How fleet management systems can keep contractors safe and save companies money
In 2012, the average auto collision claim was $2,950 and the average auto liability claim for bodily injury was $14,653, says the National Highway Traffic Safety Administration. In accidents involving large trucks, there were 3,921 fatalities and 104,000 people injured.
These accidents were caused by a number of reasons, most of which were preventable — had the correct precautionary methods been taken. For plumbing and heating service companies, one method to help prevent accidents is to install a fleet management system.
These systems can improve driver behavior and safety, as well as reduce fuel and maintenance costs. “In the past, ‘How’s my driving?’ stickers have been used as a common method to finding out driver behavior,” says Ryan Driscoll, director of marketing for GPS Insight. “Fortunately, GPS technology has replaced this method to give more information on driver behavior.”
Rather than relying on others to inform owners how their employees are driving, owners can see for themselves. “Driver scorecards are a top interest of customers,” Driscoll continues. “They want to monitor and coach behavior such as speeding, idling, fast acceleration, hard braking, drive time, miles driven, etc.”
The fewer miles people drive, the more likely they are to be safe and the less likely they are to be involved in incidents. However, that is not the only reason business owners want to improve driver behavior. “Consumers look at the vehicle on the road as a sort of driving billboard,” explains Todd Ewing, director of product marketing at Fleetmatics. “It’s obviously unsafe to be speeding, but it’s also a reputational issue and consumers take both of those into account.”
Other services that can be automated with fleet management systems are time tracking, scheduling, reporting and unsafe driving alerts. “Panic buttons can be used by crews to alert management of a situation,” Driscoll adds. “Management also can divert drivers away from bad weather or other hazardous conditions.”
Companies improving driver behavior by minimizing the miles driven, reducing excessive speeding and harsh acceleration/deceleration, etc., are likely eligible for reduced insurance rates.
“GPS-based fleet management systems provide hard data that insurers can use to justify discounted premiums for those fleets that deserve them,” says Harold Leitner, vice president of business development at GPS Insight. “The amount will vary based on a fleet’s risk profile, but those that qualify typically save 5% to 15% on their premiums. Some fleets may see their discounts increase over time as they demonstrate better management of risk factors.”
Some fleet management companies partner with insurance companies to get users exclusive offers. Teletrac’s involvement with Liberty Mutual allowed their users to save 15% off their premiums. “There will be more incentives coming, but insurance companies are still figuring out what data points are important and how to properly model this data,” says Jon Verhaeghe, vice president of enterprise accounts at Teletrac.
He suggests the best thing for a service company to do is to tell the insurance agent it has a fleet management system and show all the data the system collects.
“Insurers in general have about 40% of discretionary credits that they can provide to reduce premiums,” says Verhaeghe. “These can be based on any number of things, including GPS tracking. So while no formal or written discount may be in place — the underwriter can deem the use of telematics as a reason to provide a lower premium.”
In addition to tracking, many fleet management systems offer driving scores, which also can help when talking with insurance agencies.
“Our core solution remains a vehicle tracking component that allows managers to see where vehicles are in real time and report on their history, their key metrics, their fuel efficiency, and the driver’s productivity and safety,” Ewing says. “We developed a safety score card that factors in all those things into one number. A score of 100 represents a really great driver and zero represents someone like Evel Knievel. Our customers don’t have to look at five different reports; the score gives them one number they can count on to sum up their technician’s driving skills.”
The driver safety analytics feature inside of the Teletrac Fleet Director also measures and scores an individual’s driving habits. “Driver-safety scorecards and driver-safety programs have been a ramping trend among customers,” notes Dennis Jaconi, senior manager at Teletrac. “They use the data to reward the safest drivers of a fleet and take action with those who are continually displaying unsafe habits on the road.”
Another trending feature within safety analytics is the Event Replay Viewer, allowing users to replay unsafe driving events — meaning a fleet manager could sit down with a driver and watch the incident as it happened.
Avoid last-minute repairs
Being aware of unsafe driving conditions and reckless driver behavior is the first step in preventing an accident. The next step is truck maintenance. Making sure a truck is fully operational will save business owners money in last-minute repairs and lost calls.
“Keeping up with vehicle maintenance will increase vehicle lifecycles and also prevent any dangerous situations on the roadway,” Driscoll explains. “Users can schedule reminders for any type of service or maintenance needed, and view upcoming and overdue maintenance on-demand.”
This feature provides owners with accurate mileage for their vehicles and saves them time from going vehicle to vehicle to manually log miles. Because it is done in a manual fashion, Ewing notes most owners/contractors say due diligence on maintenance is one of the biggest things they know they can improve on.
