Telematics puts companies in the driving seat

Telematics may not be the sexiest word in the technology lexicon, but it has the power to significantly improve the bottom line for companies of all sizes. By tracking and monitoring their vehicles, companies can improve customer service, become more efficient in route planning, meet delivery times, reduce insurance costs and improve the performance of their fleet over time.

Although it has been around for a very long time, telematics is essentially part of the internet of things (IoT) technology family. It combines in-vehicle GPS tracking systems with communications technology to collect and send data about driver and vehicle performance such as location, speed, acceleration, fuel consumption and rest periods. And the rapid pace of technological development has now brought this powerful business tool within reach for SMEs.

"It is no longer just a monitoring solution for companies with large fleets of vans, trucks or minibuses," says Myles Gardiner, IoT manager with Three Ireland. "In fact, telematics has benefits for companies with just a few drivers on the payroll. The systems vary depending on their complexity, but there are affordable solutions for businesses of every size."

Installation

Getting started with the technology is quite simple, according to Gardiner. “Entry-level telematics solutions for SMEs are often just a matter of a few minutes’ work to plug a tracking unit into a port on the engine management system,” he says. “Even if there is a small up-front cost for the device, the fast installation time means a telematics system quickly starts repaying the investment for the owner.”

Among the chief benefits of telematics is improved customer service through more accurate and reliable delivery times. “Many telematics solutions include a route planner that plots the most efficient route for a driver,” says Gardiner. “This increases the likelihood of on-time delivery, more often. This is critical for efficient customer service. Suppose the delivery involves a component that’s needed to start manufacturing, or materials required for building work. In either scenario, on-time delivery is critical for the end customer, since failure to start work on time could have financial implications.

Because the telematics solution records all driver journeys in real time, automated alerts can be set up via SMS message to inform customers when the driver is expected to arrive. “This technology is already in use by public-transport companies who use it to let customers know when the next bus or train is due to arrive,” he adds.

Staying on the right side of the law is another benefit. Under European Union law, professional drivers using large goods vehicles (3.5 tonnes and over) or passenger vehicles able to carry more than eight people must take proper rest periods at prescribed intervals. Companies can use the data provided by telematics systems to prove they’re complying with the regulations and to ensure that their drivers are taking adequate rest periods.

Reduced premiums

Improved driver behaviour and reduced insurance premiums are other positive outcomes. “Telematics solutions can also identify poor driver behaviour like harsh acceleration, braking and cornering, or excessive engine revving,” Gardiner explains. “This information is made available to the fleet manager or business owner who can provide specific feedback to drivers to help them improve their performance behind the wheel. The insurance company also has access to this data, and will reduce their premiums accordingly, since safer driving leads to fewer claims. It’s a win-win. The business gets improved drive and vehicle performance along with substantial cost savings for the business on insurance premiums.”

That leads directly to reduced wear and tear on the vehicle. “Vehicles last longer and lose their value over a longer period,” he notes. “Furthermore, the system can’t be tampered with, so it provides independent proof of mileage, increasing a vehicle’s value when it’s time to trade in for a newer model.”

The icing on the cake is a significant reduction in fuel bills. “At the start of the working day, the built-in route planner takes the addresses of each planned delivery or collection and considers factors like traffic flows or roadworks to calculate the most effective route plan,” says Gardiner. “The benefits of efficient route planning are significant. They allow a driver to make more stops during the working day, or else spend less time on the road depending on what the business needs. Route-planning tools can improve efficiency by up to 20 per cent - even among experienced drivers who know the routes.

“For any business that needs to keep vehicles on the road, two of the highest costs are employing a driver and fuel. In that context, telematics has the potential to deliver very substantial cost savings and to become self-financing very quickly.”