets of the business are automatic and seamless.

Read Blog Post: Comparing Software for Equipment Rental Companies

You will find that on a 2–4-year comparison of cost requirements for your business management infrastructure, a unified equipment rental cloud ERP solution built for efficiency and optimization will win over home-grown, disconnected systems in nearly every instance. Not to mention, the ability to maximize market opportunities, gain a competitive advantage, and empower your people with their talents instead of unnecessary administrative overhead, is only obtainable with a modern approach to technology infrastructure through an ERP system like ODT Rentals.

The up-front outlay and investment in your equipment rental ERP may include all or some of the areas in the table below. If you need any of these tailored a bit more to fit specific business or process requirements, that can also add to initial configuration scope factors.

Financial ManagementIncludes AR, AP, GL, bank reconciliation, fixed
asset management, month and year-end closing, complete financial reporting.Rental ManagementRental contracts, sales, rental terms, product availability, batch invoicing, sub-rental management, service, availability calendar, and more.Equipment Service DeliverySchedule maintenance, repair templates, return inspections, track equipment repair history, timesheets, manage service budgets, and more.Fleet Tracking and ManagementUtilization, age, washout, group analysis, repairs, procurement, and more.Inventory ManagementForecasting, inventory control, shipment, distribution, and returns.PurchasingProcurement, purchase line discounting, purchase order management, and vendor
management.Human Resource Management (HR)Employee registration, absence tracking, employee contracts, confidential information,
and qualifications.Warehouse ManagementBatch receiving and shipping, cross-dock items, picking items, assembly management, and advanced warehouse configuration.Supply Chain ManagementPurchase invoicing, purchase order management, basic inventory, supply planning, demand forecasting, and order planning.ManufacturingProduction orders, output, posting, subcontract manufacturing, batch post consumption, and more.Project ManagementCapacity planning, budgets and estimates, job and process costing, and resource management.Real-Time ReportingReal-time financial and operational reports at the click of a button, customizable to individual business and user requirements.Analytics and Business IntelligenceVisually stunning dashboards and metrics in Excel and Power BI that tell the bigger story of performance, market opportunities, operational gaps, and deliver accurate answers for proactive decision making.

7 Investment Factors That Affect the Cost of ERP Implementation

There is a wide variety of ERP systems available on the market today that vary in functionality and complexity. Because ERPs are robust and scalable systems that impact all areas of your rental business, your overall ERP investment will ultimately reflect the specific needs of your business. Here are the different factors that can affect the cost and scale of an ERP system for your business.

1. Company size

The number of departments or business units in your company, the number of users that need access to the system, and the levels of access each individual needs will affect the cost of your ERP system.

2. Functionality required

Some businesses can operate from an ERP right out of the box, with the existing setup and maybe a few add-on apps. Some companies will require more customized programming and development to suit their business. Luckily, Open Door has developed apps specifically tailored to the equipment rental industry, so you may not need any additional customization for your business.

3. Cloud hosting and IT support

The Microsoft Dynamics 365 Business Central is a cloud-based subscription service, so there are subscription costs. The ERP development team will need to work with your IT department to set up your ERP. It’s unlikely that you will need any hardware upgrades with a cloud-based system, but if you do, you may have some additional IT costs involved in setting up your ERP.

Read Blog Post: Equipment Rental ERP Software in the Cloud

4. Support and training

One of the most crucial aspects of transitioning to an ERP is having a partner, like Open Door Technology, that helps you through the process and provides support for your team. The support package you choose will affect the end cost of your ERP.

5. Data migration

Data migration from multiple standalone and legacy systems takes time. How much data needs to migrate to the ERP, the complexity of that data, and how many different systems you need to move data from will affect the cost of your ERP.

6. Reporting requirements

ERPs are capable of almost endless reporting options. You may only need the built-in reporting options, or you may need more complex reporting options customized for your business.

7. Implementation plan

Whether you phase your implementation over time or go for an all-at-once approach should not affect the overall cost of your ERP in the long run, but it may change the upfront cost, so you’ll pay for it over time instead of all at once.

What are the Actual Long-Term Benefits of an ERP?

As we mentioned earlier, having multiple bespoke software for different departments might seem like a more budget-friendly option at first glance, but when you compare it to long-term use of an ERP, it doesn’t even come close. It’s the more expensive option in terms of budget and has a negative impact on company growth, employee satisfaction, and ease of doing business.

Here are some of the top benefits of having a well-fit ERP:

Centralized Business ManagementHaving all of your business data in a single centralized platform saves time for all of your staff. It also reduces the likelihood of data errors and the amount of reconciliation required. On top of that, it means you have access to live data from all your departments, which means you can make business decisions proactively based on current data instead of data that is weeks or months old.Process EfficiencyWith a single source of data, your team spends more time working in their zones of genius and less time hunting down information. This applies to everything, from AP/AR to inventory to service scheduling and more. With everything in the same system, your staff can pull information quickly and get on with the job.Less Human ErrorsAdding data to the system one time means much fewer opportunities for mistakes. It also means occasional data entry mistakes should be easier to catch and faster to correct.Fleet VisibilityHaving your fleet connected to the rest of your systems means you’ll have all the details you need about fleet units at your fingertips. You’ll know exactly what’s available right now, when a unit will need service, how long it’s been in use, and whether or not it’s being utilized to its full potential. That means easy data to help you make decisions about how to optimize your fleet, as well as easy access to accurate availability for field techs or sales staff.Customer ServiceWith access to inventory, fleet, historical data, and everything else, you and your staff can provide excellent customer service in an instant. You won’t be promising equipment that doesn’t exist or isn’t available.Better Data ManagementWith data about fleet utilization, equipment rental and service records, sales trends, customer relationship history, and so much more, you can make smart business decisions faster. Whether that’s expanding a fleet or downsizing under-utilized items, you can be on top of the game and reach your business goals faster.CustomizationMost businesses don’t match the exact cookie cutter that standalone systems were designed for. A Microsoft ERP gives you the ability to develop custom solutions to fit the exact needs of your business.Partner SupportWith an ERP partner like Open Door Technology, you can trust that we’ll find a solution because we know the system inside and out, and we took the time to really understand your business as well. We know how all the parts work together, and we can make them do what you need them to do.

Is It Time to Invest in an ERP?

There’s a lot to consider when you’re thinking about an ERP, not the least of which is what exactly you’re investing in. If you think it’s time to move to an equipment rental ERP, we can help.

First, you can download the whitepaper, “Compare the Top Equipment Rental Software Solutions.” This whitepaper will give you a comparison of the top 6 rental software products. It’ll also cover:

• The top reasons companies are choosing cloud ERP
• How to find the right ERP for your business
• A breakdown of the top business management software solutions

You can also download the “Equipment Rental Software Evaluation Checklist.” It’s a comprehensive, printable guide to help you assess your equipment rental software options. It gives you:

• A list of questions to ask potential vendors
• Space to take notes as you assess each product

If you’re ready to explore further, you can get started on your journey toward equipment rental ERP today by requesting a free, no-obligation demo or quote. We can discuss what ERP solutions might work best for your business and get you headed in the right direction.