The Silent Profit Killer: Data Silos in Your Construction Equipment Rental Business

It’s 7:00 am, and you receive an urgent order for a concrete mixer! You check your spreadsheets for its availability at Yard 4, send an approval message to the customer, and issue the invoice. As your driver arrives at the destination, you’re informed that the mixer is not there.

You pick up the phone and quickly contact Hans, the construction manager on-site.

“It’s not here, Tom. It was sent for maintenance the day before yesterday,” replies Hans. Hans marked it on their spreadsheet, but the updated records never reached you.

Now the driver is scrambling, the customer is furious, and your team is asking around to locate another unit at the last minute. You end up sub-renting from a competitor to save face, compromising your margins.

Later that week, you review all the records and discover that the mixer was due for maintenance and had two service issues reported. No one checked the records, and it had been sent for four additional jobs since then. All of this occurred because the on-ground, maintenance, and rental teams were working in silos. Each had its own records, and none collaborated to monitor the condition of their equipment.

Do you face similar experiences? Do you find yourself at a crossroads when rental requests are pouring in, but you are uncertain about the location and condition of your equipment? 

Let’s help you understand how data silos occur and what strategies you can adopt to overcome the resulting challenges. 

Why do data silos happen in a construction rental business? 

Data silos are fragmented records of information that do not communicate with one another. This means each team has its own set of records that do not align with the overall records of a construction company. For example, the maintenance records are updated periodically but stored in separate sheets that never reach the other teams. This lack of collaboration in creating comprehensive records exacerbates challenges in construction rentals.

Here’s what data silos look like in various teams at a construction rental business and their impact: 

These are all common scenarios that overshadow an organization’s operational efficiency and make construction managers think about how they can better manage their construction rental equipment. 

Reasons for the occurrence of data silos

Reason #1: Department disconnect

Disconnected departments and overreliance on hundreds of disjoint spreadsheets disrupt daily construction operations. Teams update their records with little visibility into what other departments are doing. Your rental coordinator approves rental equipment, while your maintenance team sends the same equipment for maintenance. In the meantime, the inspection teams update their records, and those updates never reach the construction manager. 

Such disruptions eventually turn into massive chaos as no one knows what direction your rental business is taking. Sometimes, departments can become protective of their data, viewing it as a source of power or competitive advantage, referred to as “Turf war.” The “stay out of my sandbox” mentality hinders data sharing and reinforces silos.

Impact: Lost customers as they are misguided about equipment availability, and compromised profit margins as you seek expensive alternatives for face-saving. 

Scenario: A backhoe is marked “available” in your rental software but is actually in the shop. The rental desk books it out to a contractor. You only find out when the driver arrives at the yard.

• Lost revenue: You struggle to sub-rent a replacement at $400/day while charging your client $250/day.
• Cost per incident: $150 loss/day
• Annualized (if this happens 2x/month): 2 × 12 × $150 = $3,600/year

The most significant outcome of this misalignment is the loss of customer trust and the eventual fear of them churning. 

Reason #2: Tool fragmentation

When teams use different tools to record their rental items, the chances of inaccurate information increase. For example, the rental coordinator might use Google Calendar to manage the bookings and create an internal reservation system, while the maintenance team uses paper logs to record what goes out for maintenance and when. There can be a contradiction between their records, as items under maintenance might be rented out to customers. 

A forklift might appear available in the rental coordinator’s system while it’s actually out for inspection. This means the coordinator needs to check three different sets of records to be sure whether the equipment in question is available. These disjoint sets of data do not correctly reflect the state of equipment and its availability status, causing organization-wide confusion. 

Not investing in a single source of truth for data consolidation further exacerbates tool fragmentation. Without a system, organizations are not likely to integrate with other systems, even if they are intra-organizational. This limits the scope of data exchange while teams continue using their legacy systems for formatting and structuring their own data, reinforcing data fragmentation and silos.  

Impact: There is no one system that any team can rely on and benefit from. Over time, it becomes even more challenging to consolidate this data, and departments keep reinforcing their workflows for data entry that disrupts efficient handling of construction equipment rentals.

Scenario: Maintenance logs are tracked on paper. A skid steer goes out without its 250-hour service. It breaks down on-site, leading to an urgent service call and tow-back.

• Repair cost: $1,200
• Lost rental days (4 days @ $220/day): $880
• Labor + towing: $400
• Total cost: $2,480

If this happens just once per quarter, that’s $9,920/year lost from poor visibility between rental and maintenance teams. 

Reason #3: Organizational culture 

Several construction companies do not have a culture of investing in data-driven solutions to efficiently manage construction rental equipment. They rely on systems that involve manual handling of equipment procurement, rental orders, invoices, billing, and internal operations. For such organizations, automating their rental processes is a difficult feat. 

Construction managers might also be reluctant to break free from their traditional practices of managing on-site equipment. Over time, they become highly comfortable with their existing practices, so adopting new systems seems difficult. 

Additionally, lack of awareness about the available tools in the market and the sheer concept of data silos can also contribute to their resistance to change. Construction managers might not fully know how simple automation can turn around their construction operations. 

Impact: Poor communication between on-site teams managing rentals and office-based teams handling procurement and finance can lead to delays in off-renting or inaccurate cost tracking due to data silos. 

Scenario: A rental coordinator extends usage of a piece of heavy equipment by two days but does not report it, or just updates their manual records, and those records are not forwarded to other departments. The invoice is never updated.

• Daily rental rate: $350
• Missed billing: 2 × $350 = $700

Across even 10 instances a year, that’s $7,000 in pure revenue leakage.

Reason #4: Project-centric approach

Several construction companies are likely to face the constant occurrence of data silos due to the nature of their operations. Construction companies following a project-based approach may not be accurately recording how and where their equipment is rented out to. These projects may act as self-automonous units and they have different contract terms and conditions. This project information might be stored on disparate systems, making it difficult to get a consolidated overview of all the equipment rented out to projects.

Likewise, if your sales team negotiates different rental agreements and rental rates for different clients, manually recording this information can add to inconsistencies in billing and revenue data. Your rental coordinator might use a CRM to record and manage rental requests while the operations team might dispatch the equipment using a different software and only update that, adding to data silos and visibility issues across departments. 

Due to fragmented data, asset utilization, performance, and associated revenue generation reports are also impacted. Construction managers cannot get a clear understanding of which heavy equipment is in higher demand compared to others, so that it can be prioritized for maintenance and service. 

Result: Lack of visibility into the organizational workflows and misreported revenue generation impact profitability and create communication issues. 

Scenario: Over-purchasing due to project mismanagement

Your west yard buys another excavator because they think they’re short. Turns out three units were sitting idle at your north yard — no one checked.

• Cost of new unit: $5,500
• Storage and insurance per year: ~$600
• Total annual loss (conservatively): $6,100+
  

This is common when assets for each project are tracked separately, leading to bloated inventory and poor ROI.

How do data silos impact your ROI?

Research found in 2020 that inaccurate and fragmented construction data building up as a result of data silos led to $1.8 trillion worth of global losses. Data silos not only added to miscommunication and productivity delays but also increased costs and reduced the overall ROI. 

Lack of cross-departmental communication and poor asset utilization are two main outcomes of data silos. Here’s how they impact your overall productivity:

1. Loss of revenue

Lack of departmental communication resulting from data silos translates into loss of revenue sooner than you can expect. When records are not forwarded to other departments, it can create billing issues and impact the revenue. For instance, a trailer was due for return, however, the customer did not return it within the stipulated time frame. They misreported the extra asset usage and the trailer went unbilled, leading to revenue loss. 

For a construction contract that generates $1 billion in revenue, the losses resulting from bad data could be as high as $165 million, including up to $7.1 million in avoidable rework. 60% of the respondents in this research reported that quality data enhances data management and enables them to conduct deeper analysis; data centralization plays a massive role in this. 

Superior Construction Services is a prime example of a company suffering from manual processes. The company used to manage its heavy rental equipment using fragmented and cluttered spreadsheets. It had no central system to get a clear, vivid picture of its inventory and asset usage, hindering project management. Using EZRentOut, a leading rental asset management software, Superior Construction Services saved approximately $200 million and managed more than 300 construction projects seamlessly without losing access to any of its rental equipment. 

2. Operational inefficiencies

Duplicate data and manual workflows are the two main results of data silos. When entries are not checked and accounted for human error, duplicate entries become almost unavoidable. For instance, if there are two construction managers, how will they ensure that both create records that do not coincide. Imagine the amount of time and effort they spend fixing duplicate entries. 

Manual entries also mean a higher chance of human error. Similarly, prices may not be quoted correctly if a price change or a change in pricing strategies is not reflected in the rental coordinator’s records. Misquoting customers and changing invoices after the bookings can significantly cost your construction business. 

3. Ruined customer experience

How would you feel when you receive calls from unsatisfied and angry customers who have not received their due equipment on time? Your rental business can suffer significantly if someone from your team double books your equipment and does not update the rental schedule. 

