How Do I Choose the Right Telematics Company
By Michael T. Sprouse, President G&A Research, Inc.
I was reading a copy of Fleet Owner magazine the other day, trying to
make sense of the world of telematics, and lo and behold; I received a
call from an old fleet client of mine that I have done consulting for
several times over the past few years.
“What can you tell me about telematics?” Jim asked of me.
Trying to buy some time so that I did not sound unprepared for his
inquiry, I responded with my patented, “Jim, could you please clarify
the nature of that question. There are many answers to that.”
Having deflected the conversation and bought some time to collect my
thoughts, my friend, who owns a beverage company, with a fleet of 250
trucks, went on to say that, while he believed that telematics time has
come and realized that he needed to make the move to reduce his
operational expenses and get a handle on the overall management of his
assets, his concern was over…”How do I BUY telematics and what should I
look for in a company?”
Trying to sound like the ever wise and knowledgeable oracle of fleet
management solutions, I replied, “Ahhh Jim, you have stumbled upon one
of the great mysteries in the modern-day telematics that holds as many
theories as a government conspiracy. Let me get back to you in a few
weeks and give you a thorough report, so that you can have enough
information to make the right choice for your company.”
My journey for the proverbial “Arc of the Covenant” led me to
interview several fleet based companies of various industries, from
trucking to sales organizations and fleet sizes of 30 to 1200 vehicles,
as well as ten telematics companies, all of which were “pioneers” and
self-described “industry leaders”.
Allow me to digress.
First, it is important to look back and reflect on the fleet based
telematics market and how it has evolved to this point and is beginning
to approach critical mass.
For the purpose of this article, I will take a “Telematics for Dummies” approach.
Much like technological innovations that hit the market every few
years and spawn a host of companies looking to cash in on the “Gold
Rush” of that industry, telematics really burst onto the scene about
three and a half years ago.
And much like the previous races to acquire market space, a whole
plethora of “pioneers” aligned themselves with an OEM and set out to
grab as much market share as possible.
Companies began assembling sales teams, armed them with marketing
lists that divided the country up into territories, and began calling on
companies that met certain fleet size criteria.
If your company had a fleet size of 100 vehicles or more, you have been called once for each of those vehicles, if not more.
Telematics was a new and shiny toy that carried the promise of
reducing fuel budgets through decreased idling times and safer driving
habits and was very attractive to companies looking to reduce
operational expenses.
The asset management aspect of keeping tabs on all of your vehicles was very appealing as well.
Once a web demo would show all of a companies vehicles and give a CEO
or fleet manager the vision of how they could keep an eye on all of
their employees, a company would then sign a three-year agreement with a
telematics provider, have a solution installed and then begin trying to
make sense of the myriad of data that began flooding the fleet managers
desk top.
While many companies could see the advantages of telematics and the
financial impact that a properly run system could provide, a majority of
companies, over the past three years chose to take a “wait and see”
approach, either believing it sounded too good to be true, or not
willing to part with financial resources due to the precarious state of
the economy.
Now three years later, the telematics industry is approaching
critical mass and the mountain of evidence is nothing short of
overwhelming.
In fact, as one CFO recently told me, “The very reason we did not
make the move, was the very reason we SHOULD have made the move. We
believe that waiting two years has cost us nearly a $500,000. That’s
money we could have used for marketing or other infrastructure.”
So with the mystery of telematics no longer unsolved, the only
question being asked now is, “What should I look for in a provider?”
What I found to be most interesting in my research of companies that
had purchased a solution, was not dissatisfaction in the technology or
the results but rather in their provider.
A common theme that I kept encountering was that once the contract
was signed and the support and the “romance” ended, they were stuck with
a solution that, while not as complete as they needed, still came with
three years of monthly monitoring fees.
As one of my clients remarked, “I was told that I was purchasing the
most complete solution, which I later found out that I wasn’t and then a
month later, I couldn’t find my sales representative with a search
warrant. Now I am stuck with minimal tech support and have to figure out
on my own how to maximize the capabilities. I don’t have time for that.
I have a company to run!”
His language was more colorful than that; however for the sake of this article……
So what I have compiled, after a couple of months of research which
included conversations with 18 end users as well as 10 randomly chosen
telematics providers is a helpful guide on how to choose a telematics
provider that will be right for your company.
I would like to point out that, I purposely do not mention company
names, as this paper is designed to simply be a guide based on my
research and not an endorsement of any one company or solution.
If you are a company owner or fleet manager, first of all, let me
start by saying, congratulations on making the conscious decision to
move your fleet into the world of telematics technology.
CEO’s and Fleet Managers for all companies reviewed have universally
seen and experienced, without exception, the impact of a successfully
implemented telematics program to an organization, from simply a fiscal
aspect to a safety and productivity bottom line.
However, it can be very confusing in the telematics world, with
hundreds of providers and as many solutions. I hope to be able to help
you in your decision-making process with this list of the most commonly
asked questions that Managers said that they wished they would have
asked or researched further before making their decision.
The following is a list of questions to ask you potential service providers and an explanation of why it is important to know.
Q: Are you partnering with a telematics company or a company that simply sells telematics devices?
