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FLEET SOFTWARE: Finding savings with software

Date: 10 July 2012

At a time when funds are thin on the ground, shelling out for or upgrading a fleet software system may not be high on businesses' list of priorities, but there are cost and efficiency benefits of making that investment, reports Jack Carfrae

Penny wise, pound foolish is an over-used cliché in business circles that seems to be ignored as regularly as it is heard, and attempting to get senior management to free up some additional funding in order to ultimately operate a fundamental part of an organisation more efficiently is a hefty task, even if the benefits will ultimately pay off.

The unspoken rule is to sell an idea to bosses as a business case. If you can prove that the savings and efficiency gains will outweigh the cost then chances are you're onto a winner.

That's where fleet software makes sense. Yes, there's a price attached to it, and it isn't a case of buying something off-the-shelf, but the ability to know how much you're spending, on what and how to cut it back, is invaluable, as is keeping an eye on other aspects of fleet operation.

Neville Briggs, managing director at CFC solutions, claims that the overriding purpose of a software system is to allow businesses to both monitor and take control of their fleet: "The modern fleet is so sophisticated - in terms of cost control, duty of care, the environment and overall efficiency - that a dedicated software system provides the only way to monitor the performance of your fleet in every key area and identify where management action needs to be taken. In this way, any investment in fleet software is usually recouped very quickly."

The obvious element that can be monitored and subsequently cut back on is fuel spend. Use a software package correctly and you'll have a far better idea of how much fuel employees are using and how to reduce it. Tracker's technology director, Clive Girling, tells BusinessCar: "Calculate how much money you could save by reducing fuel consumption by monitoring driver behaviour to help you build a sound business case for investing in telematics. Monitoring driving style will enable you to identify drivers that habitually speed or take regular detours on route and will enable you to work with them to improve their performance. The savings that can be made through changes to driver behaviour mean that a telematics system can more than pay for itself."

Girling went on to say that it can be worth monitoring other mobile facilities, such as containers and trailers, so a telematics system that covers electrical and battery use can also be worthwhile to reduce operational costs beyond fuel consumption.

One area that is likely to be overlooked is the use of software with grey fleet. Savvy firms have already cottoned onto its implications to assist in the running of private vehicles for business use, but it isn't something that's well-known and can help to ensure that employees' vehicles are properly maintained when they are being used for work purposes.

Briggs explains: "The problem here is how to ensure that vehicles used for work purposes are maintained to manufacturer standards, as required by health and safety guidelines.

"This is an issue made more acute by the probability that the recession is seeing more drivers delay routine maintenance or even carrying out their own servicing - but failure to undertake your responsibilities properly could see you face the full force of the Corporate Manslaughter Act in the event of an accident."

He continues: "Fleet software will allow you to contact employees that drive their own vehicle, reminding them via email or text that their vehicle is due for scheduled maintenance and routine checking. In other words, the fleet software treats a grey fleet vehicle exactly the same as if it was part of the existing fleet. In this way, you can provide - as the health and safety executive requires - an audit trail demonstrating that you take risk management seriously."

Another less obvious area where software can be employed to save money is with SMR expenditure. Epyx's Price Check tool, itself part of the firm's 1link Service Network system, logs the cost of repairs and similar maintenance jobs down to levels such as labour, parts and fluids prices and, in short, makes sure that fleets aren't being charged over the odds for SMR work.

Gary Gibson, head of customer services at Epyx, says of the technology: "During a period over the past few years there has been very real pressure on fleets to find ways of making a substantial reduction in their SMR spend.

"As a tool, it does require an investment of time and effort by fleet users at the outset, but Price Check can 'remember' the best price for any particular job and is also widely used to drive errors out of the purchasing process. For example, when a dealer forgets to include an agreed parts discount, Price Check intervenes.

"Identifying these issues is very difficult for major fleets that may be processing thousands of transactions every day, but when Price Check has been used to flag up the problem once, it will automatically be applied to every transaction in future."

