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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.
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.
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.
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
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.
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.
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
There are dozens of fleet management solutions on the market with a variety of features for vehicle tracking, maintenance management, driver performance, and health and safety compliance.
Small businesses need fleet management systems that offer intelligent forecasting models to help them decide when they need to buy new vehicles as they grow. Their fleet management software should include cost management tools to help them lower their overall costs and highlight areas where they’re overspending. SMBs might also look for software that integrates with their dashcams or vehicle tracking systems to ensure driver safety while they’re out on the road.
Some options include:
Large businesses may end up with a lot of driver turnover, so it’s important that their fleet management software has features to counteract this. Driver performance features and robust planning tools can help you keep your drivers happy. Additionally, large businesses need real-time visibility into their fleet to ensure any maintenance is performed timely and all vehicles are where they should be.
Some options include:
Overall, fleet management systems should make it easier for businesses of any size to scale their fleet as their business grows. Machine learning capabilities should be incorporated to improve insights and quickly identify issues within the fleet.
Some options include: