November 2009, Fleet Financials - Feature
Imagining the Future of Telematics
From simple routing and vehicle tracking to preventive and predictive maintenance, telematics experts share their thoughts on where the future of telematics is headed.
By Lauren Fletcher
We are in the "information age." Fleet managers require detailed data to best manage their vehicle fleets, reduce operating costs, and increase overall vehicle and fleet efficiency.
One commonly used fleet management tool in today's computer-based world is vehicle telematics. This type of mobile resource management has come a long way since the early days of GPS, and experts believe there's a lot in store for the future of telematics.
Telematics Use to Grow
"Not unlike the innovations that led to the industrial revolution, the quality transformation of the manufacturing sector in the 1950s, and most recently, the ubiquitous use of the Internet, we believe telematics and its related applications will establish the new golden standard for mobile resource management," said Doug Peters, telematics analytics leader at GE Capital Fleet Services.
Experts know this technology is still in its infancy and expect its use to grow.
"Telematics usage is only going to increase over time as the technology improves and expands. As government regulations become more and more strict, we will see an increased awareness in fleets needing telematics solutions to manage fleet costs and compliance with regulations," said Bob White, vice president, operations at Automotive Resources International (ARI).
"As the demands of our economy and markets increase, businesses small and large begin to realize that mobile operations can be managed with a Six-Sigma quality approach and a level of virtual connectivity previously reserved for on-site resource management," said Peters. "The effective use of mobile resource intelligence will radically transform the way fleet managers, operations, and finance leaders think about and manage their mobile operations."
Seeing the Future of Telematics
Telematics system adoption rates are expected to continue to increase as hardware costs decrease and the need to stay competitive persists.
"Devices will continue to get smaller, more powerful, and easier to install," noted Bruce Horan, director of on-board telematics for PHH Arval. "Vehicle data buses will continue to get faster and more comprehensive and have more data available for consumption. When that happens, it's not hard to imagine we'll know things such as the number of lane departures that occur, how many last-minute stops were made, and whether it was raining during an accident, or have additional insight into the impact that engine load and driving behavior have on fuel economy."
Officials at telematics company Networkfleet also believe telematics systems will continue to evolve and incorporate more data integration with other systems.
"Networkfleet provides data integration with third-party applications in near real-time. This includes routing, dispatching, and maintenance applications," explained Craig Whitney, VP of marketing at Networkfleet. "For example, odometer readings and diagnostic trouble codes can automatically flow into maintenance reports and allow fleet managers to schedule immediate repair when a diagnostic trouble code is triggered."
Some believe the next "big thing" will be use of open-source hardware, or hardware liberally licensed to grant users the right to study, change, and improve its design through availability of its source code.
"We may see focus move away from proprietary hardware to open-source hardware and greater focus on software and data analytics, such as enhanced exception-based activity integrated with other elements of your fleet program," said Stratford Dick, senior director of marketing at Wheels Inc.
Capabilities to Expand
"Telematics is the future. Right now, telematics is about putting a dot on a map and allowing people to understand where their vehicles are," said Mark Goettel, senior acquisition integration analyst and product manager for Wright Express. "Where I see telematics moving, and it's already moved in this direction, is vehicle and engine diagnostics and the notion of tapping into vehicle equipment to allow measurement of important operational parameters."
Beyond vehicle and engine diagnostics and vehicle equipment monitoring, "I see safety and security as the next two big things in telematics," Goettel continued.
According to Goettel, safety means giving drivers feedback about their driving behavior to reduce risk. WEXSmart, the Wright Express telematics solution, uses a driver scorecard to help drivers and managers monitor the number of speeding events, harsh breaking and acceleration events, and seatbelt violations.
The scorecard allows a fleet manager to contact a driver in for a speeding problem in close to real-time and with presentable data - not the following week when a report arrives or after a speeding ticket is issued.
"Speeding can degrade your brand. When people see someone speeding and cutting them off in a vehicle with the name of your business on the side, it affects business," noted Goettel.
Safety is a new issue telematics can manage. Some applications provide real-time feedback to correct dangerous driving behaviors as they happen.
"I believe the next 'big thing' is security, such as the ability to keep an eye on hazardous waste shipments," said Goettel. "There are applications available that can shut down stolen vehicles. Drivers would need to enter a password to start a vehicle, or, if a vehicle is detected in a restricted area, it would automatically shut-down."
This use of telematics has yet to experience a mainstream adoption, but Goettel believes it might be a new direction telematics will take.
Telematics to Help Fleets Operate
GPS tracking systems will become more integrated with operational systems such as enterprise resource planning (ERP) software, believes Robert Donat, president at GPS Insight.
"Companies gain tremendous competitive advantages by being able to make business decisions on the exact, real-time whereabouts of their fleet, as well as by analyzing the past history of their vehicles to drive business intelligence such as exact costs of service," said Donat. "We expect routing will be integrated more fully into GPS. We also expect having a robust hierarchical reporting framework will be invaluable for large fleets."
GPS Insight is investing heavily in the creation of such a framework so fleet administrators can "drill down" to problem areas in their fleet, as well as ensure simplified administration and ad-hoc reporting.
"Leading companies see telematics not as a single solution, but an integrated strategic and essential tool that helps them collect and manage daily/monthly statistics on how their company is operating," said Colin Sutherland, VP of sales at GEOTAB. "The most progressive of our customers are generating between $3,000 and $5,000 per year, per vehicle in direct benefit from the telematics technology with an annual investment typically under $400."
Sutherland believes the real benefit of next-generation telematics solutions is a greater customer ROI, but he cautions to select a telematics partner carefully.
"Some devices are limited in their capabilities to record the full range of data to drive the future savings. Ask your telematics vendor for their roadmap," suggested Sutherland. "Does it include an automatic vehicle locator (AVL), driver safety, and fuel or fleet maintenance as well as accurate trip and time-card recording? Fleets need to invest in a platform provider and not simply an AVL provider as they move forward to see the future advantages telematics promises."