Telematics solutions have come a long way since the beginning days of simple vehicle tracking. With a multitude of capabilities, such as remote vehicle diagnostics and routing/driver productivity tools, finding the right solution can be a daunting task.
Telematics is more than simply locating vehicles via a “dot on a map” or employing GPS routing capabilities.
There are many companies that sell devices to track GPS location; however, this only provides limited information for fleet managers.
A complete wireless fleet management system combine’s exact GPS location tracking with precise diagnostic monitoring to give fleets a complete and accurate picture of vehicle operations.
Determining telematics needs, fleet benefits, and whether a return on investment (ROI) will be realized can be a tough job.
Determining Telematics Needs
Fleets should utilize telematics technologies specific to their business needs. With the abundance of options available to fleets today, the number one priority is determining which telematics solution best fits a fleet’s needs.
Clearly defining overall goals and deliverables an organization is seeking should precede any telematics products review. Sit down for a consultation with your fleet management company. Together, decide exactly what you want to get out of the telematics solution and how it will affect your core competencies.
Recommended telematics technology can vary dramatically, depending on fleet type and goals.
For service response vehicles, real-time vehicle tracking is useful for dispatch purposes, as it is for fleets where security is paramount – for example, carrying or delivering valuable goods. The data available from vehicle tracking can be useful for any fleet type in helping manage and make better decisions, from replacement planning to fuel fraud monitoring to maintenance management.
Before companies review technologies such as vehicle tracking, GPS navigation, or other new tools emerging in the market, Lynx Telematics partner, Geotab – a GPS satellite-based fleet and resource management systems company – suggests each company look at four operational areas for costs and to develop key performance indicators.
According to Colin Sutherland, VP of sales at Geotab, the four indicators are:
■ Risk and driver safety.
■ Fleet operational costs.
■ Resource cost of productivity.
■ Regulatory compliance.
Perhaps the most overlooked and important consideration is how the company uses this new data to change behavior. Companies with the most success have either hired additional resources or are leveraging resources of their fleet leasing provider, assuming the provider delivers telematics information integrated with their existing products and services.
Most companies use technology that contains a GPS tracking component. When additional detail regarding vehicle use and performance is desired, diagnostics capabilities that interface between the telematics device and vehicle’s onboard computer are required.
Diagnostics capabilities include vehicle powertrain performance information, seatbelt utilization, airbag deployment, fuel level monitoring, etc.
The application of diagnostics all depends on what you’re trying to achieve and what type of vehicles you’re operating.
Businesses that use a fully integrated vehicle tracking, navigation, and analytics solution are typically first to experience dramatic returns on their solution investment, according to GE Capital Fleet Services. An integrated, enterprise-wide approach to telematics use will enable a business to apply quality process disciplines to mobile operations – much like a manufacturing organization applies to an assembly line, said Doug Peters, telematics analytics leader, GE Capital Fleet Services.
“There are many ways to use telematics technologies to improve a business. Think about financial and operating performance requirements and consider integrating telematics into as many aspects of your fleet management program as possible. Effective use of the right solution helps fleet managers improve vehicle maintenance and compliance and helps operations managers transform driver productivity through optimized routing and scheduling,” said Peters.
“The most important aspect of an effective solution is the ability to convert large amounts of vehicle-generated telematics data into relevant, actionable business insight. GPS information – when combined with other operating or market data – provides meaningful insight regarding mobile operations that helps businesses identify where specific process improvements can quickly increase employee productivity, improve customer service, and enhance profitability,” he added.
Reaping the Benefits of Telematics
According to Peters, a comprehensive approach to integrated mobile resource management is increasingly valuable in today’s environment. “Leveraging technology solutions such as telematics provide companies the ability to monitor, manage, and optimize operations of their mobile resource pool.”
Potential benefits of telematics use in fleet include:
■ Lower accident rates.
■ Decreased occurrence of catastrophic maintenance/repairs.
■ Ability to track and correct driver behavior.
■ Safety awareness.
■ Ability to manage costs (i.e. reduce fuel consumption and overtime).
■ Reduced insurance premiums.
■ Increased fleet policy compliance.
■Optimized workforce productivity (e.g., re-sequencing existing routes and re-assigning deliveries).
■Improved environmental impact (i.e. reduced time spent idling or driving long distances).
Another telematics benefit is the speed and focus it provides in measuring results. For example, telematics can help determine if the safety training you just implemented has been effective in changing behavior, whether company policies are being followed, if new sales initiatives are being met, etc. What used to take quarters and years to measure, if it could be measured at all, now takes days and weeks – all with much greater accuracy.
“However, the greatest telematics benefit currently with ever-increasing fuel prices, is reduced operation costs, which includes lowering fuel consumption and vehicle maintenance costs” according to Vincent Rush,Business Development Manager with Cincinnati based Lynx Telematics.
“Fuel costs are reduced by eliminating unauthorized vehicle use, reduced speeding and idle time, and improved routing. Repair and maintenance costs are reduced by the ability to identify problems early and schedule maintenance through automated odometer readings. Wireless fleet management also improves driver safety and reduces greenhouse gas emissions.”
