For many businesses investing in a fleet management system is a recurring question. Most people managing multiple vehicles invest in some form of automation to help them keep track of their vehicles, drivers, jobs etc. but how do you decide if your business needs a fleet management system?
As Mace Hartley, Executive Director, Australasian Fleet Management Association, succinctly puts it, “One of my past roles was with a software solution provider for fleet management systems. It’s a game changer when you’ve got control of everything. Importantly, many organisations have a mixture of owned vehicles and operating lease vehicles and often those operating lease vehicles will be with multiple FMOs. So, you need your own system just so you can put your hands around all the assets you’re responsible for. I think investment in systems is paramount.”
It does not matter if your business operates a fleet of 5 or 5000 vehicles – a fleet management system will make it easy for you to manage it efficiently. It allows businesses to get complete oversight over their vehicles, drivers and ensures optimised usage of your vehicles.
Your business should invest in a fleet management system if it has following requirements:
Your business needs to manage its fleet remotely
Some businesses operate their entire fleet out of a depot with the fleet manager on-site, which gives the manager a complete overview of their vehicles. However, for many businesses, this isn’t the case, and fleet managers are required to oversee vehicles remotely. For example, fleet vehicles might be kept at an employee’s home or at an interstate office.
A fleet management system makes remote management possible. Instead of relying on the simplistic in-person system to monitor vehicles (e.g. service reminder stickers on windscreens), fleet managers can do so remotely by accessing a portal on a personal device any place, any time. This will become even more important as the COVID-19 pandemic continues to impact the way we work, and more fleet managers handle geographically dispersed teams.
Your business needs to cut costs
For many businesses, a fleet management system is an investment worth making and proves to cut costs down the line. Fleet management systems help to optimise routes, which reduces fuel costs; predict impending breakdowns, which reduces the likelihood of expensive repairs; and identify ways to make better use of vehicles, which reduces fleet downtime.
All these factors combined ensure your fleet management solution improves your fleet’s performance and delivers maximum return on investment.
Your business needs to improve scheduled delivery times
More than 60% of fleet managers say the inability of their field team to follow assigned schedules harms the business. One of the reasons for this is inaccurate estimated delivery times which can lead to customer dissatisfaction and affect the business’ reputation.
Failure to meet scheduled times can also lead to fines for businesses. Many big distribution centres offer small windows for delivery drivers to drop-off or pick-up goods (some as short as 15 minutes) and reserve the right to penalise the business responsible for fleet vehicles that complete their pick-up or drop-off outside the allotted time.
A fleet management system enables businesses to monitor live traffic conditions that generate more accurate Estimated Times of Arrival. In addition, the fleet management system offers route optimisation facility, which means in case of congestion, the system recommends the fastest alternatives to the desired destination. They can also automate communicating delays to customers, which helps to improve customer service and manage business reputation.
Your business wants to reduce its environmental impact
How a business operates its supply chain has a significant impact on its environmental footprint. And fleets make up an important part of a business’ supply chain.
Fleet management system helps monitor driver behaviour. Stop-start, inefficient driving generates more carbon emissions than smooth driving. A fleet manager can use the system to identify drivers for training to help inspire more environment-friendly driving habits.
Also, by helping to optimise routes, fleet management system ensures that vehicles aren’t spending any unnecessary time on the road, which further reduces emissions. It also helps find inefficiencies and could show that the fleet could run just as effectively with fewer vehicles. Of course, a smaller fleet means a smaller carbon footprint.
Your business needs to manage vehicle use and Fringe Benefits Tax
Many businesses provide company vehicles to employees. This is another form of a fleet that needs to be managed.
Fringe Benefits Tax (FBT) is charged to businesses based on the provision of company cars. Part of the FBT is calculated on the percentage of company vs private vehicle use. Fleet management system helps log and verify whether the vehicle has been used for work or leisure, through easily accessible vehicle trip history.
The system also removes the reliance on odometer readings provided by drivers, which is time-consuming and often inaccurate.
Managing your business’ total cost of ownership (TCO)
TCO is the cost of owning a vehicle from the time of its purchase until the time it is disposed of by the owner. It includes all expenditures from the capital cost of buying or leasing a vehicle to running and maintaining it.
The components of TCO include but aren’t limited to:
- Fixed costs: Depreciation, admin fees, insurance, registration and taxes, operating costs
- Operating costs: Fuel, oils/fluids, tyres, maintenance
- Incidental; cleaning, parking, tolls, infringements, accidents, interior upkeep and accessories (floor mats, seat covers, etc.). Being aware of your total ownership cost is critical to a successful decision-making process as part of managing your fleet.
TCO is useful when making decisions around:
- Budgeting and planning
- Asset lifecycle management
- Vehicle selection
- Vendor selection
- Lease vs buy decisions
A fleet management system which gives you an overview of all your vehicles and their level of utilisation can give a fair idea on how to manage your existing ownership costs and plan and budget for any new purchase or leasing decisions as part of your growth strategy.
A fleet management system provides a macro view of your fleet and allows you to track and report your key cost centres against your fleet’s KPIs.
- Ensures your data is accurate and stored in a centralised place.
- Automatically captures expenses including recurring expenses where possible
- Calculates vehicle cost per km and overall TCO
- Builds/utilises reporting that informs utilisation and replacement planning
Every business has unique needs. You must find a system that caters to your individual business needs and sits within your budget. Most fleet management solutions in the market today offer a range of services, and you get access to a host of features.
The best fleet management system is one that can cater to your individual business needs, provide you with insights which will help you increase fleet utilisation, streamline processes, avoid vehicle downtimes, reduce administrative paperwork, and improve your overall profits.
Often fleet management systems come with a rich and complex features list, many of which may not be relevant or used by your business.
Find a system that works for you and is customisable. Choosing a provider who allows you to select the features you need and only pay for those will help reduce your costs.
Having a solution that can cater to your intrinsic business needs will ensure a better return on your investment and deeper adaptability within the organisation. Find a fleet management solution provider who can partner with you in developing these features for you. The best solutions are always those that are designed for your business and provide you with a custom user experience.