“Automating that can save them a lot of time and money — not only in terms of large-scale repair work they may not have to do, but also in keeping their vehicles on the road,” he says.
If a contractor wants to have the company’s vehicles’ oil changed every 3,000 miles, he can go into the system and set up which vehicles to be included in this service and when the service was last performed for each vehicle. He then sets the timer for the next time the oil needs to be checked again. Once the service is complete, the information is entered into the system, along with the cost and location.
“By tracking not only when you did the service, but how much it’s costing you, you can find out if there are any vehicles costing you more in maintenance than others and if that is a vehicle you need to take out of service,” Ewing adds.
Another way to ensure the safety and longevity of vehicles is to have the system integrate with the vehicle’s electronic control module. “Our system provides direct visibility into engine performance — including major statistics and fault codes — collected via a standard J-Bus or OBD-II connection,” Jaconi explains. “This allows potential vehicle breakdowns to be diagnosed before they happen, reducing unnecessary costs and repairs.”
Return on investment
One reason to own a fleet management system is visibility. “Knowing where everyone is at any time gives peace of mind to business owners,” Ewing says. “It allows them to be more efficient in how they are dispatching work and in following up with how work is going in the field.”
The high cost of fuel is another reason. “Fuel savings is a huge part of the return on investment for our system,” Ewing continues. “People recognize where extra miles are being driven or when the vehicle is left on outside of a job for a significant amount of time — when you are burning fuel you wouldn’t need to.”
Fleet management systems automate the hours and miles a person has been driving and can alert service and dispatch managers if the preset limit is reached.
“We have certain alerts that we have set and one of them is an ‘Odd Hours Report,’” says Tami Gurka,dispatchmanagerat Gilbert, Ariz.-based PlumbingMedic. “I am emailed every morning if one of our fleet vehicles was operating during off-peak hours. One morning that report came in and we noticed that a tech, who was not on call, had driven 500 miles in one night. Without fleet management, this might have not been caught or at least would’ve taken a while to catch.”
Productivity and payroll also are deciding factors, as illustrated with Gurka’s Odd Hours Report. Contractors can move away from paper time sheets and use the time card reporting function of fleet management systems to identify where there is excess overtime.
Monitoring driver behavior overall can assist owners in training their employees to operate the equipment in a cost-effective manner, notes Sean Taylor, senior sales consultant at Collective Data, a fleet maintenance and asset management company.“The top reasons we see contractors using fleet management systems are to maximize their investment of the vehicles; decrease the amount of money spent on repairs and reduce downtime; efficiently manage parts inventory, warranties and core charges; and gain the reporting needed to manage efficiently, spot trends and make better decisions regarding ways to cut costs and justify expenditures.”
For most users it is a combination of all these reasons. “We chose to install a fleet management system for a few reasons: efficiency with our dispatchers, accountability to our techs in the fields, and peace of mind in knowing where our fully stocked and loaded trucks are at all times,” Gurka says. “Our drivers are more aware and cautious because they know they are being watched. It keeps them honest.”
Checking these reports can be done on a computer, either in the office or in the cloud, but more fleet management companies are offering mobile apps to users.
“We have dedicated iOS and Android apps for customers to use so that a supervisor in the field can see where vehicles are going,” Ewing explains. “They also can get dashboard reports and alerts — such as when the vehicle is speeding or idling too long — and view trends for their fleet over time. We find some occasions where the traffic through our mobile app rivals even our web-based core platform. Mobile has really gone in our industry from being sort of nice to have to being a key interface.”
Jaconi agrees: “Trends in the market are definitely around mobility and driver/vehicle behavior data. With the evolution of mobile devices, companies need the ability to manage their fleet wherever and whenever. Having a system that is 100% functional on mobile browsers is crucial.”
The mobile platform has been a benefit in regards to log book hours as well. “Our app allows users to log in and put themselves into an on duty/off duty driving status,” Ewing says. “It connects to the vehicle and automates a lot of that for them and it reduces a lot of headaches because until now people have had to manage this on a paper log. It can be a real nightmare for auditing purposes, too. Also, if they get pulled over and they are asked to produce a log, the app makes it really easy.”
Feels like Big Brother
Although there are many benefits to fleet management systems, there also are a few obstacles. These complications range from employee pushback to finding the right partner and making sure the software is used once installed. Various surveys done by fleet management companies say because of these complications, only 12% to 37% of service contractors use fleet management systems. Although the estimates vary greatly, providers agree that it is under half.