What can’t be seen can’t be measured – and telematics technology enables fleets to “see” into vulnerable areas of the business that are otherwise impossible to measure. Equipped with this information, you can identify process improvement targets quickly and with more certainty, as well as measure your performance with accuracy.”
Should Fleets Invest in Telematics?
The days of “out of sight, out of mind” are behind us. According to GE Capital Fleet Services, telematics delivers valuable access to fleet data and analysis, including vehicle performance metrics, trends, and customizable mapping. As companies search for ways to save money, reduce environmental impact, and improve fleet productivity, fleet executives have an opportunity to deliver by utilizing innovative technology solutions.
The ability to capture and view detailed, real-time data and exceptions supports efforts to change driver behavior and realize savings.
If an organization has clearly defined goals, can make the investment, and has resources to review data flows and manage exceptions, the return on investment can be significant.
Telematics technology has been thoroughly tested and proven for many years. The price points now support compelling ROIs and adoption rates are increasing quickly. Fleets are using it in bigger numbers to drive out costs and gain competitive advantage. The use of telematics is quickly becoming ‘table stakes’ to stay competitive.
A fleet’s investment in telematics depends on the application. Some fleets may simply need a tool to allow drivers to get from point A to point B.
For those folks, a GPS navigation system might help,” said Mark Goettel, senior acquisition & integration analyst for Wright Express.
Geotab’s Sutherland noted, “If you don’t know where you are going, any road will take you there. Before companies invest in GPS navigation or GPS tracking systems, they should first consider the requirements of the company to reduce operating and claims costs and the fleet operating budget, and to manage overtime.”
Sutherland cautions fleets against investing in small, standalone components such as GPS navigation or real-time location for dispatch.
“By investing in a technology solution that offers integrated data for driver safety and risk loss control, fleet expense management, human resource management, and carbon footprint reduction, companies can start with one of the four areas for return on investment and strategic growth and then implement the other areas over time,” said Sutherland.
Business today is extremely competitive. Profitability requires a keen eye on costs and efficient utilization of all assets. Telematics offerings help fleet managers bolster fuel economy, improve driver performance, manage maintenance intervals, and dispatch vehicles effectively. Those results clearly drive to reduced cost and better asset utilization. In addition, a more fuel-efficient fleet is a greener fleet.
ROI of Telematics: Staying in the Black
It is not always straightforward to quantify ROI. While goals and objectives of many businesses may be similar, telematics ROI depends on the company’s level of efficiency and ability to execute policies.
Each client’s ROI will be different depending on the type of solution that fits their fleet. At the very least, fleets should expect ROI to exceed the cost of telematics equipment and fees.
An additional ROI benefit includes reduced payroll hours due to a driver’s inability to inflate hours.
Many savings are not as easy to quantify, but just as important. The ability to prove service or a delivery time to a customer is helpful and saves in goodwill credits, but is not always easy to put a dollar amount on. The reduced risk of knowing where your vehicles are 100 percent of the time is also difficult to quantify, but clearly valuable. Many customers recover not only stolen vehicles, but their contents as well, and help drive criminal convictions based on finding the vehicle and knowing where it went after it was stolen.
Generally speaking, companies focused on productivity improvements will see a greater return than those focused solely on vehicle operating costs or risk and safety improvements. That’s not to say a company can’t achieve fantastic ROIs by reducing fuel and life cycle costs or reducing accident rates.
Per Sutherland’s experience at Geotab, ROI must be grounded in fact as well as achievable and measurable.
“Traditionally, fleet managers seek ROI in fuel and maintenance expense reduction,” said Sutherland. Using vehicle health-based predictive maintenance, “fleet managers can remove one preventive maintenance routine annually, which in itself will pay for the solution.”
Reduced idle time is one of the most obvious areas in which fleets can realize an ROI, according to Goettel of Wright Express.
“Many fleets can’t believe how much their vehicles are idling. We’ll perform ROI calculations based on a calculator we use, and typically we see ‘break-evens’ of between two and six months,” explained Goettel. “Telematics pays off much quicker than people would think.”
Businesses today can choose from a wide assortment of telematics technologies that deliver a range of benefits. “To ensure the best return on investment, a company should work with a provider that understands the company’s business requirements and delivers actionable intelligence,” suggested Peters of GE Capital Fleet Services. “A provider that delivers insight, rather than just data, can expedite the speed with which a business can implement operational changes to improve productivity, compliance, safety, and customer and driver satisfaction.”
Lynx Telematics, located in Milford Ohio, is an OEM (Original Equipment Manufacture) that specializes in developing proprietary fleet GPS Tracking devices for fleets of all sizes and functions.
For information on how Lynx Telematics can help your company save an average of $2500 per vehicle annually, contact Business Development Manager, Vincent Rush at (513) 965-6318
Lynx Telematics is an OEM that controls design, engineering, firmware, software development, IT support and manufacturing processes of our product, allowing us to produce the highest quality product in our industry, while offering our customers competitive pricing.
As your partner, we provide ongoing training and support to ensure that the product is properly sold to the end-user, maximizing the re-sellers profitability.
As one of the pioneers in telematics technologies, Lynx Telematics provides our clients with powerful end-to-end vehicle telematics tools. Our technology offers a real solution that delivers safety, saves money and provides an unprecedented level of peace of mind to our customers.