NES Rentals is in the business of renting aerial lifts and related high-reach equipment to companies in the commercial and industrial construction businesses. The company is a privately held midsize company with revenues of about $400 million, 1,200 employees and 75 branches operating in the Gulf Coast, South, Southeast, Midwest and the Northeast. NES Rentals buys equipment from OEMs and sells its used equipment at auction every four to five years in order to keep its equipment fresh. The company maintains its own equipment at the branches or dispatches mechanics to job sites to attend to breakdowns.
Ananda Rakhit has been CIO at NES Rentals for more than nine years, after having served as an IT leader at ADP and United Airlines, among other companies. In this interview with CIO Insight contributor Peter High, he shares what he’s learned across his long tenure in IT, his focus on predictive analytics and managing a large, virtual workforce.
CIO Insight: What are some examples of strategic imperatives you are driving for the foreseeable future?
Ananda Rakhit: Pricing, equipment allocation, predictive analytics for maintenance and security of our systems are strategic initiatives for NES IT. After two years of painstaking work, the pricing system has now entered a continuous improvement phase.
The ecosystem for price setting at NES is extensive. A sophisticated analytical engine based on statistical and operations research techniques is at the heart of the system. Past company data including seasonality and industry forecasts are combined with latest data gathered from the field. Utilization data is collected daily by scanning bar codes on each piece of equipment at delivery and pickup. Price sensitivity data is gathered daily via inputs from field sales via a smartphone app. A forecasting model and an optimization model generate prices by branch and by equipment category which are delivered to sales via desktops and iPads. Every morning a newly calculated set of rates based on the latest information shows up in a pricing app to guide sales.
Equipment allocation is another strategic problem we are working on to go beyond spreadsheet analysis. In a nutshell, this problem entails buying the right mix of equipment, allocating them to the branches where it will deliver most to the bottom line, moving them from one branch to another as demand patterns change and identifying the equipment to send to auction. While some modules, such as demand forecasts are common, the mathematical model is more complex than pricing. A decision support system can allow the user to carry out repeated runs by changing input parameters.
We are in the early stages of predictive analytics for maintenance. We are looking at data on mean time between failures of various parts and exploring how we can gather engine performance data via GPS devices. We hope to build a statistical model that could enable our mechanics to make proactive repairs at customer sites before the equipment breaks and customers have to call us. Customer service benefits are obvious but, in addition, managing repairs on a systematic basis instead on-demand basis, would save maintenance dollars.
We have put a large focus to ensure our systems are secure from external threats as well as we have adequate disaster recovery solutions in place. We have upgraded our backup and data retention systems and procedures and are now working towards rapidly recovering our business-critical systems from failure to minimize business impact. We are also developing clear incident response procedures and shielding our systems from potential attacks and breaches which include implementation of secure coding practices
CIO Insight: You have a large virtual workforce. What special methods or techniques do you use to manage their work?
Rakhit: We manage the workforce by holding them accountable on the delivery of the initiatives. Project management is key at every level and reviews are conducted regularly to ensure customer expectations and delivery dates are being met. The team’s success is measured by reactions from our internal customers about IT solutions and service. I personally have weekly staff meetings with my direct reports, quarterly face-to-face meetings with my direct reports plus other IT leaders, and monthly all-hands conference calls to track overall progress, set priorities and motivate. The other key in virtual management is recruiting self-starters and organize the team so that those who are not self-motivated are eased out of the organization. Because our work is knowledge work and not routine tasks, deploying bots and other tools to track work hours and presence, I believe, would be counter-productive.
CIO Insight: You have developed an ecosystem of partners to help you deliver all that you do. How do you manage this ecosystem to ensure you are deriving the maximum value from each vendor partner?
Rakhit: We have partners that host our data centers, provide 24/7 monitoring of our systems and provide cloud-based phone service, to name a few. The best place to ensure we are deriving maximum value is at the time of negotiating the contracts. We spend considerable effort on this activity at the beginning and at renewal. We have our designated IT experts who monitor the specific vendors continuously for their performance. We have a robust escalation mechanism and culture where issues are surfaced and fact-based action plans to address them are put in place as quickly as possible without bureaucratic stalls and fear of undue repercussions both internally and with our partners.
CIO Insight: You have spoken about the need to hire people with hard skills, and then teach them soft skills. Please explain.
Rakhit: Of course someone with both hard and soft skills is the right recruit, however, when confronted with a choice, IT needs to hire staff with hard skills because they are difficult, expensive and may be impossible to teach at work. Having said that, it is extremely important to screen for motivation and attitude so skills essential for teamwork and working with customers can be taught, accepted and retained with enthusiasm.
CIO Insight: What trends particularly excite you as you look to the future?
Rakhit: Internet of things excites me the most among the trends. This will provide us insights to systems and problems we never had before in addition to systems integration possibilities. Apple’s Airplay is a perfect early example in the home entertainment space. The data collected should open up exciting new possibilities of analyses leading to more precise operational and business decisions and control. The second trend is mining of data generated in the social media. What could be perceived as useless chatter may enhance, via data mining and analysis, the quality of forecasts of the state of future business. The third area I am excited about is the evolution of e-commerce to more three-dimensional experiences, starting with say, the b-c use case of people trying on clothes virtually. Overall, the exciting changes have entered an exponential phase—business and IT that capitalize on them will be the most successful.
Peter High is President of Metis Strategy, a business and IT advisory firm. His latest book, Implementing World Class IT Strategy, has just been released by Wiley Press/Jossey-Bass. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs. Peter moderates the Forum on World Class IT podcast series. Follow him on Twitter @WorldClassIT.