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MOTORING REPORT – An industry driven by innovation and early adoption

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The ongoing migration to driver-based fleet management

Fleet management, which includes the full ecosystem of vehicle supply, maintenance, vehicle replacement, vehicle selection, insurance, accident management and more, is enabled by fleet telematics providers. Monique Verduyn reports

Fleet telematics makes it possible for businesses of all sizes to achieve a tangible return on investment by improving driver behaviour, logistics efficiency, safety, security (stolen asset recovery), maintenance, lowering of insurance premiums, or managing self-insurance risk.

THE EVOLUTION OF FLEET MANAGEMENT

“The fleet management industry has embraced technology and is using fleet telematics to add value and improve customer service,” says Brendan Horan CA(SA) and CEO of MiXTelematics, a global fleet and mobile asset management solutions company which was founded in South Africa in 1996, to give us some insight into the future of the industry. “Fleet telematics has enabled the fleet management industry to better understand its customers and to better service the specific needs of industry types. Critical information like odometer-based kilometres and driver behaviour data can impact significantly on vehicle residual values and the era of big data is assisting in refining these models.”

Horan says mobility and the use of the smartphones in transport and logistics are among the biggest trends influencing the fleet management industry in South Africa  and globally. “On-board cameras are now being used to couple picture-based information with on-board computer data to enhance the meaning of information. Also, interactive displays and voice solutions are adding the ability to communicate more effectively.”

In addition, he adds, the value chain is consolidating and the industry is seeing a rising demand for integrated solutions where the full lifecycles of assets and vehicles are being managed together on one central interface.

Fuel remains a massive issue in South Africa. As fuel prices increase, the demand for fuel-saving solutions has increased. “Technology is enabling this very effectively through monitoring how drivers are driving – through drive-style events like harsh acceleration, harsh braking, harsh cornering, speeding both at top speed and street level – and fuel bills can be significantly reduced.”

The telemetry industry is experiencing great change in the areas of embedded engineering as device components are shrinking and micro technology is being deployed worldwide. Says Brian McKenzie, director of QCIC, an asset management solutions company based in Pretoria: “This revolution is causing the design of solutions to shrink considerably in form factor and embedded engineers now have the ability to include intelligence in the product that was previously not possible in the same form factor.

“In the server and GUI interface environment, some very interesting changes are taking place. Communication, database and GUI software engineers are now bombarded on a daily basis with new and exciting ways or sending and receiving data. Database design and collation has also shown dramatic changes in speed and scalability. GUI interfaces have become much more attractive and user friendly.”

McKenzie says telemetry devices have become consumer items and almost any and everything that moves has a geo-positioning device fitted to it, either at OEM (original equipment manufacturer) level or through retro fitment. “Owing to the fact that component costs have shrunk, markets that were previously considered to be unprofitable are now looking like opportunities. Users of the technology have become more informed and sophisticated. The user requires a system that delivers more at less of a cost. Marketing models need to be flexible and design and development departments have become a place where customer requirements roll out on a daily basis. All in all, the industry has become an extremely interactive and lively environment where there is no space for the slow mover. Time to market has become extremely critical.”

INNOVATIVE TECHNOLOGIES ON THE RISE

On-board cameras, interactive displays, and smartphone convergence with mobile workforce management are just some of the latest technology developments. On-board cameras provide recordings of a vehicle’s activity and can help to protect against fraudulent or malicious insurance claims, capture data to help drivers and operators reduce speeding, reduce accident rates, and lower accident costs. Because they help to improve driver behaviour and reduce fuel costs too, they are becoming integral to running a more efficient and safe fleet.

Interactive displays meanwhile allow fleet managers to visualise vehicle and fleet movement on a map, query and display metrics and vehicle data in real-time, and provide one place dashboard from which to monitor and visualise pertinent data on the fleet as it happens, so that better and more efficient decision can be made.

The convergence trend that has taken hold in consumer markets is also making inroads into commercial telematics with several vendors offering software applications on smartphones and tablets to track vehicles remotely, but also as a replacement for fixed mount in-cab on-board computers and black box systems. Clearly the multi-device and the ubiquitous mobile computing trend first seen in the consumer environment is now spreading to industrial markets.

