RM Online - Computer Q & A

Panelists for the 1999 Rental Management computerization forum were Ray Bonestroo, Genisys Software, Minneapolis; Kalki Joisher, JK Data Systems, Upper Saddle River, N.J.; Bob Shaffer, Point-of-Rental Systems, Grand Prairie, Texas; Jack Shea, Solutions by Computer, Springfield, Mass.; and Bill Veneris, Interactive Management Systems (Alert), Colorado Springs, Colo.

Editor's Note: Has the time come to move forward and take rental software to the next level - a software product that can interact with our inventories and our management team and, most important, our customer base? That is the basic question facing many rental companies, and it seems clear that if this is going to happen, the Internet will have to be an integral part of a comprehensive rental software program. For this year's technology forum, Rental Management asked computer companies that specialize in rental systems to help us form a clear picture of where the industry is going by considering these questions. The moderator is Steve Kohn, Miller's Rentals and Sales, Edison, N.J., an expert user and rental professional, frequent contributor to RM's Managing by Computer column and former director of A.R.A. Region Two.

1. Customers need a way to connect with rental companies for information and ordering purposes. The Web would seem to be an ideal solution. But the possibilities inherent in the Web go far beyond capabilities such as those. What Internet applications should rental companies be considering in coming years to grow the business, attract new customers, gain efficiencies or realize other advantages?

Bonestroo: The things that rental companies are doing today and will be doing in the future with the Internet are quotes, reservations, inventory availability, inventory data sheets and other information, credit applications, job applications and communications to their remote stores without dedicated phone lines. We have already completed development of some of these areas and have customers doing beta tests, and are working on the others.

Joisher: Rental companies should be considering applications that fulfill the needs of "e-commerce." Simply stated, the rental companies should consider having a Web site with a catchy name and/or phrase that makes the Web site address memorable to their customers/prospects. The Web site should allow a potential or existing customer to check for availability of rental inventory and specifications; check for pricing, ordering and/or reserving available equipment for rentals; make payments on the Internet (via credit cards/debit cards/direct bank transfers, etc.); and get how-to directions and safety manuals for their entire inventory of rental items. JK Data Systems is already developing e-commerce-based rental software for the rental business.

Shaffer: Over the near term, equipment rental companies should be using the Web to sell used rental equipment, market the fact that they rent harder-to-find equipment such as rock trenchers, and provide specifications for equipment in their inventory. Party stores should be using it to provide pictures of their inventory and possibly even allow the customer to create their own price quotes.

Veneris: The Internet is revolutionizing the way business is conducted, and there is no doubt this is happening on many fronts. Rental operations should be aware of the many benefits of doing business on the Internet. For instance, because of the lower costs associated with processing orders electronically, many products are sold on the Web at a lower cost. Also, using Web search engines, rental stores can check pricing from all possible suppliers to find the lowest price. Purchase orders for resale items or rental inventory can be transmitted electronically, speeding up the delivery of items. Rental operations also can use the Internet for on-line banking, direct-deposit services for payroll and the electronic filing of income tax forms. Rental businesses also are beginning to link remote locations using "virtual circuits" set up on the Internet.

2. Specifically, with regard to its value as a marketing tool, how could the Web be put to best use?

Bonestroo: There are lots of ways a rental company can use the Web as a marketing tool. If they are selling used equipment, it now allows them access to people all over the world who might want to purchase that item, which is a common way for developing countries to get access to inventory that they could not afford to purchase new. As far as marketing to your potential customer base around the area of your store, you will have to advertise your site to attract them to it, as they probably would not search for it by name unless they were already aware of its existence. Once they were there, the Web site would be a perfect way to show off your inventory, get them a map to your store, show them your hours of operation, talk about the rental process, etc.

Joisher: The availability of an online catalog at a catchy-name Web site becomes an excellent marketing tool in itself. [Also use it for] maintaining a client e-mail list and sending periodic e-mails to announce the availability of new equipment/rental items, price specials and newsletters with tips on maximizing productivity of equipment rented.

Shaffer: It will be a great way to market used rental equipment. And the larger the equipment, the better this medium will be. Party stores should take advantage of the marketing potential. Picture displays and an accessible quote system could significantly reduce the time it now takes for rental store employees to "build" an order.

