Convincing senior management of the need for a telematics program in fleet can seem impossible at times. Several fleet management experts provide their insight on how to best achieve senior management support of a telematics program.
Keep Management Involved
During deployment and implementation, it is important to keep senior management involved and in the loop from the start.
"Make sure they understand how telematics can benefit the organization by providing them with regular reports on hot button issues, such as fuel savings, emissions reduction, or maintenance," said Mark Conroy, vice president, sales & marketing for Union Leasing. "For example, reductions in speeding can be correlated to fewer accidents and lower liability. Tracking vehicle diagnostics can be used to show reductions in maintenance costs and vehicle downtime. Fleet managers should be able to track ROI over time and communicate this information to senior management."
Wheels Inc. recommends obtaining buy-in from all managers by creating a "telematics deployment team."
This approach "will allow other stakeholders to find reasons to support deployment of the telematics program early on, and will allow for more support for program enhancement down the road. This will also ensure that senior management feels a sense of accountability for the success or failure of a program, making them more likely to be vocal and assertive in support of it," said Kimberly Clark, product application manager for Wheels.
The team can "champion an accelerated initiative to collect business cases from peers in operations, IT, sales, safety and compliance," noted Dyan Finkhousen, strategy leader, mobile resource intelligence for GE Capital Fleet Services. "The best way to win and maintain senior management support is to evaluate telematics solutions based on those business cases and their link to corporate goals - and maintain that focus throughout the deployment. Avoid getting distracted by the latest bells and whistles if they don't specifically address your operating objectives."
Create an ROI
Senior management is concerned about the bottom line. A program or system must be carefully researched and reviewed, and a return-on-investment (ROI) analysis should be conducted.
"Fleet managers should prepare an ROI that will include the reasons and benefits of a telematics program," said Steve Guertler, vice president for EMKAY Inc.
Some items Guertler noted at the top of an ROI list will include:
■ Fuel savings: achieved through less engine idling time, increased miles per gallon through speed monitoring, more efficient routing, and less GHG emissions.
■ Safety savings: achieved through safer driving and fewer accidents.
"We suggest the use of your fleet management company's accident management department in conjunction with your in-house risk management department for determining the 'all-in' cost of an accident (vehicle repair, legal, medical, Workers' Comp, missed work, etc.)," noted Guertler. "Obtain as much internal support as possible when presenting the program to senior management. The cost savings and health and well being of the company's employees should bring the support necessary."
Vehicle utilization is also a key component in assembling ROI for a program.
"Before implementing a telematics system, fleet managers should gather information on current vehicle utilization and operating costs. This will be needed to compare costs before and after implementation and to calculate ROI," said Conroy of Union Leasing. "The fleet manager can then use the telematics program to track and compare utilization information before and after implementation, including vehicle use, idle time, fuel consumption, miles-per-gallon, number of trips per day, and routing processes to determine if every vehicle is being used efficiently. Depending on the telematics system selected, this information should be easy to find and readily available."
Present a Plan Clearly
Once a telematics program has been researched and an ROI determined, it's time to present the plan to senior management.
"When fleet managers are soliciting support from senior management for implementing a telematics program, they will be most successful if they present the plan as a way to address issues that are important to their senior management, rather than focusing on their own needs," said Keith Steidle, manager, product development for Automotive Resources International (ARI). "Tying the initiative to corporate goals and objectives is key (e.g., cost reduction, risk mitigation, improving compliance, reducing greenhouse gases)."
Fleet managers need to engage early with senior management from all parts of the organization.
"Clearly articulate the goals and objectives of the program and how it will impact the organization, both financially and operationally. Consider identifying a single senior-level stakeholder in the organization who will drive the program forward," suggested Bruce Horan, director, PHH Arval Telematics. "This person often comes from the area with the most to gain from program implementation. For instance, the vice president of risk and safety would be the most logical stakeholder/sponsor if the goal of your telematics program is to reduce risk and increase driver safety."
Merchants Leasing suggests showing senior management the system and what the overall organizational impact will be.
Diana Holland, director of fleet management services for Merchants Leasing uses a simple formula as it pertains to just reduced idle time:
1-hour per day of idle time reduction
x 1 gallon of fuel
x $2.50 per gallon
x 5 work days per week
x 52 weeks
x No. of vehicles in the fleet.
"Then, add all the other strategic initiatives: reduced accidents (and the cost reduction achieved there), reduced maintenance cost and vehicle downtime, recovery of lost/stolen vehicles, and the list goes on," explained Holland. "As soon as the senior leaders see the financial impact - and oftentimes the neat and pretty reports and dashboard tools - early adoption is easy to achieve."
Try a Pilot Program
Pilot programs can enable a fleet to test the results of its ROI studies. "Consider a pilot to obtain data, and confirm goals and objectives can be reached," said Horan of PHH Arval. "At this point, other opportunities may be identified and quantified. Then, present a consolidated business case. Make sure all areas for savings opportunities (productivity, risk, vehicle operations) are included."
When looking for a provider, "select a vendor capable of providing a solution that is both intuitive to maximize end-user adoption and also sophisticated enough to ensure the company meets its business objectives," noted Michael Geffroy, VP sales for TomTom WORK.
A pilot stage can occur during the budgeting phase or the deployment phase, according to Clark of Wheels. "Either way, it allows the deployment team to build a case study for the organization's need for telematics by collecting baseline data from which it can gauge results after the pilot is concluded. The strongest cost/benefit analyses can be built from this approach, which will allow for more senior-level advocacy of the program."
Stage the deployment as a series of manageable steps, added Geffroy, "highlighting successful milestones to build momentum for subsequent phases."
Once a program has been selected, "carefully analyze and perform the required system integration so any current applications work seamlessly with the new system and make it easier for staff to transition," said Geffroy. "Then develop key performance indicators for all application developers, administrators, and users to provide the data necessary for continuous system improvement and refinement."
Update Fleet Policy
Fleet managers should integrate telematics data into fleet policies to provide the ability to take action based on the data.
"For example, speeding or idling alerts that exceed company thresholds should require prompt follow-up actions be taken with the offending driver to change these behaviors," explained Clark of Wheels. "This way, poor driving behaviors can be identified proactively and used as an input into risk profiles to identify those drivers for whom intervention is needed prior to an incident, rather than afterwards."
Clark recommended companies deploy regular communications about safe driving behaviors and create rewards for smart driving behaviors based on the results from telematics data.
Next, Clark suggests finding ways to integrate telematics into organizational processes. "This is especially effective for revenue-generating activities such as dispatch and customer relationship management (CRM) systems," she said. "This will allow the organization to continue to derive benefits from the program, and maintain long-term senior management support for telematics."
Senior Management Helps with Policy Enforcement
Inevitably, policy will need to be enforced and senior management's support up-front will go a long way toward resolving disputes in the field, noted Guertler of EMKAY.
"When launching the program, have the CEO or other key figure announce it internally. When issues arise, you will be able to turn to that announcement showing the importance of the program and senior management's support." FF