Inconsistent and fragmented information makes it difficult for departments to be on the same page. For instance, a customer calls your sales team to inquire about an ongoing rental, but the representative is clueless about the order or does not have consolidated records to refer to for updates. This way, a task as simple as providing a quote for an order can become challenging and leave the sales team embarrassed on calls and completely clueless about the next steps. Delayed responses and quotes also infuriate the customers who are looking for prompt replies. 

In some cases, various sales representatives or rental coordinators contact employees for order details. For example, finance may reach out to them for billing, while sales may confirm the order, and a customer success representative may inquire whether they received it. Combined, all these instances damage the customer experience and ultimately lead to customer churn. 

4. Lack of visibility into fleet utilization

Data silos impact an organization’s ability to track assets efficiently and maximize their utilization. Construction companies rely heavily on how efficiently their fleet is being utilized to meet their rental goals and inability to assess their utilization impacts the use of assets. For instance, a piece of equipment might be underutilized while a similar unit is overutilized and repeatedly sent for rentals. One of the reasons for this could be the inability to assess how frequently it has been allocated for use. 

Similarly, when the equipment is distributed across various locations and each site maintains its own set of records that are not consolidated, you cannot accurately assess the machinery count in each fleet. In one location, machinery may be sitting idly, while another location might lack sufficient units for work. This results in underutilization of assets, preventing the machinery from reaching its full potential.

The lack of visibility into fleet data results in overpurchasing because the construction manager does not have accurate information to make informed decisions regarding procurement. Data silos in asset tracking lead to equipment inefficiencies, including lost time spent searching for assets, lower utilization rates, potential equipment loss (in the worst instances of theft or misplacement), and missed rental revenue.

5. Flawed analysis and decision-making

Data fragmentation not only increases your costs but also hinders the process of data analysis. Information is spread across multiple systems, meaning all that data must first be integrated into a single platform for a consolidated analysis. 

However, when teams operate in silos, they usually create their reports that are not shared across departments, impacting their visibility. The chances of reports conflicting with each other also increase as different data repositories do not match with each other. So, the other stakeholders will not be able to know what reports and sources to rely on for data analysis and reporting. Different sources saying different things about one piece of information would eventually impact the quality of their decisions. 

Data silos create informational gaps that can create misunderstandings and delay the daily operations. Without comprehensive data, stakeholders find it difficult to get answers to basic questions like: Which equipment types are most profitable? What is our actual project margin after maintenance costs? How is each branch performing? With every branch having its own set of data, anomalies become inevitable. 

Leuder Construction, a construction rental company, used papers and tablets for equipment tracking and order management. This created data silos that hindered their ability to find crucial information and create insightful reports. Moving to a consolidated rental asset management software helped the company not only deal with these data silos but also reduce costs and time on projects exceeding $50 million.

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Steps to breaking data silos

Data silos are entirely impossible to break! All you need to do is identify the gaps before they escalate into major red flags and take corrective actions for the growth of your construction rental company. 

Here are some steps you can follow:

1. Identify the problem

The first step to breaking data silos is to identify where and how deeply they exist and impact operations. Rental companies often use a mix of software and spreadsheets, but they are usually scattered and department-focused. 

Start with a cross-department audit to see what departments are suffering from highly impactful data silos. This process should start with asking the departmental leads about:

• What software or tools do you currently use?
• Where do you log information (e.g., inventory status, service tickets, rental agreements)?
• Who else has access to that information?
• How often do you have to re-enter the same data into different systems?

This will help you get started with the auditing process and identify the bottlenecks with due diligence. What factors should you consider when identifying data silos? Look for:

• Multiple spreadsheets tracking the same data (e.g., one for rental status, another for maintenance logs)
• Paper-based processes for check-ins, inspections, or work orders
• Rental requests sent via email or text with no central tracking system
• Billing is happening in a different tool (e.g., QuickBooks) without syncing rental duration or usage data
• Manual reconciliation between departments at the end of each week or month

Following these simple steps will help you identify whether all the equipment is being rightly recorded at the time of checkout/checkins and also manage the construction projects better. 

2. Centralize your asset data

The next step is to invest in a quality construction rental equipment software to consolidate all information pertaining to equipment usage, customer, order number, and quantity available into one place. Give visibility to all the relevant departments in your organization to this platform so they treat it as a single source of truth. When the data is easily accessible, various construction teams can easily check the availability of equipment, their condition, and quantity to make the rental decisions accordingly. 

Centralization of data helps optimize your construction workflows. The maintenance logs and service requests are all logged in, so you can stay up-to-date with any upcoming inspections, equipment reservations, or even check-ins. You can even enable alerts for when the equipment is due for check-in or maintenance. This helps prevent overuse of your construction equipment and ensures that the equipment is checked in at the right time. 