“Again, the massive change in component form factor is allowing design engineers the ability to engage non-traditional markets with small form factor and highly intelligent devices, says McKenzie. “The telemetry industry is literally changing on a daily basis. There is really nothing new but rather a shift in how challenges are approached and dealt with through the various areas of development, such as communication, data handling, software interfaces, reporting and monitoring and total revolution we have experienced in the mobile hardware sector. Interconnectivity of devices has huge potential, especially bearing the Internet of Things (IoT) in mind. This concept is not limited to stationary environments only but would have a great fit in mobile as well.’

CHOOSING A FLEET MANAGEMENT PROVIDER

Companies should look for service providers who have solid credibility and solid references of return on investment. “A strong balance sheet is also a good indication that a business is run in a sustainable manner, and that the service provider will be around to service the company for the duration of the contract period,” says Horan. “Too many telematics service providers try to ‘buy’ a base by going in too cheap, and this often leads to dissatisfaction as they struggle to service the contract based on the income received. Companies can also become stuck with a large capital balance on their balance sheet by investing in high capex solutions that force them into an unhappy relationship for some time.”

According to McKenzie, an enormous threat to the middle-tier telemetry industry is the introduction of similar technology at OEM level. “I suspect that each and every OEM will have some sort of a communication device installed at factory level at some stage of the manufacturing process,” he says. “This will assist the OEM to keep track of various parameters and will gather, store and possibly transmit all types of telemetry data to the OEM and its partners for various applications, such as safety and security, engine management, warranty management, service planning, and more. By doing this the OEM will effectively own the vehicle telemetry environment and as such will push the current third-party supplier out of the commercial playing field.”

As far as OEM involvement in the mobile telemetry space is concerned there is not much that an aftermarket supplier can do other than try to retain the loyalty of their current users through other third-party technologies in the various fields of application. “The world is an ever-changing environment and technology is moving at an extremely rapid pace,” McKenzie says. “We will have to find ways of remaining relevant.” ❐

DRIVER-BASED FLEET MANAGEMENT

Online transaction authorisation clocks up savings for fleet managers

Internal fraud and pilfering by drivers overshadows the risks that external fraud poses to South African fleets, says Dr David Molapo, head of fleet management at Standard Bank. Only R8,6 million worth of transactions declined by the bank’s transaction authorisation system this year were linked to attempts at using fraudulent or stolen cards, compared to R306 million worth of declined transactions attempted by drivers.

“However, the days of drivers filling up their personal cars with the company fleet card are numbered,” says Dr Molapo. “We have saved fleet managers R342 million by blocking potential fraudulent transactions up to August 2014 through our transaction authorisation system. This is a result of enabling customers to manage various categories of fleet expenses and invoice them through a single fleet management account.”

The transaction authorisation system automatically checks each fleet card transaction and declines those that look suspicious, and also provides fleet managers with access to every transaction as it happens. They can log on to a website where every transaction is listed in real time, with declined transactions highlighted.

An SMS service built into the system means that fleet managers can track transactions even when they are not at their desks. A mobile application, currently in development, will allow fleet managers to approve or override declined transactions from their smart phones. For those who want to avoid data-overload, the system automatically generates reports summarising the day’s transactions.

CHOOSING THE BEST TELEMATICS PARTNER FOR FLEET MANAGEMENT

With the constant growth in the telematics industry, choosing the right supplier can be daunting. Brendan Horan, CA(SA) and CEO of MiXTelematics, offers some pointers:

  • Choose a reputable supplier and try and get a credible reference from a similar business in your industry. The premium telematics service providers focus on market verticals and proven solutions can ensure you keep a competitive edge in your fleet.
  • Check the financial health of the company. If they are listed the information is freely available, if not then ask.
  • Run a proof of concept or demonstration with tangible results and don’t just take a leap of faith based on a slick sales pitch. Most reputable players will run a detailed  needs analysis and follow this up with a tangible demonstration period where certain objectives need to be met.
  • It is worth asking the question as to the technology roadmap and the investment in R&D. You don’t want to stand still with technology that is moving so fast.
  • Also, the ability for the service provider to integrate into ERP, transport           management, HR and other systems can be a huge plus through flexible software development kits.Author: Monique Verduyn
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