A: There are many companies that simply sell devices and monitoring
but no real service and long-term support. Do you want to work with a
re-seller or a company that is constantly innovating and working closely
with you in partnership to insure that you maximize your ROI?
Q: Is your provider a local company that can work closely
with you and your team, even after you’ve signed the contract? Or will
your consultant, who is only an account rep, not be able to help you
beyond the signing of the contract?
A: This may seem redundant of the previous question, but it is
important to make sure that once you sign the contract, you are in
essence “married” to your choice for the next 3 years. You are going to
need help and support as you learn more about the capabilities of your
solution and how to use it within your company.
Q: Are future upgrades automatically included or are you
married to current technology for the length of contract…unless you pay
for an upgrade?
A: Ever bought the latest and greatest cell phone, only to have
version 2.1 come out 30 days later? Ten you know the frustration,
Technology is always changing and there is an old saying, “Today’s
innovations are will be out of date as of yesterday.” Telematics is no
different. It’s best to beginning to take advantage of today’s
technology with a company that provides free firmware and software
upgrades. Why wait 6-9 months for future advances when it is costing you
money today?
Q: Are they a “Plug and Play” solution vs. a “Wired In” Solution?
A: It was interesting how companies that don’t offer a “plug and
play”, will do everything they can to convince you that it could be the
death of your company if you choose to go that route. The truth is that
there are very good plug and play solutions that are fully robust and
give you everything you need. The long-term benefits are that there is
no installation costs (typically $100 per unit) and un-wiring and
transfer costs (typically $150). “Plug and Play” solutions make transfer
from one vehicle to another a 30 second procedure.
Q: Do the have “speed by street” capabilities?
A: Most telematics solutions offer a generic speed monitoring
solution. That solution usually only allows a fleet manager to establish
an interstate speed limit. The truth is that in today’s safety
conscious environment we live in, speeding on a residential or business
district street is even more dangerous that being 10 mph over the speed
limit on the interstate.
Q: Do they have “Anti-Texting” capabilities?
A: This really needs no explanation. When your company has an
accident that results in an injury or even worse, a fatality, the
victims lawyers will subpoena your drivers phone records and attempt to
match a texting incident or phone conversation to the time of the
accidents occurrence. At that point it is simply “Game Over” from a
financial perspective.
While every company I interviewed said that they had a “very strict”
no texting policy, none of the companies I spoke with had the ability to
enforce that policy, leading to the adage that “A policy that is
unenforceable is not really a policy”. And with today’s new texting
laws, your company could be subject to an $11,000 fine if your driver is
observed to be in violation.
Q: Do they have seat belt notification?
A: I found it very rare when speaking to telematics providers that
this feature existed but it in fact does. Obviously this is a safety
related feature and will please many insurance companies that recognize
the value of telematics in a fleet.
Q: Do they provide “real-time” ECM diagnostics?
A: Real time is just what it says…happening now! I spoke with a few
fleet managers that shared stories with me of solutions that saved
thousands of dollars in costly repairs by alerting them that there was
trouble beginning to emerge in their fleet and they were able to treat
the symptoms before they became illnesses that could shut down a vehicle
for days, if not weeks. Lost productivity aside, maintaining the health
of the fleet is just as important as maintaining our personal health
before an incurable illness occurs.
Q: Can they generate IFTA mileage logs and reports?
A: How important is this? I was surprised to find out that it was one
of the key benefits of a fully robust telematics solution. One fleet
manager informed me that by automating this process, he took one weeks
worth of effort, every quarter and reduced it to a few days for the
entire year.
Q: Do they have H.O.S. (Hours of Service) reporting capabilities?
A: This is important, especially for trucking companies that are
concerned with D.O.T. reporting. It’s also valuable from a productivity
perspective. As one Fleet Manager told me, “I like to be able to look
and see how many more hours my drivers have left so that I can make the
best use of our available fleet.”
Q: Is the product made in North America?
A: This comes down to a dependability issue as well as language and semantics of your implemented solution.
Q: Is design and manufacturing under the same roof?
A: An important characteristic of your telematics provider for the
purpose of innovation and expedition of those technological advances.
Q: Do they have a Software Development Kit (S.D.K.)?
A: Why is this important? No one fleet is exactly the same and every
fleet manager has different needs and desires. An S.D.K allows your IT
department to write code and interface with other applications that in
play in your fleets form Garmin solutions to snow plows and devices that
measure salt tonnage per street.
And finally…..
Q: Does your company have references…that you are familiar with?
A: In my research, I found that every telematics company I spoke with
had a ready-made list of references. However, upon examining those
lists, I realized that I had only heard of 1 out of each 10 that I was
given. I realize that there are companies such as UPS, Orkin, Frito Lay
and more that have devoted thousands of hours and months of test
piloting to determine the proper solutions for their companies. Before I
make an investment, or “go to the altar” with a provider, I want to
make sure that I am not their guinea pig.
I hope that this has been helpful to you and sheds some light on your telematics search.
While there are variables to every situation and probably no one
solution that is perfect for every company, it became my experience
through research and interviews that these are questions and
requirements that repeated themselves most often.
Michael T. Sprouse
President, G&A Research Institute
Cincinnati, Ohio
