Equipment as a Service

How EaaS is changing the construction industry

How 'Equipment as a Service' is changing the construction industry

What is 'Equipment as a Service'?

Equipment as a Service (EaaS) involves accessing equipment on a subscription basis and making periodic payments – rather than buying and owning it outright. EaaS is changing the way leading construction companies operate their businesses, as they move towards a more sustainable way of working and attempt to reduce their consumption.

The construction industry is inherently a large user of natural resources. When equipment is rented as a service from a provider who fosters a sustainable supply chain and adheres to circular economy principles (like repairability, recyclability and responsible sourcing), construction companies are helping contribute to a more sustainable industry.

Why the change?

There are many reasons why there's been a paradigm shift from buying and owning construction equipment to acquiring it as part of a subscription. However, uncertainty in the market and the increased need for adopting lean management processes is definitely a key factor. Companies have had to change their perspectives and adopt new, more flexible business processes to stay competitive.

EaaS is widely accepted as a way of mitigating cost – an issue that has always been important but has become even more so in recent years. After all, increased costs cut into profit margins. When construction companies switch to an EaaS model, they’re able to avoid initial purchase costs and keep that money in the business. Throughout the equipment's life cycle, less money and time are spent on maintenance and repairs because these are managed by the service provider.

The same principle applies when it comes to replacing lost or stolen tools. Replacements for stolen items are usually covered by the service agreement at no added cost to the user.

Additionally, in a labour market where skilled labour can be very selective about employers, people tend to want to work for companies investing in and using the latest technology - this becomes an element of being an attractive employer. Switching to EaaS can help employers recruit more workers too, as skilled labourers tend to gravitate towards companies that are investing and using the latest technology.

Enhancing EaaS with digital technology

Enhancing 'Equipment as a Service' with digital technology

It’s no secret that the construction industry is lacking when it comes to the adoption of new technology. In fact, the McKinsey Global Institute’s Industry Digitisation Index rated construction as one of the least digitised sectors in the world.

Today, new technology allows autonomous platforms of equipment to silently collect data during their everyday use. This streams back to the office to provide valuable information for better business decision making.

By using such data, processes that once involved jobsite workers can now be handled by office personnel or the EaaS provider - meaning skilled labourers can focus on what they do best. Some data can even be used directly by the EaaS provider to create a more efficient service.

EaaS & your company

In times of uncertainty, it can help to shift your perspective and establish new business processes that help you to be lean and flexible - like using Equipment as a Service.

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