If you're reading this, chances are you understand the vital role telematics plays in helping businesses succeed. It's challenging to run at max efficiency and productivity when you do not use technology to measure the performance of your vehicles and mobile workforce continuously.
Once you've bought into the viability of this technology, the job then becomes selling your boss, fleet manager, or superior on investing in the product for your fleet.
Making a CASE for telematics usually involves one of or a combination of these four pillars:
Speaking about how this solution can solve these four main challenges is an easy way to sell the idea of telematics technology for your fleet. It helps to have real-world, hard numbers and examples to provide stakeholders as you make your CASE for vehicle telematics.
Gaining Compliance with Fleet Telematics
Compliance can mean the difference between life or death for a company - literally and figuratively. The electronic logging device (ELD) mandate was put into place to ensure that drivers are not endangering themselves or others by driving for hours on end without an enforced break. Now, if you are not ELD compliant, or keeping electronic logs correctly, violations can cost upwards of hundreds of thousands of dollars.
The FDA's Food Safety Modernization Act (FSMA) was put into place to ensure the safe transportation of food in trailers. In the same way as ELD, violations can financially cripple an organization that falls under this law but are not compliant.
However, compliance doesn't always mean following a federally mandated law. Maybe you have a driver and company policy that you need to enforce. It's impossible to do this without a system of accountability in place for your employees. You need data to enforce rules that you have in place that ensure safety and productivity.
Telematics systems do just this. The level of technical and customer support provided by these experts allows your company to run on all cylinders without a hiccup. Some businesses know the pains of choosing the cheapest GPS tracking option. If you have shaky and unreliable data from real-time GPS tracking, it's almost even worse than not having a fleet tracking solution in place at all.
Gaining compliance through telematics services also translates to saving labor costs. If your business still relies on paper documents, think of all the hours spent combing through them to ensure compliance. A switch to electronic documentation, for federal compliance or other business reasons, can add up to a significant amount of money saved on administrative and back-office labor costs.
Whether you currently face federally-mandated compliance or need to enforce current company policy, telematics will deliver the data you need.
Providing Driver Accountability Through Visibility
Trying to enforce accountability for employees without a telematics solution is like trying to drive blindfolded. If you have no visibility into driver behavior, there's no way to hold them to any standards or enforce a driver policy, as mentioned above.
Telematics gives you visibility into your entire mobile operation. The primary location tracking and mapping capabilities allow you to quickly and easily reference all of your vehicles and assets. You can waste so much time making calls to drivers for location updates, estimated time of arrivals (ETAs), or update their current route. Again, significant ROI is available by reducing the time it takes to communicate with drivers in this way.
Analyzing and optimizing driving routes also has the potential to save significant money to the bottom line in a myriad of ways. Mainly, telematics data empowers you to hold drivers accountable for the routes they take to jobsites. Stopping drivers from taking the supposed scenic route can save significantly on fuel consumption and costs per month. Telematics software can also provide data showing how much employees are filling up on gas vs. tank capacity. This capability often reveals the personal usage of company funds to fill up their vehicles.
Automatically routing drivers on the most optimized route plays a significant factor in accountability. However, we'll dive deeper into this ROI feature when we talk about efficiencies below.
Improving Fleet Safety
For many fleets, the motivation to implement a telematics solution comes from a need to reduce risk. While improving driver safety by preventing injuries and fatalities is a top priority, there is a financial component to think about as well.
The costs associated with an injury-related crash can average about twice the rate for a non-vehicle related workplace injury and exponentially rises if there is a fatality.
The costs of an average work-related crash can increase by a factor of 10 depending on the severity according to statistics from the Network of Employers for Traffic Safety (NETS). Here are a few other statistics to keep in mind:
- A non-injury, bent-metal crash costs about $5,900.
- An injury-related crash costs about $65,000.
- A fatality-involved crash costs about $672,000.
A judgment of liability could push these costs into the stratosphere. It is not unheard of to have multi-million-dollar awards in the wake of particularly high profile or severe crashes.