Shea: First of all, every rental store interested in marketing on the Internet should have a Web site that displays or lists inventory and conveys the service personality of the business. Beyond that, there are a number of additional steps you can take to increase exposure and keep your name in front of the mass market. For example, take the time to make sure your store is listed with as many Internet Yellow Pages databases as possible, and participate in the virtual retail communities that cover the towns or regions you serve. Many of these listings are free (particularly the business locators), but you have to make the effort to go online and enter your store's information. Web sites are an excellent medium for couponing and register-to-win prize incentives that encourage mass market visits, and it's possible to develop partnerships for this with local radio and television Web sites as an alternative to traditional media. To encourage visits from prospects, arrange to hyperlink your site to the Web sites of industry associations and "companion" businesses (like commercial catering and contractor Web sites). And, of course, online auction sites can be used to sell used equipment.

Veneris: One of the strengths of the Internet lies in the ability to provide more in-depth content than is possible with other mediums. Because Internet users can select which information they want to access, you can put a lot of information on your Web site and allow the user to decide what they want to read. There is no doubt that rental stores will use the Internet to process reservations, communicate with customers and vendors, etc. It may be, however, that the more Web-savvy rental stores also will provide "enhanced" content - so that they will in effect act as a one-stop source for not only rental items, but information about the items (such as equipment specifications, operating instructions) and helpful instructions on how to do certain tasks (for instance, how to seal your deck). This enhanced content will position your rental store as a knowledgeable source that solves customers' problems vs. just taking orders over the Web.

3. Many of the online companies today are able to use previous online ordering information to establish models for future buying trends. For example, Amazon.com will e-mail book selections that customers might enjoy, based on past orders. Will rental software one day be able to establish customer trends and buying habits and automatically e-mail weekly specials or pertinent information on new items they might be interested in?

Bonestroo: Definitely. We have already done this years ago for our video rental customers that use our product for that industry called MovieRENT. While books and videos are different from equipment or party rental inventory, certainly a lot of the past rental information can be used to suggest to the customer other items that might be of interest, based on what they have done with you in the past. Each time you purchase a new rental item that you previously didn't carry in your rental inventory, you could e-mail the customers that have rented a similar item so they knew about the item for their future reference. You could automatically include data sheets in your e-mail so the customer knew the specifications of the item, including pictures and dimensions.

Joisher: Good, currently available rental software already accomplishes the establishment of models from the previous ordering information, to automate the promotion of rental specials based on customer trends. Much more is in development stages and the future looks very exciting for promotional advantages afforded by e-commerce.

Shaffer: This could be useful for sale items, especially for customers that reorder items on a periodic basis. I doubt it will ever work for rental items. The demand for most rental items is difficult for the customer to project due to weather, project delays, etc. At our own rental stores, we tried to generate demand for pressure washers by cutting the price in half for a couple of months. Demand increased roughly 10 percent and total revenue decreased about 45 percent. A person or company will not rent an item if they don't need it for a job just because it is specially priced.

Shea: Today's rental systems have the ability to store, retrieve and analyze market trends, customer buying behavior, etc., and transfer the resulting data to e-mail marketing applications.

Veneris: Rental systems with built-in marketing features can identify customer trends today. For example, ALERT users code tickets that are for annual events and then aggressively use telemarketing to ask for repeat business. This simple form of identifying trends has been extremely effective - one customer has experienced a success rate of more than 80 percent in placing repeat orders. If your system has a report writer that allows you to easily export information, you can write a report, for example, that lists the e-mail address of every customer who rented a lawn aerator last year. Then the e-mail addresses can be exported to an e-mail program (such as Microsoft Outlook) and e-mail messages can be sent automatically to your customers.

4. It would be a tremendous asset to the rental business if rental companies could use the Web to match inventories to specific vendor Internet sites and get product literature, safety sheets and operating instructions on demand. Can this be done?

Bonestroo: Anything can be done if you have the cooperation of the vendors. Unfortunately, they would have to all standardize some sort of request method with file definitions to allow you to use EDI (electronic data interchange) to get this information from them without operator intervention. We have never not been able to get information from a vendor for our customers [when] both sides [were] willing to work together, and in this case there is no reason not to.

Joisher: Yes. It is a tremendous asset for the rental store to be able to match the store's inventory to specific vendor sites and get product literature, safety sheets and instructions on demand, as long as the rental store's Web site is continuously updated for changes in model numbers, hyper-links to vendor Web sites, etc.

Shaffer: Our system stores both safety and operating information on items internally. But being able to download parts descriptions and pricing from major manufacturers would replace their CD-ROM distributions.

Shea: Assuming your rental software can store manufacturers' data such as Web site addresses, model numbers, etc., you have the raw materials needed to request such information. At present, however, there is no standardization among interfaces (the ways in which various manufacturer sites process requests for information), so it would be difficult to automate a retrieval process. Your stored information would have to be reformatted for each different manufacturer's interface.

Veneris: Adding a link, for example, from your rental catalog listing of a Case backhoe to a Web page on the Case Web site that provides information on equipment specifications and/or operating instructions is a relatively easy task.

Problems occur, however, if the Case Webmaster changes the address of the page (which will eventually happen, since all Web sites are constantly under construction). When this happens, your link will be broken and customers using your site will get frustrated. Popular off-the-shelf Web-page authoring packages (such as Adobe PageMill and others) have a feature to check your links to make sure they are still working. If you use a Web site author to build your Web site for you, you should ask the author to provide a way to check the links.

5. Can the Web be used to spot potential credit problems with customers - or perhaps even link video records of transactions at the counter to a Web database, as a security check?

Bonestroo: The Web could be used for any of those services. Once you are online, you can get instant access to potential customers' credit records, driver's license data, anything you want if you know how to get it. There are hundreds of companies that do this type of information gathering for you if you don't want to do it yourself, for a very reasonable price. The Web wouldn't have to be used for video transactions, you can do that in-house with any standard PC. Because of the nature of the graphical quality of a picture (or video), the Web would slow this process down considerably unless you have a very high speed connection to your local Internet provider.

Joisher: As they pertain to spotting potential credit problems with customers, this can be done on the Web (and on the telephone). As regards linking video transactions at the counter to a Web database, one of our security business friends tells us that this may be illegal in most states under current law.

Shaffer: There are many sources on the Web to check out credit histories of both companies and individuals. To check out companies, it is a good source. Validation of cash customers requires a quantitative check such as a driver's license number. I can't imagine qualitative checks such as trying to compare pictures of thousands of "bad guys" prior to renting as being useful.

Veneris: Credit problems for current customers can be tracked easily through your rental software without the need for a Web-based credit check. For new customers, you can obtain credit reports (for a fee) via the Internet from credit-reporting agencies such as TRW and Dunn and Bradstreet.

6. Also along the lines of security, many emerging Internet technologies will require that a company make its main rental business-management server accessible to the Internet, where it could fall prey to hackers. Should rental companies be concerned about the security-of-data issue?

Bonestroo: Security of data is the single biggest concern rental stores should have about putting their primary server on the Internet. Even putting their data on a "data warehouse" server that has access to the Internet is not fail-safe if that server is on the same network as their primary server. People have to realize that if somebody wants access to their data they are probably going to get it unless they invest the money needed to have proper firewalls put into place. The sensitive financial information that the rental company wants to keep private should still be kept on a server that is not on the same network, if possible. What people don't realize about the Internet (or any network) is that data travels down what really can be thought of as a "big pipe (like a waterline)" and anyone can tap into that pipe and get access to it if they know how. Think of the old method of a party-line phone. Anyone that wanted to could "pick it up" and listen in on phone conversations. The Internet is no different than this if you don't have adequate security on your data.

Joisher: Rental companies should definitely be concerned about the security-of-data issue. Good Web-based rental store software would have several layers of security codes to prevent hackers from hacking. If, however, CIA computer security codes can be hacked into, nothing is totally safe from hackers. It is the responsibility of the owners/managers to be continuously vigilant on their normal security procedures.

Shaffer: Security has always been a priority at Point-of-Rental Systems. It is the primary reason that we send software updates to users on tape or CD-ROM via UPS instead of requiring a modem connection. Primary server computers that provide real-time data to the rental store(s) should not have an Internet connection.

Shea: I believe that exposing your main rental management computer to direct access on the Web is a bad idea. All of the information about your business resides on your computer, and any possibility of unwanted access by an outsider is of concern. At most, your rental management system should have indirect, outbound access only.

