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Fleet management software is built for organizations in any industry that manage large or small fleets of vehicles or other wheeled equipment. The software provides a centralized system for managing the vehicle lifecycle and vehicle drivers, from maintenance to fuel economy, dispatch, health and safety compliance, GPS tracking, and more. Although not as saturated as other business IT verticals, the fleet management market offers many different solutions that vary by features, pricing, and use intent.
In order to help decision-makers choose the best fleet management software, this guide will outline common features, software trends, tips for creating company buy-in, and a case study of a leading fleet management solution.
There are many different industries that rely on some kind of transportation infrastructure, such as manufacturing, supply chain management, and public transportation, to name a few. As these industries grow, so does competition between providers. Many organizations are adopting fleet management solutions as a way to improve operational efficiency, increase revenue, and gain a competitive edge. Increasingly stringent emissions regulations and rising fuel costs are also contributing to the need for centralized fleet management systems.
The global fleet management technologies and services market — which includes analytics, tracking, monitoring, telematics, and vendor services — was valued at $12 billion last year and is expected to grow to $35 billion by the year 2019, according to MarketsandMarkets.1
The phrase “fleet management” is often associated with the dispatch functions of large transportation providers, but in this case, it applies to a diverse range of tasks for any type of fleet vehicle, whether it be commercial 18-wheelers, “hot-shot” trucks, delivery vans, passenger buses, rental cars, or even taxi cabs.
Fleet managers can use the software to monitor driver performance (hard braking, idle time, late starts, speed limits, detours, etc.), reduce fuel consumption, plan routes, track health and safety compliance, and manage vehicle lifecycles from acquisition to disposal. Most systems also have built-in reporting capabilities that provide insights about high-level fleet strategy and asset utilization.
- GPS tracking/geolocation
- Regulatory compliance management (FMCSA, DOT, OSHA, etc.)
- Fuel management
- Scorecards (for measuring driver performance)
- Work order management
- Parts inventory
- Incident management
Fleet Management System Applications
There are a number of specific business contexts where fleet management software can be a vital tool for success. Desired features and system structure will vary depending on the kind of business you’re buying for. Here are a few of the most common examples:
Larger field service organizations often use fleet management software to provide greater visibility and maximize their use of fleet vehicles. Almost half of all service and manufacturing organizations say that “real-time visibility into service technicians, vehicles, parts, and resources” is a key component of improving overall performance.2 Most fleet management solutions for service companies include dispatch and work order management modules.
Public transportation buyers may include bus services, cab services, trolleys, rapid transit, or even airlines. Since public transportation is customer-facing, vehicle and driver safety are of paramount importance, as well as the ability to plan dynamic routes and collect fares on demand.
Logistics buyers may include delivery services (UPS, FedEx, etc.), supply chain managers, or third-party freight transporters. Since logistics firms are often directly accountable to vendors or clients, they’ll gain the most from solutions that provide real-time visibility of vehicle locations and status. Smart fuel management tools will also help compensate for the high volume of annual miles driven.
Construction companies (especially those that contract for public works, road repair, and commercial projects) often manage a fleet of heavy machinery, including bulldozers, excavators, steamrollers, and so on. Since these vehicles don’t travel long distances, most heavy-machinery solutions focus on maintenance, parts inventory, and compliance with safety and emissions standards.
Fleet Management Software Trends
To help fleet supervisors leverage their drivers as assets (rather than liabilities), software vendors are incorporating more out-of-the-box features for driver management. The most common example of this is “scorecarding,” which is a way of publicly measuring driver performance based on predefined metrics (mileage, braking, idle time, speeding, schedule adherence, etc.). These metrics give managers more concrete opportunities for coaching and ultimately lead to better driving habits. A workforce of better drivers can pay huge dividends, especially considering 20 percent of fleet vehicles are involved in accidents every year.3
Preventative maintenance through telematics:
Telematics refers to the use of embedded sensors to relay diagnostic, performance, and location data back to an administrative system. Many analysts consider telematics to be part of the ever-growing “internet of things,” which is currently 25 billion devices strong.4 In the world of fleet management technology, telematics are more frequently being used to support preventative maintenance strategies — e.g. remotely monitoring vehicle components for heat, vibration, pressure, etc. to predict malfunctions before they happen.
Rising fuel prices:
Since fuel expenses can account for as much as 30 percent of total fleet operating costs, even a small price hike can have an outsized impact on a fleet provider’s annual budget.5 That’s why almost all modern fleet management solutions provide tools for managing fuel economy, including consumption tracking, route optimization, local pricing finders, and custom reports. According to the U.S. Environmental Protection Agency, gentle acceleration and braking can improve fuel economy by up 33 percent.6
As is the case in many other business software verticals, cloud technology is making fleet management accessible and affordable for even the smallest companies. Instead of paying for an expensive, upfront license, buyers can pay a subscription price for on-demand access through the web. This pricing model is called “software as a service” or SaaS. Compared with more resource-intensive on premise solutions, SaaS also has the distinct advantage of requiring little to no IT maintenance.
