Telogis’ Tim Taylor: The (Surprisingly Fast) ROI of Telematics

Tim, let’s talk about val­ue propo­si­tion for fleets who are just con­sid­er­ing telem­at­ics.

The val­ue propo­si­tion for telem­at­ics is essen­tial­ly to save mon­ey on fuel, to mea­sure and improve uti­liza­tion of your fleet and your resources, to dri­ve safe­ty improve­ment and to empow­er your employ­ees to do a bet­ter job. It is all con­nect­ed, right? There is this con­nect­ed ecosys­tem of the dri­ver, the cus­tomer, your enter­prise sys­tems, and the vehi­cle. You can improve per­for­mance in every one of those dimen­sions with telem­at­ics.

How is this going to impact the fleet with respect to fuel sav­ings and dri­ver safe­ty?

A cou­ple of key low hang­ing fruits in telem­at­ics are fuel sav­ings and dri­ver safe­ty. On the fuel sav­ings side you can imme­di­ate­ly reduce non­pro­duc­tive idle time. The typ­i­cal instal­la­tion of hard­ware allows you to mea­sure idle time, but if you have an up-fit­ted com­po­nent on the truck that is con­nect­ed to the PTO like a boom on a buck­et truck then you mea­sure non­pro­duc­tive idle time and pro­duc­tive idle time. Typ­i­cal­ly, fleets that are not mea­sur­ing idle time are idling two to three hours a day. They don’t believe it but it is true, that is what the data shows. The telem­at­ics invest­ment is almost com­plete­ly paid for — gen­er­al­ly sev­er­al times over — sole­ly by the reduc­tion of idle time.

But then on top of that because you know how many miles your trucks are dri­ving, you know how fast they are dri­ving, you still reduce fuel con­sump­tion and expense by reduc­ing miles. A slow­er fleet uses less fuel so there is a lot of fuel sav­ings in the telem­at­ics invest­ment that imme­di­ate­ly pay for the sys­tem.

If a fleet opts to adopt a telem­at­ics solu­tion, what do the next steps involve?

There is a cer­tain invest­ment in hard­ware that goes on the vehi­cle. The hard­ware can also come from the man­u­fac­tur­er in the case of some of our OEM part­ners such as Ford, Vol­vo, Mack, Man­i­towoc Cranes and just recent­ly, Gen­er­al Motors. The hard­ware can be installed at an up-fit­ter or it can be installed by the cus­tomer them­selves, but we need a piece of hard­ware on the vehi­cle that gives us igni­tion on and off, loca­tion, head­ing and speed. It will also give us engine date, oil life, tem­per­a­ture, seat belt con­nec­tion, and if you put in oth­er sen­sor inputs, out­rig­gers out, PTO engaged, boom-out-of-cra­dle; things like that. So, the intel­li­gence is com­ing from the vehi­cle through a data con­nec­tion through a wire­less net­work to our servers. We present it in the form of infor­ma­tion, alerts, reports, and data trends and dash­boards to allow the cus­tomer to do some­thing with that infor­ma­tion.

Now, how does the fleet man­ag­er get this infor­ma­tion?

The infor­ma­tion is deliv­ered over the web via a cloud-based prod­uct line called Soft­ware-as-a-Ser­vice or “SaaS”. A lap­top, a note­book, a phone, any wire­less­ly con­nect­ed or web con­nect­ed device will pro­vide that vis­i­bil­i­ty. Most super­vi­sors in the field are using a tablet or a lap­top to find out where the vehi­cles are that they are man­ag­ing. How fast they are dri­ving? Are they on the job­site? How much time on the job­site is work time? All of those met­rics are avail­able to the mobile super­vi­sor through a mobile app that can be installed on any iOS or Android device.

Why would a fleet not want this?

We say that our cus­tomers have been trans­formed by loca­tion intel­li­gence because there are so many dif­fer­ent dimen­sions of the mobile enter­prise that can be improved; from fuel sav­ings to safe­ty to bet­ter uti­liza­tion of the equip­ment to their cus­tomer sat­is­fac­tion. And then when you con­nect our data with maybe data on the ERP pro­gram such as SAP or you match up fuel cards to what we are doing, it just keeps pro­vid­ing sav­ings to the cus­tomer. For a com­pa­ny that doesn’t have telem­at­ics, you start with two or three things and you move for­ward and you imme­di­ate­ly see the results. In the words of one of our large cus­tomers, keep peel­ing the onion lay­ers of the things you can do with telem­at­ics to dri­ve a bet­ter and bet­ter busi­ness.

Can you give us an instance of what a suc­cess­ful fleet has been able to do with your help?

I asked one of the util­i­ty cus­tomers at the end of their first year with us what had changed, what were their “ah-ha” moments and the fleet man­ag­er said, “Well, out of my thou­sand buck­et trucks I real­ized I have too many. We have a boom-out-of-cra­dle sen­sor and I look at the month­ly report and I real­ize that for a large per­cent­age of my buck­et trucks the buck­et is not get­ting out of the cra­dle.”

They were send­ing buck­et trucks to do what a pick­up truck could do so they had too big of an invest­ment in buck­ets. And then they real­ized they were doing main­te­nance on those booms on a peri­od­ic basis — not based on the num­ber of hours used. So, they went to the man­u­fac­tur­er of the buck­ets and said, let’s put togeth­er a main­te­nance pro­gram based on hours used, and it saved them $300,000 in the first year. Those were real dol­lars, but it wasn’t some­thing you would have found in the orig­i­nal ROI esti­mates.

How long does it take for a typ­i­cal fleet to get their return on invest­ment?