Veneris: Rental stores who put rental inventory data on their Web sites typically maintain only a "one-way" link - that is, data is collected from rental databases and subsequently inserted into a catalog on the Web site. Since no data is transmitted from the Web site to the rental data (other than forms such as reservation requests, etc.), security is not a concern. In some cases, a live, two-way connection can be used. Usually this connection is provided only to a select group of customers vs. open to the entire world of Internet users (for example, a party rental store might give caterers a password to log into a live set of data to write their own reservations). Whenever anyone is given access to live data on your rental system, sufficient firewall technology should be in place to guard against unwanted forays into sensitive areas closed to public use.

7. Some rental companies have developed their own software via Web sites to do business over the Web - "e-commerce." Can the systems available to rental companies today be enhanced to help them pursue this opportunity? (One example might be an enhancement that would permit inventory to be listed in a Web catalog.)

Bonestroo: Our database has been used for Internet sites for years. The developer of this database has done some very large Web sites for some huge companies over the years. In the process it has developed all of the tools needed whether the rental company wants to let their customer see inventory availability, do full e-commerce, or just see data sheets on their products.

Joisher: Yes.

Shaffer: Point-of-Rental Systems is currently in the process of offering Web site hosting to our users. They will have the option of displaying inventories, pricing and used rental items that are for sale.

Shea: Today you can transfer your inventory listing and other data (including rates if desired) from your rental software to your Web page to create a Web catalog.

Veneris: The software industry is spending billions of dollars developing software applications to allow companies to do business on the Web. Because of the tremendous cost of developing such systems, the best solution is to have an open system that allows data to be shared with a third-party e-commerce application. Also, rental companies need to decide whether increased profits will justify the cost of building a Web site capable of e-commerce. Because developing a Web site capable of e-commerce is very expensive, it makes sense to pool your resources with other rental companies. For instance, ALERT has partnered with a Web-authoring company that now provides Web site creation services specific to the rental industry. If you can share the costs of creating an e-commerce Web site specifically designed for rental, doing business on the Web can become a reality for your business.

8. Employees and sales personnel will need remote access to online resources, company databases and e-mail when they are away from the office. Can software upgrades help them do that?

Bonestroo: Software upgrades help this process, but we have never needed them for this process - our software was designed to allow this from the beginning. Our customers have always had the ability to access their system remotely from any home PC or from any laptop. All that was ever needed was a terminal emulation package that we supply that makes it as easy as clicking on our icon to dial into their main server from anywhere, including a service truck or sitting by the pool.

Joisher: Yes.

Shaffer: This can be accomplished without Internet access by simply using dial-up telephone lines.

Shea: These capabilities are available now with today's rental software.

Veneris: Traditional dial-up software using a modem has been the standard remote-access solution for a long time, and often still works well for today's e-mail, database and network applications. Also, flexible wireless communication options are becoming more practical for smaller businesses these days. For multi-location businesses and mobile employees who have Internet access, a new Internet-based network connection called a VPN (Virtual Private Network) allows you to set up a private, secure link between two computers or locations using a standard Internet connection. Line speed and the reliability of the connection are still a concern with this Internet-based solution, however. As Internet connections become more stable and line speeds increase, VPNs will become a more widespread and viable option.

9. Many companies are using the Web to set up training for their employees. What part do you think Web-based training capabilities will play in training rental employees and updating their computer skills in the future?

Bonestroo: The Web is an ideal way to train employees as it allows you to create a central training system and have it delivered to the people that need it when and where they want. By using training systems, employees have always been able to pick up computer skills needed when they go "live" on the system - before the customer is ever involved.

Joisher: It depends entirely on the size of the rental business. Smaller stores can maintain their training capabilities on their in-store computer. Larger stores with multiple locations would be good candidates for maintaining Web-based training capabilities.

Shaffer: This depends on the size of the rental company. For a national chain, I would think it would be extremely useful. For a one- or two-store operation, in-store training would be best.

Shea: I believe that Web-based training programs authored by manufacturers or suppliers will play an increasing role in training rental employees. The Web has little application in internal training, except for chains with widely distributed store sites. For these rental businesses, the Web may offer a way to train consistently across broad geographies, and do it more cost effectively than with face-to-face sessions.

