The global smart fleet management industry was valued at $290.9 billion in 2016 and is projected to grow at a rate of 7.6 percent by 2025, presenting new opportunities for fleet management professionals. This growth is also creating new spend management obstacles, however, and it is becoming challenging to keep operations running smoothly. The following Deep Dive will explore the issues that negatively affect the fleet management space as well as the emerging solutions that can help combat them.
Cutting Costs With New Solutions
Operational expenses associated with day-to-day fleet operations can be multimillion-dollar exposure points for businesses that have large mobile workforces. Off-policy spending also poses a major problem for these firms, as more than 60 percent of finance professionals reported their companies struggled to identify wasteful spending. Over 40 percent said the same about forecasting employee-initiated expenses.
Recent research showed that the leading concern for businesses working to handle spending is poor visibility into expense data, with just 27 percent of companies having systems in place to flag out-of-policy expenditures. An additional 60 percent of finance professionals struggle to identify wasteful or off-policy spending on their card programs — an issue that can be mitigated with spend management solutions that utilize data analytics. These tools analyze each purchase, making it easy for firms to monitor spending and find suspicious usage patterns that can slip through manual auditing cracks. Such offerings are good first steps, but much more can be done to optimize fleet expense management.
Management Systems’ Growing Importance
Fleets are as varied as the businesses that employ them, but every manager needs to consider cargo optimization, route planning, scheduling and dispatch, among other functions. Fuel must be purchased and vehicles must be serviced and eventually replaced. A single vehicle may last years, but managers should pay close attention to such long-term concerns to prevent operations from coming to a standstill.
British fuel management solutions company Fueltek has identified five critical issues every fleet management professional should keep top of mind. Fuel prices’ volatility tops the list, followed by finding and retaining quality drivers, complying with government regulations and operator safety. Vehicles should be driven appropriately based on road conditions, and managers must ensure they stay in good standing. Underlying all of this is access to reliable and timely data, Fueltek noted. Optimal spend management programs must be both accurate and fast so decisions can be made in real time.
Some companies, including third-party logistics providers and shippers, have more specialized needs. These firms may find it useful to have access to tiered SaaS spend management solutions that help estimate shipping costs and examine every aspect of operations for total freight cost minimization. Digital workflows such as these are replete with benefits, including improved communication, more efficient routing and updates made in fractions of the time. The result is that fleet companies exceed clients’ expectations, improve customer experiences and lower overall costs — all of which can be enhanced with automatic data capture.
Telematics Take Center Stage
Comprehensive management systems with advanced telematics are all the more important for optimizing fleet operation expenses for growing businesses. Each vehicle has a purchase price and operating cost, but proactive management can reduce those expenses and extend their lifespans.
Telematics systems can remind operators when vehicles are due for oil changes, tire rotations or even checkups, and automatically captured data can inform managers of driving habits — accelerating quickly, breaking hard, speeding and letting the vehicle idle — that cause unnecessary wear and require additional gas. This also reduces human error and the time necessary to complete paperwork.
GPS and telematics can do more than determine whether drivers are breaking too hard or keeping to their assigned routes. Remote controls enable these systems to limit engine revolutions and prevent speeding or even force a vehicle to gradually slow and come to a stop, keeping costs and unsafe driving in check.
Every new challenge brings opportunities, however. A well-managed fleet can be an asset, and management system software providers’ tools will grow only more sophisticated with time. Managers who keep their fleets in good working order and finance professionals who closely monitor field-based employees’ spending habits will enjoy success for the long haul.