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Data Points

Don’t Let Budgets Block Telematics

August 6, 2015, by Dylan Brown - Also by this author

Chart shows the percentage of the customer base for seven major telematics providers that realized ROI within six months. Each green bar represents the average of a provider’s customers.
Chart shows the percentage of the customer base for seven major telematics providers that realized ROI within six months. Each green bar represents the average of a provider’s customers.

Automotive Fleet and Bobit Business Media sent out a comprehensive telematics survey a few weeks ago, and I analyzed the results to put together a detailed report.

One of the more interesting facts about telematics usage in the fleet industry that I picked up, while engrossing myself in the data, is that budget is the biggest barrier to adoption for most fleets. This by itself may not be very interesting to anyone who has had experience with telematics in the fleet industry. It can be difficult for a fleet manager to show how many benefits telematics provides to make it worth the often-steep-upfront cost combined with monthly or annual fees.

The issue lies in the fact that fleets are rarely considered as part of the revenue generating side of the business. Instead, many executives would prefer to manage their fleet as cheaply as they can, and regard it as a necessary evil and a cost of business. The issue gets exponentially more difficult on the government side, as the fleet managers for cities and counties must get large expenses approved by a never-ending chain of bureaucrats and politicians more concerned with their next election than approving more expenses for their fleets. Many of these fleet managers are hesitant, or unable to adopt, due to budget constraints.

At this point in time, fleets can no longer afford not to adopt. The return on investment for fleets should be one of the key considerations when researching providers, and many of the leading providers boast impressive statistics such as 65 percent of their customer base realizing a ROI within six months, and 91 percent seeing a ROI within a year. Over half of the fleet industry currently uses telematics. The fleets not using it lack crystal clear insight into their operations and start at a disadvantage.

Allow me to use an analogy to provide some perspective on how critical telematics will become to the fleet industry. Imagine a world 25 years ago without cell phones. Now that the telecommunications industry has dramatically evolved with an explosion in technological advancement, 98 percent of people today say cell phones have a positive impact on their lives. Many of us would be lost without them.

While that’s interesting, it isn’t quite wholly relevant to the fleet industry. The fact that 96 percent of a leading provider's customers said that telematics has had a positive impact on their fleet definitely is. Now you have the opportunity to join the elite club of first adopters of a technology that has the potential to revolutionize the world in the same fashion as the invention of the mobile phone.

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Author Bio

Dylan Brown

Analyst

Dylan Brown is a fleet researcher and regular contributor to Fleet-Central.com on topics such as telematics, predictive analysis, fleet leasing, and brand identification.

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