Veneris: Computer-based training saves time and money, allowing those being trained to learn at their own pace, brush up whenever necessary, train when they have time, and save management many hours of teaching new staff the computer system. Customers can navigate to the ALERT Web site and download the EasyPro Discovery Disk, which includes an interactive tutorial of EasyPro's counter system. Also, since many of our CBT programs have a large file size and are thus impractical to download over the Internet, we provide our ALERT EasyPro Training Library (a suite of tutorials that cover basic counter operations and advanced modules of our software) on CD through an annual subscription service.

10. Expansion is always a concern in rental operations. As we add additional locations and additions to our existing buildings and more terminals, better communications systems and wiring are required. How will your software updates deal with this - how easy will it be to adapt to changing environments?

Bonestroo: Our software has always adapted well to change and was designed to expand with you. Our first customer had three locations and wanted them all on a central file server with dedicated phone lines - and this was done and has been running for them since 1989. As wiring standards have improved and communication speeds increased, our customers have been able to either keep using what they originally invested in, or to upgrade to the newer faster technology as they chose to. Our software has never had to change to adapt to this, as it was designed to handle this situation from the beginning.

Joisher: Expansion of rental operations always is a complement to the computerization of rental store operations. There is no problem now, and there will be none in the future expanding the capability of having additional locations, and additions of buildings and terminals.

Shea: Solutions software already supports many different ways to communicate between branch locations: dial-up, dedicated lines, frame relay, Internet. The ability to handle large numbers of terminals and store locations is a function of the hardware and environment - a single UNIX system, for example, can support hundreds of terminals and locations while leaving ample room for expansion.

Veneris: As rental stores take more advantage of personal productivity software such as e-mail, word processing, spreadsheets, and Internet-based tools, it is becoming increasingly more important that workstations be designed to fit the needs of each particular user. For instance, back-office workers may need Windows-based PCs, whereas at the front counter, you might only need a terminal running your rental software application. Hybrid networks can now "mix and match" PCs and terminal-based workstations to allow you to provide access to the right software tools for every employee.

11. Can upgrades and/or patches for your product be downloaded from the Internet?

Bonestroo: Not at this time. We are working on the ability for our customers to do this and expect it to be done and available for use by fourth quarter 1999.

Joisher: Yes, this has been done for over a year now.

Shaffer: No. For security reasons all of our updates are distributed via UPS either on CD-ROM or tape.

Shea: Yes, Solutions has been doing this for some time, whenever appropriate.

Veneris: Although we do provide customers with Web-based support for ALERT EasyPro, including a library of FAQs (frequently asked questions) and a searchable Knowledge Base, currently we do not provide upgrades and/or patches over the Web. Because ALERT EasyPro can be run on a number of operating systems, we find that loading upgrades and patches onto customers' machines is most safely done by our programming staff via a direct-modem connection.

12. Can you foresee the use of the Internet in multiple- and single-store communications instead of dedicated and costly alternatives?

Bonestroo: Yes, but the issues this creates are twofold: security concerns and speed. Security is a big issue in that now your server is "on the Web" and that creates new problems with making sure nobody can get access to your business data. Speed is the other issue - rental stores need instant (sub-second) response from their systems and as anyone knows who uses the Internet, you cannot expect that kind of response at all times because of unknown network traffic spikes. Waiting for pages to down-load from a Web site is one thing, but waiting for data to be displayed on your screen when you have a customer in front of you can impact your customer service and, in the end, hurt your business. We are working diligently to combat these two issues and are in the beta test phase now with a couple of our clients that have sites in multiple states.

Joisher: Yes. This multiple- and single-store communication already exists through the Internet.

Shaffer: Foresee is the operative word. Presently, the Web is just too unstable to consider it for real-time, mission-critical computer applications, although it is fine for downloading information in batches after hours. Even if stability were not a problem, the only way it would be cost effective compared to dial-up and dedicated lines for communications between primary and satellite stores would be if they were very far (hundreds of miles) apart. The costs associated with the T1 lines (needed for sufficient data transmission speed) and the Internet Service Provider

(ISP) would be far greater than using the local telephone companies lines for stores close together. Plus, you'd have at least one other company (the ISP) to argue with when the system goes down!

Shea: Solutions has been using the Internet for real-time communication between branch locations for some time - see Question 10. I see no practical use in a single-store situation.

Veneris: See Question 8.