“It’s still a pretty under-penetrated market,” Ewing says. “I think sometimes people get worried about the driver reaction. However, there are ways to roll this out that won’t make the driver feel as if someone has got an eye on him all day.”
Ewing notes in any given company only about 20% of technicians show a need for improvement. However, that small percentage can stand out and be demoralizing to the other team members.
“By putting in the vehicle tracking system, you are really just leveling the playing field and holding your technicians accountable for their work,” he says. “We find the companies that take that approach can reduce that ‘Big Brother’ mentality and focus on the metrics and the productivity of what they can get out of it.”
Fear of change is another obstacle preventing owners from installing such systems. “I am continually surprised with the amount of organizations, large and small, that still use whiteboards, pen and paper, or Excel to manage their fleet,” Taylor says. “Organizations that have done something a certain way for years are uncomfortable with changing, even if it benefits them from a productivity and monetary standpoint.”
The transition can be difficult for some companies. “These systems can give you a lot of great information, but it can be a lot to try to do all in the first 90 days of buying,” Ewing says. “So we tend to coach customers to focus on one key area of the business — maybe it’s fuel savings first and then working their way into productivity and safety over time.”
When people buy new software, they are often concerned about time management as well. Most software is designed so users don’t have to spend a lot of their day in the system. “I think it’s important for contractors to know that sometimes there is some apprehension to get into more and more software,” Ewing continues. “A lot of our customers are not IT tech folks and we’ve designed around that. Users can log in for five, 10 or 20 min. at a time, find something interesting, take a piece of data, go talk to somebody and change their business.”
Driscoll advises owners do extensive research and have a well-planned implementation strategy to minimize any obstacles.
For those companies unsure of how to get the best out of a fleet management system, the Fleet Safety Institute provides companies with a comprehensive approach to fleet safety and risk mitigation. Its program offers fleet compliance, consulting, training, critical Department of Transportation resolution matters, and advanced technology to improve business processes and driver safety.
A lack of understanding of vehicle safety often translates to higher-risk driving because drivers fail to see the consequences of their actions.
“It is not uncommon for some drivers to feel that the pressure of being a productive employee outweighs the need to remain safe while driving,” says J. Kimo Ketner, vice president of FSI. “Improving driver awareness and knowledge allows them to make better informed choices and often encourages them to voluntarily and willingly make positive changes, ultimately reducing the risk they pose to themselves and others on the road.”
Many technologies are available that can assist with this, such as collision warning and auto brake systems, lane departure aids, parking assist systems and driver alerts — all of which are “great to have in a fleet management system,” he adds.
Another educational tool contractors and business owners can use is Leah Readings’ “Expert Guide to Buying Field Service Management Software” eBook published through Capterra, a free-service website to help businesses find the right software. It offers an online directory of business software solutions and provides advice, buying guides, blog posts and reviews to help businesses determine which software solution is best for them.
Readings, a software analyst with Capterra, wrote the eBook to educate buyers so they could make the best purchase decision for their companies. It was put together by researching features and statistics, and going over interviews to determine best practices for purchasing and typical costs.
The road ahead
The future of these systems lies in two directions — driver centric and vehicle centric.
“Because many technicians drive multiple vehicles, GPS Insight will continue to focus on driver-centric reporting as opposed to vehicle centric,” Driscoll comments.
On the other hand, some companies believe the future lies on the data end. “In my opinion, the future of fleet management will be more about analyzing data and making adjustments to your operations to bid more effectively, increase your serviceability, reduce cost, and extend the life and value of your assets,” Taylor says.
For some fleet management companies, the future lies in integration. “I think we’ll continue to see more and more integration among systems,” Ewing notes. “More and more people are becoming aware of the connections they can have. They are asking: ‘Why can’t this tie into my CRM?’; ‘Why can’t this tie into my work-force management system?’; and ‘Why can’t it tie into my payroll system?’ A lot of good, objective data is available from vehicle tracking and sharing that across your organization in many different kinds of software would be where this continues to go.”
Others see the future as a mix of deeper data and more integration. “I’d say we’re going to see a steady increase of big data and how it can be used to cut fleet costs,” Jaconi notes. “Also, I imagine an influx of more integration with key third-party business applications — having one comprehensive management system as opposed to five or six.”
Choosing a partner, and not just a provider, is key to the success of a project. “Make sure the fleet software will meet your needs today and well into the future,” Taylor comments. “It must be easy to use, flexible for your business environment and contribute to your bottom line.”