Uncovering the ROI of Telematics
The way you conduct business is changing. In today’s business environment, disruptions are creating new challenges, magnifying existing struggles, and fundamentally altering the landscape of your industry. Change can be challenging but often, complacency is worse. You need to remain agile and do all that you can to stay ahead of your competition. Have you found yourself asking, what can I do today to prepare for the challenges of tomorrow?
If so, you’re certainly not alone and in many ways, fleet is a microcosm of this evolving business dynamic.
The vehicles in your fleet are a critical part of your business. Whether you’re using them to deliver goods, repair infrastructure, or service customers, they’re more than just cars and trucks. They’re tools required to do a job. What’s the best way to review and maximize your fleet’s contribution to your business?
Getting started with telematics can feel like a major undertaking, but it doesn’t have to be this way. It’s a common misconception that you have to roll out a complex telematics strategy to your entire fleet in order to achieve a measurable impact. However, the reality is that even a small pilot program can deliver significant value to your business.
The first question we typically ask a customer who is considering a telematics solutions is simple; what’s the problem you’re trying to solve?
For example, a company who was struggling to control its escalating spend on tire replacements turned to telematics. With the single goal of reducing tire costs, they set up this new telematics solution to initially measure just one key metric – tire pressure. Each morning, the company conducts a vehicle health check to measure tire pressure and if an issue is identified, they’re able to address it immediately instead of incurring a more costly repair.
There’s myriad of business challenges that telematics can help solve. By focusing on one problem, or perhaps a particular segment of your fleet, rolling out telematics becomes a more manageable undertaking.
Identify a problem, see if data can help solve it and then expand from there. With telematics now in place, you’re ready to build upon your initial successes and begin tackling more complex challenges. But how do you harness the power of telematics to take the data it provides from merely insightful to actionable?
This is precisely where fleet management companies (FMCs) such as ARI help change the conversation.
The FMC’s Role as a Change Agent
In recent years, telematics technology and advanced analytics have changed how companies approach managing a fleet. With the increased transparency telematics provides, you know precisely how your fleet is performing in real-time. The potential for connected fleet management is immense and partnering with a FMC such as ARI can help you maximize your telematics ROI.
Every day, a typical fleet generates millions of data points – fuel transactions, maintenance records, licensing events, and more. Combine this information with telematics data and it is easy to see how even veteran fleet professionals can feel overwhelmed trying to process this volume of data at the speed at which it is generated. And simply processing the data isn’t enough; you need knowledge.
Bringing all of this data together serves as the foundation of any successful telematics strategy and typically, your FMC plays a vital role in this process. We’re the data integrator, consolidating telematics data with your other fleet metrics to provide a holistic view of your fleet’s performance. This insight allows you to dig deeper into areas where costs seem to be rising or efficiency is declining, ultimately fueling better decision-making.
In addition to being the data integrator, we’re also the solution provider. Your fleet management partner helps make the data actionable, allowing you to leverage it to create value for your organization. Together, we’ll leverage the data to uncover the “why” behind your fleet challenges and develop a strategy for improvement.
With the tools, technology and people in place to make the telematics information valuable, you’re able to explore connected fleet management and begin solving more complex challenges to make the most of your telematics investment. Opportunities to leverage this increased connectivity typically include:
- Measuring downtime to help increase efficiency
- Identify opportunities to right size your fleet based on utilization
- Increased visibility to engine diagnostic data to help optimize preventive maintenance spend
- Measure incidents such as harsh braking, hard cornering, and speeding to determine your drivers’ impact on TCO
- Monitoring productivity to help establish SLAs and notify/update customers in real-time
- Receive immediate notification of an accident; leverage additional data to help with subrogation
- Identify potential fuel fraud using fuel tank data and location information
This connectivity allows you to better monitor – and act upon – key fleet metrics, adding a new layer to the value proposition of your telematics strategy.
What’s on the Horizon?
Telematics adoption is at a pivotal point. There’s significant interest in the technology with a growing number of organizations exploring opportunities to adopt telematics. At the end of 2018, approximately 30 percent of all North American fleet vehicles had an active device. That number is expected to jump to nearly 50 percent by 2022. Among the top factors driving interest is the increased ability to actually drive quantifiable results. Simply put, companies are getting more ROI out of the technology, which is driving increased utilization.
In terms of what’s next, OEM-installed devices will likely propel adoption growth exponentially. Several manufacturers now offer factory-installed telematics units, eliminating one of the biggest challenges companies typically face when implementing a telematics program – device installation and the associated downtime. Factory-installed units can also provide enhanced vehicle commands such as remote start and remote lock/unlock while also simplifying the process of beginning or canceling service for a particular vehicle.
New technologies on the horizon will also continue to drive innovative solutions. In-cab cameras with telematics integration offer significant potential to improve safety by analyzing driver behavior and identifying instances of distracted driving. There’s also the opportunity to explore performance based insurance. Using telematics, your FMC and your insurance provider are able to interface to determine a more accurate risk profile, creating an opportunity to generate additional ROI in terms of reducing insurance premiums and liability. Finally, evolving analytics platforms will offer new ways to look at the data and uncover additional opportunities for improvement.
Preparing Today for a Connected Tomorrow
The real-time optics telematics delivers can transform a business’ performance. Whether it’s observing driver behavior in an effort to improve safety, helping to ensure regulatory compliance, or monitoring downtime to maximize efficiency, telematics will benefit most companies across virtually all areas of operations. Embrace the opportunity and be open to the optics telematics can provide.
From a tactical perspective, if you don’t currently have telematics in place, explore a pilot program. By introducing a telematics solution to a portion of your fleet, you can start experiencing the benefits that come with increased connectivity as you work toward a more connected future. It’s also important to remain flexible and adjust your strategy as technology continues to evolve. Don’t wait for the “perfect” solution and continue to miss out on the value telematics can provide, even on a small scale.
But remember, telematics is only a tool. You can’t just flip-the-switch and expect changes to occur overnight. It’s vital you understand what the data is telling you, and use it to determine how best to implement meaningful improvements. Success requires an organizational commitment and a culture ready to fully embrace behavioral change. It’s the action your business takes with the data that becomes the true solution.