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February 8, 2016 4:00 AM, EST

Opinion: Telematics Investment Requires Due Diligence

This Opinion piece appears in the Feb. 8 print edition of Transport Topics. Click here to subscribe today.

 

By Jim Griffin

Chief Technology Officer

Fleet Advantage

Transportation and fleet managers have wrestled for years with the cost versus benefit of incorporating telematics on their trucks. The term telematics derives from the combination of telecommunications and informatics and represents a variety of devices also known as onboard computer systems. Although telematics devices have been around for decades, the percentage of Class 8 tractors outfitted with them ranges between 27% and 40% — percentages that speak volumes about the perceived value of telematics.

Now that the electronic logging device, or ELD, mandate is being placed into law, fleet managers who have yet to incorporate telematics are being forced to make an important initial decision: Do I view the telematics mandate as a “necessary evil” and spend the least amount to meet compliance, or do I go “all in” and realize the value of the data that it provides?

Amid the overload of applications, hardware and services available in the ever-changing telematics world, deciding on the range of system functionality and associated costs can be overwhelming. This can be especially true for fleet managers who have not yet immersed themselves in telematics research — and I can say with confidence that a lot of research must precede a decision. Pricing for hardware can range from free to several thousand dollars, while functionality can range from basic GPS tracking to a fully integrated, mobile-asset management system. The new mandate will be a key factor in the decision of which system to choose. With options on vendors, applications, features and costs, where do you start?

First, you need to recognize that decision time has come, and you must take action to be compliant. Factors that must enter into this decision equation include hardware pricing of the newly available and enhanced data sets you will need and financing options. Thinking strategically about the data you need to manage your fleet’s performance, your drivers’ behavior and vehicle life cycle options ultimately will pay off in improved fuel economy, lower operating costs and improved driver retention. So a thorough and methodical due diligence approach is recommended.

So now what?

Now that you know that a decision is imminent, what do you do? If you are a fleet manager venturing into the telematics landscape for the first time, you need to understand that this is a journey for your organization, as the data and reporting options available to fleet managers can be as overwhelming as choosing the best service provider. It is an onerous task to simply digest the tidal wave of functionality and data that will be available. So you need to establish and prioritize your needs to understand the telematics value proposition.

Second, you need to choose a provider or partner that is there for the long haul, that has the ability to support your organization and your fleet well into the future. A shortsighted decision to simply meet the ELD mandate without understanding the “actionable data potential” for greatly reducing operating costs is ill-advised. Since you must make the investment per the ELD mandate, the incremental costs to acquire systems and services that provide additional data and applications to modernize your fleet are minimal and the return on investment is substantial.

By attempting to minimize your initial step into telematics too much, you will find that, in the long run, you will have lost substantial operational savings and actually increased your costs by not having access to decision-making data that can assist in optimizing your fleet’s performance and safety. For example, at Fleet Advantage, we have found that by using the right data to monitor only fuel economy, a tractor’s performance can be increased by 5% to 12% on average and more in some cases. That can be thousands of dollars of savings per year for each tractor.

Is it more than just the technology?

The selection of your telematics product and partner goes beyond the technology. Let’s be clear, these systems are much more complicated than they get credit for. These systems are inherently challenging and, because no two fleets operate the same, there will be additional challenges. Your technology selections need to be determined by answering these important questions:

• Is the technology limited to meeting only my current needs to be compliant with the ELD mandate?

• Does the technology allow for easy access to reliable applications and reports that can provide actionable information for improving my fleet’s operating performance and safety?

• Does the technology provide a growth path to leverage the value of predictive and descriptive diagnostics? Many providers will tell you they are providing it today. However, this is an emerging area that no doubt is in its infancy and will continue to evolve. Don’t get left behind by choosing a limited technology partner.

• Does the provider have the resources, understanding and cultural climate to navigate this journey with your organization and be a true partner?

Although the thought of implementing the new ELD mandate and a telematics solution can appear to be overwhelming, the benefits of doing so will be well worth the investment of cost, time and effort.

Fleet Advantage is a leading innovator in truck fleet business analytics, equipment financing and life cycle cost management. For more information, visit www.FleetAdvantage.net.