Creating Executive Buy-In
If you’re leading the initiative on software procurement, you’ll need to build a compelling business case that “sells” vehicle fleet management software to its future stakeholders in the company. That means your executive leaders need to agree with the need for new solution and the value it will add after implementation.
One of the best ways to prove a new system’s value is to match its features with existing pain points and business goals. For example, if you’ve been blowing the budget on maintenance costs, but your fleet vehicles are still breaking down before they’re supposed to, you can demonstrate how preventative maintenance and vehicle lifecycle management features will reduce downtime and stretch asset life to its maximum potential.
Your CEO is likely interested in opportunities to expand your company’s presence and create new revenue sources. You can explain how territory management and geolocation tools support greater dominion over regional markets. Your CFO, on the other hand, will be more interested in specific numbers. Try to come up with a projection for return-on-investment (ROI), based on anticipated savings from reduced downtime, maintenance cost, improved fuel economy, and driver performance.
For example, did you know that excessive idling costs the U.S. 6 billion gallons of fuel and $20 billion per year?7 Or that if a fleet of 300 vehicles adds even one mile per gallon of fuel economy, it could save $54,000 in the course of a year?8
Fleet Management Software Case Study
Solution: Dossier Systems
Organization: City of Lemoore, California9
In 2008, the City of Lemoore, California was managing a fleet of over 200 municipal vehicles, including police cars, pickups, and heavy trucks. Even with a team of only three full-time mechanics, their fleet maintenance expenses surpassed budget by $50,000 to $70,000 a year. The Lemoore city manager brought in a project planner named Jason Shaw to assess the situation.
Right off the bat, Shaw noticed some serious issues. The city wasn’t factoring overhead into their billing costs, and none of their workflows were standardized between mechanics. After interviewing everyone in the department, Shaw set up demos with nine different software vendors and eventually settled on Dossier, citing ease of use as one of the main deciding factors.
The City of Lemoore now uses Dossier to account for maintenance hours, import data from fuel vendors, manage inventory, and set up preventative maintenance intervals. A year after implementation, Shaw reported a number of significant improvements:
- New insights on time expenditures led the city to transfer out a mechanic, yielding $70,000 in annual savings.
- 40 hours of monthly labor for fuel cost management now reduced to 20 minutes a week, an estimated savings of $9,000 per year.
- Better inventory management (having the right parts on hand, ordering in bulk) saves $4,000 per year.
- Preventative maintenance reduces time spent on corrective maintenance from 50% to 20% and extends the usable life of all vehicles.
Other Leading Fleet Management Solutions
While Dossier worked well for The City of Lemoore, it’s not necessarily the best fit for every organization. There are dozens of other solutions on the market with a variety of features for vehicle tracking, maintenance management, driver performance, and health and safety compliance. Here are a few of the most popular:
Choosing the Best Fleet Management Software
At TechnologyAdvice, our goal is to connect businesses with the technology that best meets their needs. We’ve compiled product information, reviews, case studies, features lists, video walkthroughs, and research articles on hundreds of leading IT solutions, all to make the buying process more straightforward for decision makers like you.
If you’re curious about any of the fleet management solutions listed in this guide, we’d love to talk to you. Call one of our experts for a free consultation, or use the Product Selection Tool on our site to get a personalized recommendation based on your industry and desired features.
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- “Fleet Management Market worth $35.35 Billion by 2019.” MarketsandMarkets. Acccessed June 17, 2015. http://www.marketsandmarkets.com/PressReleases/fleet-management-systems.asp
- “Field Service 2012: GPS and Fleet Management.” Aberdeen. Last modified August 2012. http://www.teletrac.com/teletrac.com/assets/aberdeen-%20research-%20pack.pdf
- “Driver scorecards improve safety and reduce operational costs.” Telogis. Accessed June 17, 2015. http://www.telogis.com/resources/driver-scorecards-improve-safety-and-reduce-operational-costs
- “FTC Report on Internet of Things Urges Companies to Adopt Best Practices to Address Consumer Privacy and Security Risks.” FTC. January 27, 2015. https://www.ftc.gov/news-events/press-releases/2015/01/ftc-report-internet-things-urges-companies-adopt-best-practices
- “Top ten ways fleet drivers can use less fuel.” Telogis. Accessed January 17, 2015. http://www.telogis.com/resources/top-ten-ways-fleet-drivers-can-use-less-fuel
- “The EcoDriver’s Manual.” EcoDrivingUSA. http://www.fs.fed.us/sustainableoperations/documents/TheEcoDriversManual.pdf
- “Reducing Vehicle Idling.” Argonne National Laboratory. Accessed June 17, 2015. http://www.anl.gov/energy-systems/project/reducing-vehicle-idling
- “13 Steps Management Can Take Right Now to Optimize Fuel-Cost Savings.” FleetFinancials. Last modified September 2011. http://www.fleetfinancials.com/article/story/2011/09/13-steps-management-can-take-right-now-to-optimize-fuel-cost-savings.aspx
- “City of Lemoore, CA Saves Money.” Dossier. Accessed June 17, 2015. http://dossiersystemsinc.com/case-study/city-of-lemoore-ca-saves-money/