The Power of Telematics to Help Improve Your Business

By Bruce Horan, Direc­tor, PHH Onboard®

New research shows that 20 per­cent of the North Amer­i­can fleet mar­ket has imple­ment­ed telem­at­ics. While that num­ber may seem low for a tech­nol­o­gy that’s been in the mar­ket for over 10 years, I believe it will dou­ble to 40 per­cent, reach­ing crit­i­cal mass, rel­a­tive­ly soon. Today, cus­tomers are empow­ered when they see telem­at­ics as a viable tool to gain deep­er insight and vis­i­bil­i­ty into fleet oper­a­tions and to make strate­gic busi­ness deci­sions that go well beyond GPS track­ing and vehi­cle rout­ing. It enables com­pa­nies to enhance their fleets’ per­for­mance and val­ue. In fact, telem­at­ics is becom­ing increas­ing­ly tied to logis­tics through­out the sup­ply chain.

Telem­at­ics can assist your com­pa­ny, regard­less of your indus­try or type of fleet. It can show you what you’ve been miss­ing by pro­vid­ing bet­ter insight into your fleet. A suc­cess­ful telem­at­ics pro­gram means you won’t have to ded­i­cate hours read­ing through fig­ures and mak­ing con­nec­tions your­self. It can help you exe­cute on scal­able improve­ment plans, change dri­ver behav­ior – which is key for ROI – and mea­sure results.

So why aren’t more com­pa­nies tak­ing advan­tage of telem­at­ics? The truth is the tech­nol­o­gy had a bit of a rocky start. Expen­sive hard­ware and pro­gram costs made a pos­i­tive ROI chal­leng­ing; would-be ear­ly adopters were scared away as sev­er­al telem­at­ics com­pa­nies fold­ed and other’s long-term finan­cial sta­bil­i­ty was in ques­tion. Last­ly, cer­tain tech­nol­o­gy issues plagued the indus­try. But fast for­ward to today, hard­ware costs are down as much as 300%, instal­la­tions have nev­er been eas­i­er, tech­nol­o­gy issues are rare, and ser­vice and deliv­ery excel­lence have nev­er been high­er.

I equate the telem­at­ics adop­tion time­line and the impact of the tech­nol­o­gy to oth­er life-chang­ing tech­nolo­gies, like the PC, Inter­net and mobile phone. All of those took much longer than 10 years to gain trac­tion and reach crit­i­cal mass. How­ev­er, in 2014, most of us couldn’t imag­ine con­duct­ing busi­ness with­out them. Do you remem­ber the time and effort it took to sim­ply send a doc­u­ment for review and red­line before email was main­stream? The same will be true with telem­at­ics and fleet man­age­ment in a few years. You’ll try to imag­ine how you were able to man­age expens­es and meet cus­tomer expec­ta­tions with lit­tle to no insight into what was actu­al­ly hap­pen­ing out in the field and it’ll be hard to pic­ture.

The ben­e­fits of telem­at­ics are abun­dant, includ­ing increased fuel sav­ings, more effi­cient vehi­cle track­ing and rout­ing, and the abil­i­ty to set a vir­tu­al perime­ter for a real-world geo­graph­ic area. For exam­ple, one of the biggest con­trib­u­tors to poor fuel effi­cien­cy is idling, fol­lowed by hard accel­er­a­tion and speed­ing. Telem­at­ics can track these fac­tors and pro­vide fleets the quick­est pay­back, with almost imme­di­ate results and cost reduc­tions. The tech­nol­o­gy can track risky behind-the-wheel dri­ving behav­iors (e.g., fail­ure to use seat­belts, speed­ing, harsh brak­ing and cor­ner­ing), which deliv­ers a longer-term prov­able pay­back in reduced acci­dent rates and asso­ci­at­ed costs. Many telem­at­ics pro­grams are evolv­ing to cov­er dri­ver safe­ty, increased employ­ee pro­duc­tiv­i­ty and effi­cien­cy, route com­pli­ance, and improved cus­tomer ser­vice. Telem­at­ics can also assist with com­pli­ance issues that include both gov­ern­ment-man­dat­ed and indi­vid­u­al­ized cor­po­rate poli­cies.

In an era of ana­lyt­ics, telem­at­ics can take data and make it use­ful. For exam­ple, we worked with a nation­al ser­vice provider to help imple­ment telem­at­ics to reduce the risk to their dri­vers and improve fuel per­for­mance. The imme­di­ate pay­back was a reduc­tion in the company’s fuel expense by almost $3 mil­lion in cal­en­dar year 2013 and a reduc­tion in their acci­dent rate of 8 per­cent. What oth­er tech­nol­o­gy can pro­vide that lev­el of return in such a short peri­od of time? Now that the ground­work has been laid to gain insight into uti­liza­tion and oper­a­tions, the com­pa­ny is focused on reduc­ing its fleet size by 2 per­cent and its mileage by 6 per­cent – impact­ing the bot­tom line by an esti­mat­ed $2.8 mil­lion annu­al­ly.

Imple­ment­ing telem­at­ics will help increase your fleet’s pro­duc­tiv­i­ty, improve your cor­po­rate risk pro­file and reduce your fleet’s oper­at­ing costs. Telem­at­ics isn’t just a mat­ter of installing tech­nol­o­gy in a vehi­cle, it’s under­stand­ing the result­ing infor­ma­tion and putting it into action to bet­ter serve your com­pa­ny.

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