In discussing the choice between using a rental software vendor versus an ERP vendor with rental capability, we usually only focus on mid-market organizations ($5 million in revenue and up) as smaller companies generally aren’t using an Enterprise Resource Planning (ERP) solution anyway.
Our company has been involved in the mid-market since the early 1990s and in rentals since 2002. When a company decides to enter a new market, they do so with both optimism about what could go right and some trepidation about how to match up with existing competitors.
In our case, we had significant experience working with financial reporting, oilfield service, inventory management, and job cost. Many of our clients also had presences in manufacturing and equipment service. Initially, when we started with rentals, we wondered about how we would fare against competitors whose entire business model was oriented around providing equipment rental software.
The answer turned out to be different than we expected. Yes, we had to work hard to close the functionality gap and could never claim to have the hundreds of clients or decades of experience others brought to the table. But we had other significant advantages that have brought many large and mid-size projects our way.
You need more than just a rental specialist
The first point is the trend towards consolidation and change in customer expectations. Rental companies are often involved in more than equipment rental. They may be product distributers, providers of managed services, product retailers, or manufacturers, etc. Customers now expect a broader range of services and companies are looking for additional sales growth, which often means branching out into new and sometimes unrelated areas.
Over the years we gained more and more customers because we were not just rental specialists. We could deal with almost any area covered by the comprehensive functionality suites offered in an ERP system. When your company decides to start manufacturing key products, can your rental vendor or partner deal with those complex requirements?
An ERP vendor ensures your core system technology is always up to date
The second and most important point is that ERP vendors, such as Microsoft, always keep their technology up to date. This ensures customers can choose to have the latest technology for their business including mobile smartphone and tablet access, business intelligence, database integration, automatic upgrades through SaaS (Software as a Service) cloud options, and the list goes on.
A few years ago we used a picture of a pig wearing lipstick in a publication ad. The idea we were emphasizing was that some companies wrap a few shiny layers around a legacy system to try to make it appear modern. In contrast, choosing a vendor like Microsoft ensures the core system and technology are always up to date. An example of this is the semi-annual automatic upgrades users get from Microsoft for Dynamics 365 Business Central, along with updates of deployed equipment rental apps.
To learn more about how an ERP vendor and partner with rental functionality can add flexibility and expertise to your organization, please contact us here.
*Should you re-implement your ERP system on the latest version instead of upgrading? This decision depends on your system and data priorities. Read our previous blog here to learn which choice would be best for your business.