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Sealing technology investment deals in today’s economy

By Peter Fitzgibbon - 27th August 2013 - 13:57

It's becoming tougher as austerity bites and budgets tighten. So how do you 'sell' the benefits of investing in Fleet Management technology? Trimble's Mark Forrest addresses the question

Trimble recently conducted an independent study among directors and senior managers operating large field-based work forces in the UK and found that 85 per cent considered the major concern for business performance in the coming year to be the economic climate.1 Businesses are, as a result, tightening budgets and being more cautious in their investment decisions, particularly when it comes to technology.

Fleet Management technologies have gained recognition as being powerful management tools, generating a Return-on-Investment (ROI) in 12 months, or less in some cases. However rolling out the technology across a business is a big decision and convincing a board to invest is not an easy feat. As a result, demonstrating the strategic value of technology, prior to investment, has become increasingly important.

Choose the right technology and demonstrate strategic value

There is often a confusion that Fleet Management technology is a ‘one size fits all’ solution but all businesses operating mobile workforces have different objectives and the technology needs to be tailored to them if it is to operate successfully. Furthermore, technology is merely an enabler and unless it is used and interpreted in the right way it isn’t going to offer any value. Pilot studies have proven to demonstrate the value of technology and have gained traction as being a necessity in the decision making process.

Pilot studies are performed prior to a company investing in and fully implementing technology. Typically lasting around three months, they are focussed on demonstrating to the board the capabilities of the technology and to effectively ‘test’ its performance, approving or disapproving any concerns a company might have before making the big investment decision. Without a pilot study it is not possible to accurately determine how much money a company can save or the benefits they can achieve from deploying fleet management technology.

Information is collected through a pilot study typically consisting of three phases:

Phase one – Baseline data needs to be collected and an analysis performed on how the fleet is currently performing to determine problem and improvement areas. For example, if the technology picks up on a significant amount of vehicles speeding, idling, using excessive amounts of fuel etc, it is clear that these are metrics which need to be monitored. A total of three metrics, at the most, are generally measured at a time. Once the baseline data has been analysed it can be presented back to the board, highlighting the areas for improvement and suggesting ways to make the necessary changes.

Phase two – Is the improvement phase. The metrics are monitored through the technology to measure performance against predefined targets for improvement.

Phase three – Offers additional improvement. Fleet operators can tighten the thresholds for those metrics or they have the option to include additional metrics.

The information and knowledge that can be derived from fleet management solutions is vast and demonstrating this through pilot studies can give confidence to the board in their investment decisions, whether it is for a large or small scale roll out.

Individual metrics that can be monitored and measured through fleet management technology, leading to significant benefits, are:

Driver safety - Driver safety solutions monitor driving behaviour to help fleet managers protect their drivers and their vehicles when out on the road. If a significant driving event, such as harsh steering, sudden braking or speeding the in-cab device offers real-time alerts to the driver to encourage safer driving. Meanwhile, the back office is sent the driving data to be recorded and with the analysis at hand, recommendations on training can be made for individual drivers, resulting in fewer accidents and helping to manage the risks and costs associated with work-related driving.

A leading security solutions provider reported vehicle collisions and accidents as being a problem area across its fleet. In FY11 it reported that over 1300 repairs had been carried out on its vehicles due to motor vehicle accidents and over £1 million had been spent on repairs. Additionally, 51 vehicles had been written off and 131 days lost due to vehicle accidents accrued.

The company considered the deployment of driver safety technology and carried out a pilot study for three months to test its capability and measure the benefits across the business. Following the study, a marked improvement was recognised with an 18.5 per cent reduction speeding tickets, a 50 per cent reduction speeding events and a staggering 58 per cent reduction in driver caused collisions. A 5 per cent reduction in fuel costs had also been reported over the pilot period.

Fuel consumption – Fleet management technology allows businesses to optimise schedules and route planning, helping to reduce unnecessary mileage and improve fuel efficiency and driver proficiency. As a result, fuel consumption can be reduced by up to 22 per cent, unauthorised vehicle use can be mitigated and vehicle idling times can be lowered by up to 90 per cent.2

A leading animal welfare charity deployed fleet management technology as part of a pilot study across a fifty vehicle fleet and identified a number of problem areas. Utilising fleet management trip reports that detail fuel use based on travel and idle times, it found the cost of engine idling to be at 213 litres or £255 per week at a cost of £1.20 per litre. Resultantly, the environmental impact of this was estimated to be an additional 496 Kg of CO2 per week. Following the pilot, the charity invested in a full technology roll out and now boasts an annual fuel saving of 80,000 litres and CO2 emissions savings of 60,500kg through eliminating engine idling.

Vehicle utilisation and productivity – Fleet management technology provides real-time visibility into the location of a vehicle on the road which can help make more informed decisions in the planning and allocation of work across a fleet. Fleet managers are also able to pick up on any vehicles that are being under-utilised and what vehicles aren’t being used at all, helping to increase efficiencies and reduce operating costs. Such technology has proven to improve fleet utilisation by up to 32 per cent3 and productivity by up to 9 per cent.4

A leading document destruction company deploying fleet management technology has been able to reap the benefits of these capabilities. The technology has helped them to increase efficiencies, leading to an 8 per cent growth in the business, achieved without introducing any additional vehicles to the fleet.

Vehicle and operating costs - It is common knowledge that regular services and efficiently maintaining vehicles help to extend life and preserve assets. However, vehicle diagnostic solutions take this a step further, providing real-time data so information can be drawn directly from the vehicle. This helps to improve vehicle maintenance, service scheduling and uptime by getting fault codes and alerts about engine difficulties before they become a major problem. Exact fuel use can also be monitored helping identify where fuel is being wasted on poorly performing vehicles. For example, Goodyear Dunlop estimate that tyres account for up to 20 per cent of a car's fuel efficiency, so keeping them in good condition can help maintain fuel expenses.

Managing business change

Business transformation change and the deployment of new technology is always daunting and deploying fleet management technology successfully across a business requires achieving positive behavioural change. To achieve this, it is of the utmost importance to involve the workforce in every aspect of a roll out from start to finish. This will enable them to understand the technology completely and the benefits it brings to the business and themselves.

Companies with a mobile workforce tend to find that their staff are more accepting of new ways of working, quite possibly due to the very nature of how they work, and this was reflected in Trimble’s ‘Road Ahead’ report which found that just 22 per cent of those managing mobile workforces saw resistance from staff as being a major problem when rolling out new technology. Managing change isn’t simply all about the deployment of new processes or technology, of course, but very much around how those processes and technology are applied on an on-going basis and how to achieve the best results time and again. Technology is the enabler, but the responsibility lies with the individuals.

Spend to save

Cost control is, and will continue to be, the number one priority for many organisations but when it comes to fleet management technology, investing in a solution and utilising it to its full advantage can pay dividends at a comparatively low cost. Pilot studies have proven that it is possible to generate an ROI within months rather than years, not just in terms of productivity and efficiency but in terms of the costs as well. For example, it is possible to firstly demonstrate how much a fleet is spending on fuel without technology in place, then how much they would save through deploying the technology and finally work out the difference in terms of costs saved.

1.The Road Ahead Report: The Future of Field Service Delivery, 2012

2.3 & 4. Aberdeen Group, 2012

Mark Forrest is general manager of Trimble Field Service Management (FSM)

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