3. Integrate your platform 

Getting the financials right is the key to streamlining your construction activities and workflows. Integrating your rental asset management software with other platforms like QuickBooks, Xero, and Avalara will make it simpler for you to handle the accounting of your orders. You can stay on top of your financial activities and reflect actual numbers. 

These integrations automatically handle billing and invoicing. For instance, every time you close a rental deal, the bill is automatically generated in QuickBooks, saving you from the hassle of creating manual invoices. This way, you have a clearer picture of revenue linked with each order as well and you avoid any discrepancies in the order and its invoice. 

If you have an online rental store as well, you can 

• Firstly, leverage your rental software to create a website with an in-built rental website builder. You can easily customize your construction website, SEO-optimize it, and use Google Analytics to assess how well it is performing. 
• Secondly, integrate with WordPress and Shopify through APIs if you are already familiar with those platforms. 

These self-service customer portals or online rental stores will make it easier for your clients to check equipment availability, quantity, and location. A lack of customer-centric features (like a unified portal) will lead to frustration, abandoned sales, and poor retention. 

Integrating with different platforms improves the scope of your operations and expands their capabilities to optimize operations in the best possible way. So, you are not constrained to specific functionalities of the platform you use, but a whole new world of possibilities opens up. Breaking data siloes by increasing the scope of your data management will help you gain customer loyalty and encourage repeat business. 

4. Invest in fleet management 

In construction, the bread and butter of your rental business is truly your heavy rental equipment. With information in silos, the chances of equipment data not being utilized to its fullest capacity increase and may lead to unused equipment. Equipment that’s idling will only cost you. Idle equipment increases maintenance costs, which can amount to 10-30% of the entire project’s costs. 

At the same time, equipment with excessive idle hours depreciates faster, potentially reducing its resale value by significant amounts. For instance, an idling vehicle could be valued $30,000 less if it has 10,000 hours on the meter compared to a similar vehicle with 25% less idling time.

To address such scenarios, companies invest in telematics to optimize their fleet management and ensure data from different systems can be utilized. Telematics involves the use of GPS tracking facilities, sensors, and trackers to monitor the movement and performance of heavy equipment. It feeds live data into your systems so you stay abreast with the latest changes in the functionality of your equipment or vehicle. 

You can even integrate your rental asset management software with platforms like Trackunit to provide a live map of all equipment, utilization stats, and maintenance alerts in one place. The benefits include higher fleet utilization, automatic recording of actual usage for billing, quicker recovery of lost or stolen assets (through GPS tracking), and improved project management for customers. Telematics can help you:

• Reduce the time required to search for a piece of equipment
• Prevent theft and instances of lost items
• Use predictive analytics to forecast future usage patterns
• Optimize the use of your current fleet and avoid over-purchasing expensive rentals
• Reduce downtime during peak construction periods
• Create maintenance logs easily and track the usage 

For instance, United Rentals has an advanced telematics solution to track equipment on job sites or on-the-go. Customers can gain full control over their fleet by having complete visibility into each movement. Telematics data provides insights into equipment health, allowing for timely maintenance and reducing unexpected breakdowns. 

Telematics not only helps you optimize your fleet but also allows you to monetize every dollar spent on it while enhancing its use. 

5. Standardize workflows 

Standardized organizational practices are actually the key to breaking data silos; technology alone cannot help. To ensure that the practices followed across departments are impactful, implement policies that bring the organization on the whole page. How do you make sure of that? Simple, just keep your broader organizational goal in mind and encourage all departments to regularly share data. 

For instance, hold weekly meetings so the leadership and managers can review the updates throughout the week. Measure each team’s performance based on how well they record the data. Encourage them to enter information into the system every time they land a rental deal and process it. You can combine these practices with the rental software you use and train your staff to use it. 

This way, you will have access to a consolidated dashboard that you can use to gain insights into your everyday operations and analyze how well the equipment is being utilized. You can even set up alerts so that every deal processed is recorded in the system. 

Turning construction chaos into opportunities

Managing construction rentals is not an easy task, especially when you are dealing with data silos. Whether you are a mid-sized company or a large enterprise, data silos will hinder your growth and impact your business in unimaginable ways. Therefore, developing a culture of transparency across your organization is the main key to breaking down the data silos. 

Using rental asset management software will only help you turn fragmented data into actionable insights. Gaining better visibility into your job sites and key operations will empower you to enhance your service and achieve sustainable growth. 

So, break this chain of inefficiencies today and trust EZRentOut in turning your construction data into a tool that drives value. Get a free trial before its too late!