Parking fines are yet another less than obvious sore point that can be cut down on. According to Ashley Sowerby, managing director of Chevin Fleet Solutions, reduction in the admin surrounding parking tickets can be massive:?"The cost of parking fines for some businesses, especially those operating in the sales, service and delivery sectors, can be phenomenal. And the larger the business, the larger the problem, especially when you consider the amount of administration required to appeal wrongfully assigned PCNs or process the payment.

"Having technology available to automate and centralise the process can deliver a 50% saving, as if paid within the set timeframe these types of penalties are halved."

The consensus among software providers is that one size doesn't fit all. Fleets will do well to be aware of their needs and what they want from a telematics package before contacting a supplier, because a business running 10 vehicles isn't going to want the same top-end package as an international leasing firm. Tracker's Girling summarises: "A solution that can be customised will deliver greater benefits and help you set key performance indicators (KPIs) such as speeding, excessive mileage or idling. And be clear as to which vehicles groups you want to monitor such as sales, service or by region or depot, so that identifiers can be added to them that can be easily modified by the user."

Case studies: how much can you expect to save?

Epyx claims an average saving of up to 10% per service maintenance invoice for fleets using its software, while Jaama says customers can typically expect cost reductions of up to 8% on fuel spend.

However, the majority of software firms are not willing to go on record and put a number on how much money fleet managers can expect to save. Their reluctance to do so stems from the variations in size, operation and characteristics of every fleet, but each firm BusinessCar questioned assured us that there is a cost reduction to be made in each case.

Ashley Sowerby, managing director of Chevin Fleet Solutions, says:?"It would be somewhat naive to assume that an off-the-shelf solution is capable of delivering the same cost saving benefits as an application that has been built for purpose and moulded around an individual fleet operation.

"That said, if rolling out fleet management software is approached strategically, and products are built for requirement, it's not uncommon for organisations to shave up to a third from fleet budgets over the course of a few years."

BusinessCar's case studies tell the story of two very different companies that have invested in fleet software and benefitted as a result.

The small firm

Create Signs, a signage production and installation company in Bristol, invested in Tracker units for its fleet of five vehicles in September 2007. Since it adopted the technology, it has reported that fuel savings are up by 15%, fleet efficiency has increased by 10%, and there's been a 4% reduction in insurance costs. The company also said that general management of staff time had improved by 10%.

Andy Fogg, partner at Create Signs, says: "Our main reason for using Tracker is to better time-manage our team, optimising vehicle usage, while balancing the efficiency of deliveries and meeting our duty of care obligations.

"We are working in a tough economic climate and every penny counts for a business like ours that runs a small fleet. The investment. has certainly paid off. Not only have we seen cost savings, but we are fully informed of where our staff are at any given time, plus we can make sure we are managing their time as efficiently as possible."

The large corporate

At the other end of the scale, construction industry supplier SIG claims to have made substantial cost and time savings by using a development of Jaama's Key2 system. The company manages a large fleet of 1050 commercial vehicles of 7.5 tonnes and above, 650 LCVs and 1200 company cars, and was initially running the standard Key2 software, but was operating a manual damage and defect report system.

Each week, the branch manager (SIG has 450 UK branches) would hand-write a defect and mileage report sheet, which itself would be posted to head office where the information would be manually fed into the firm's database. As a result, SIG approached Jaama to develop an online vehicle-defect logging system, which resulted in Defect Manager - an add-on to the existing Key2 system. This allows branch managers to file vehicle defect and mileage reports online, each of which is linked to an individual vehicle. The result is better maintenance records, more accurate reports and reduced postage costs of £4680 annually. The company also estimates that it has saved three days a week in man hours as a result of the reduced administrative workload.

SIG UK logistics administration manager Tommy Duncombe says: "The manual system was a hugely labour-intensive process as it involved both branch transport managers and my logistics department staff inputting the same information. Some drivers did not log mileages and writing could be illegible, while there was always the risk of information going missing or not being inputted correctly.

"It was also a labour-intensive process keeping track of the defects that were reported and ensuring that they were rectified as soon as possible.

"The online system has improved vehicle safety because, both centrally and at a branch level, we are able to view the progress of fixing any vehicle defects quickly and easily and there is no chance of any data going missing."