A high-profile crash may also bring with it significant, unfavorable publicity that could have long-term implications for the company's brand. This case usually negatively impacts its profitability, further compounding the costs of a crash.
Reducing collision rates will not only help prevent unnecessary deaths but will save the company significant out-of-pocket expenses.
Vehicle telematics improves safety and reduces risk in so many ways. Companies have gotten creative in the ways they utilize the data. There are compelling case studies where businesses decreased their collision and fatality rates with customized alerts to drivers when they get within a half-mile of dangerous turns.
Simple speed monitoring is the lowest hanging fruit when it comes to improving safety. Whether you monitor vehicle speeds over a specified threshold or certain miles per hour (MPH) over the posted speed limit of a road, telematics makes it easy to reduce ticket rates as well.
Efficiency Leads to Increased Productivity and Revenue
Lowering costs is one thing, but vehicle tracking technology also offers fleets more than savings. It provides increased productivity, which leads to increased profits.
As briefly mentioned above, telematics software includes a route optimization component that vastly improves efficiency and productivity. An opportunity for significant revenue increases is available, even increasing the number of jobs per day per vehicle by one.
Routing features usually involve optimization around the stop locations, number of drivers, traffic, and other essential road restrictions. You can send routes to drivers in a multitude of ways, including by text message or email to a mobile device, or directly to an integrated tablet inside the vehicle.
Some companies even draw out zones on their map, referred to as geofences for visualization of their stops. It also helps when a new stop emerges because you can easily reference what zone that destination falls under and seamlessly added to that driver's route. Getting employees to locations more efficiently usually translates to significant savings in fuel expenditures. By reducing mileage, you are also improving fuel efficiency as well.
Scheduling Vehicle Maintenace
Proper planning and scheduling of vehicle maintenance lead to increased profits in a host of different ways. It helps reduce maintenance costs by preventing catastrophic repairs by monitoring vehicle diagnostics. The more proactive you are in vehicle maintenance and health, the fewer problems they will have. This workflow also means longer vehicle lifecycles. Neglecting even standard and routine maintenance can lead to shorter vehicle lifecycles.
Scheduling vehicle maintenance also reduces downtime. Having one or more vehicles off the road for repairs for an extended period can negatively impact revenue. Proactively informing drivers of when they need their routine maintenance completed through telematics systems keeps vehicles on the road longer and more productive. For example, a telematics device inside the vehicle can notify you or the driver when they are 500 miles from requiring an oil change.
Measuring Telematics Value
You can't manage what you don't measure. The measurement and monitoring of your mobile workforce performance are fundamental to making a case for telematics. Without telematics data, it is nearly impossible to have a full account of both your expenses and how it is helping to generate revenue. You can make changes to the operation to eliminate waste and improve productivity with this data.
As a bonus, here are some other ways to demonstrate ROI for telematics:
Use an ROI Calculator
With an ROI calculator, you can visualize the potential cost savings based on your business operation. Some telematics providers offer this resource on their website. This resource is a vital tool to use in making a case for telematics to your fleet manager, boss, or manager.
Run a Pilot Phase
Many telematics providers offer free trial periods called pilots. These trials are a great time to get a baseline of data. Pilots usually involve installing telematics devices on a portion of your vehicles without telling the drivers to see how they perform when they think no one is watching.
During the pilot, concentrate on a core business challenge you want to solve, such as reducing idle times, fuel costs, or improving safety. Review the data at the end of the pilot and use these results to measure success after your full implementation. For example, if you find that your vehicles average 45 minutes of idle time per day, set a goal to reduce that to ten minutes per day.
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The Time to Implement and Save Is Now
The best business leaders not only focus on today's challenges, but tomorrow's as well. As part of your case, address how your telematics provider can scale their solution as your business grows. Demonstrating that you're thinking both tactically and strategically will help make your case.
Finally, while cost should be a consideration, how it will solve your immediate business challenges and help add to the bottom line is the crucial point. By focusing on the solution's ROI potential, you will have a good chance of convincing your company leadership that this technology is the right direction for the fleet and the company as a whole. Continue the conversation and start comparing telematics providers.
Originally posted on Automotive Fleet