Managing the Financial Side of Commercial Fleets

Telematics: No Longer Just a Dot on a Map

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.

September 2009, by Lauren Fletcher - Also by this author

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," said Craig Whitney, VP of marketing at Networkfleet, Inc. "A complete wireless fleet management system combines 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.

Sharing their expertise for this article are telematics experts from Automotive Resources International (ARI), Ford Works Solutions, GE Capital Fleet Services, Geotab, GPS Insight, Networkfleet, PHH Arval, Wheels Inc., and Wright Express.

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," said Bob White, vice president of operations at ARI. "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," said Vince Sommer, senior technical director at Wheels Inc. "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, 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," adds Bruce Horan, director of onboard telematics for PHH Arval. "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, continued Horan. "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," said Horan.

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 cata-strophic 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," said Horan of PHH Arval.

According to Whitney at Networkfleet, the greatest telematics benefit is reduced operation costs, including lower fuel consumption and vehicle maintenance costs.

"Fuel costs are reduced by eliminating unauthorized vehicle use, reduced speeding and idle time, and improved routing," said Whitney. "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, noted Horan. "Equipped with this information, you can identify process improvement targets quickly and with more certainty, as well as measure your performance with accuracy."

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