Well, the instal­la­tion takes a mat­ter of days or weeks depend­ing on how wide­spread you are and how fast you want to get it done. The soft­ware you can learn in the mat­ter of a few hours and to see sav­ings all you need to do is start putting up a score­card for peo­ple. We say: if you can mea­sure it you can man­age it. When you con­nect things and you pro­vide a score­card the com­pa­ny starts chang­ing behav­ior. We see cus­tomers trans­formed in a mat­ter of three or four months. Lit­er­al­ly, they will save the mon­ey that they invest in a mat­ter of months. If it takes more than six months I would be sur­prised. It is a mat­ter of being com­mit­ted to using the infor­ma­tion, hav­ing exec­u­tive spon­sor­ship and a team that engages — and then you launch.

What are your clients telling you about the impact on safe­ty?

There are sev­er­al dimen­sions to the safe­ty impact of telem­at­ics. The first is exces­sive speed­ing. Nobody thinks their dri­vers are going over 75 miles per hour in their Ford F-150; the 23-year-old guy who gets off on a Fri­day night and is dri­ving home. You don’t think he goes over 75 miles per hour, but when you start pro­vid­ing vis­i­bil­i­ty and account­abil­i­ty — we are all account­able to our com­mu­ni­ty, to our share­hold­ers, and to our dri­vers for safe­ty — peo­ple slow down. You can put out an alert, you can put out a report and we show it on the dash­board what hap­pens to speed­ing. For most of our cus­tomers when they start score card­ing exces­sive speed­ing it drops by 80 or 90 per­cent. The result is few­er inci­dents, less fuel used, right? That is tremen­dous.

We also have a score card for dri­vers that con­sol­i­date mul­ti­ple types of dri­ver per­for­mance. Not only speed­ing against post­ed speed, but idling, hard brak­ing and hard accel­er­a­tion. We can con­fig­ure a score card for the whole fleet and it shows a dri­ver where they stand com­pared to their peers and to tell the cus­tomer – is your fleet improv­ing on these things? Because the result is a more effi­cient fleet, safer dri­vers, less fuel. It all works togeth­er but I call it gam­i­fi­ca­tion. It is not Big Broth­er; rather it’s about mak­ing a game out of being bet­ter.

One util­i­ty cus­tomer that just deployed over a thou­sand vehi­cles with us: hard­ened, East Coast union dri­vers. The oper­a­tions peo­ple who are on the team said, “Our dri­vers are trip­ping all over them­selves to get to the top of the leader board.” We are mak­ing a game out of it and it works.

So you think the ‘Big Broth­er’ con­cern the dri­vers ini­tial­ly had has dis­ap­peared?

It goes away after they under­stand that the “facts” from the data pro­tects them. If some­one calls and says that your dri­ver ran over my mail­box and then left but then you look at the appli­ca­tion and say, “what hap­pened to this spot on this day?” and you find out that none of your trucks were at that loca­tion, the driver’s rep­u­ta­tion is saved. Most of the dri­vers are great dri­vers and they like that so we real­ly don’t have a prob­lem with it after the com­pa­ny explains what they are try­ing to do.

Tell us about the new Tel­o­gis alliance with GM OnStar.

We have been work­ing with Gen­er­al Motors to take the invest­ment they have already made in the built-in OnStar hard­ware archi­tec­ture and infor­ma­tion com­ing from the vehi­cle – loca­tion, head­ing, speed and engine data to pro­vide that to their com­mer­cial cus­tomers. It will be avail­able to their retail clients, but since we pro­vide this prod­uct and soft­ware to com­mer­cial fleets we want­ed to part­ner with GM to pro­vide a more intel­li­gent fleet based on the invest­ment already made by the OnStar peo­ple. Now we have the abil­i­ty to take that data from Gen­er­al Motors OnStar servers and turn on soft­ware loca­tion intel­li­gence for the com­mer­cial fleet that is using GM com­mer­cial vehi­cles.

Do you work with any oth­er OEMs?

We have sev­er­al OEM providers that allow the cus­tomer to check the box to get hard­ware installed at the fac­to­ry. If the cus­tomer has a mixed fleet, they have some Volvos, they have some GMs, they have some Fords, they can get telem­at­ics built in from all of their fleet using our plat­form. That is a real win for the indus­try.

We already have a rela­tion­ship with Ford called Ford Crew Chief pow­ered by Tel­o­gis. So if a cus­tomer wants to order a vehi­cle with the Ford Crew Chief hard­ware installed they can order it with their deal­er and it comes with the hard­ware installed and one year of Tel­o­gis ser­vice.

BIO

Tim Tay­lor
Chief Client Suc­cess Offi­cer

Mr. Tay­lor has exten­sive expe­ri­ence in senior lead­er­ship posi­tions with start-up and fast-growth com­pa­nies on an inter­na­tion­al scale. As founder and CEO of Tycom Cor­po­ra­tion (now Kyocera Tycom Corp.), CEO of Tycom Den­tal Inc. (now Sybro­nEn­do Cor­po­ra­tion, a divi­sion of Sybron Den­tal Spe­cial­ties) and CEO of Tulon Inc., Mr. Tay­lor has a track record of suc­cess­ful prod­uct devel­op­ment and com­pa­ny lead­er­ship in a vari­ety of mar­kets. Pri­or to join­ing the team at Tel­o­gis, he had been the direc­tor of Liq­uid­met­al Saga Italy, a tech­nol­o­gy start-up com­pa­ny in the Vene­to region of Italy aimed at the Euro­pean lux­u­ry goods mar­ket.

Mr. Tay­lor earned a Bach­e­lor of Arts in Russ­ian Lan­guage and a Bach­e­lor of Sci­ence in busi­ness admin­is­tra­tion from the Uni­ver­si­ty of South­ern Cal­i­for­nia.

[email protected]

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