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June 9, 2009updated 12 Apr 2017 11:59am

Cutting costs, not corners

Ashley Martin investigates how smart investment in systems can help fleet operators ride out the recession. Cost management is the number one priority for all businesses as they battle for survival in the recession, and that means fleet decision-makers are increasingly turning to software providers for help.

By Ashley Martin

Ashley Martin investigates how smart investment in systems can help fleet operators ride out the recession.

Cost management is the number one priority for all businesses as they battle for survival in the recession, and that means fleet decision-makers are increasingly turning to software providers for help.

Fleet operations are, for many companies, the second-biggest corporate cost after employee salaries, and therefore a prime focus for cost-cutting in the economic downturn.

As a result, fleet software providers are reporting good prospects for growth as businesses realise that the complexities associated with running a modern vehicle fleet – coupled with ensuring duty of care compliance and carbon footprint reducing obligations – can seldom be achieved by using old-fashioned spreadsheets.

As Neville Briggs, managing director of fleet software provider CFC Solutions, says: “The recession provides strong opportunities for fleet software. Essentially, this is a product that provides control – over costs among other areas – and this is clearly a very popular selling point at the moment. Companies are looking to ensure that the cost of running their fleet is minimised while all legal, human resources and environmental obligations are fulfilled – so there remains a buoyant level of demand for our products.”

Hi-tech is the future

It is a view shared by Jason Francis, managing director of fleet software provider Jaama, who adds that ‘smart’ fleet decision-makers are waking up to the fact that today’s hi-tech vehicle management systems can seamlessly interact with other internal and external software to dramatically improve operating effectiveness and efficiency.

Sophisticated web-based software developments means that fleet operators no longer need to manually input every item of fleet information from a driver’s name to a car’s number plate, and from a fuel purchase to a vehicle service. Instead, computers, using a common language, seamlessly populate systems in realtime, ensuring up-to-the-minute and accurate management information

“Fleet decision-makers are becoming increasingly software-savvy, and they understand the importance of choosing technology that can fully integrate with systems operated by external suppliers and other company departments, such as HR, payroll and finance, and can also be accessed by drivers,” said Francis.

“Only five years ago fleet managers still had to manually enter virtually every single piece of fleet relevant information. This was not only time-consuming and administratively cumbersome, but could be prone to mistakes,” he adds “Additionally, the way data was stored meant it was difficult to monitor, measure and compare and contrast the performance of individual drivers and vehicles effectively.”

Today, data and information feeds from contract hire and leasing suppliers, daily rental companies, fuel management operators, fast-fit organisations and residual value suppliers, for example, can update fleet management systems along with information supplied by drivers – such as mileage, expense claims and working hours – and information from other departments on, for example, new starters, employee promotions and changes in driver circumstances.

Simon West-Oliver, sales and marketing director of Drive Software Solution, agrees that the market is “very buoyant”. However, he points out that there are two distinct technology avenues being exploited by fleets.

Smaller businesses operating up to around 50 vehicles are typically reliant on their leasing provider’s software systems to provide effective and efficient management.

Meanwhile, companies operating larger fleets are making the technology investment themselves, but are also piggy-backing on the reporting capabilities provided by suppliers’ systems.

“Software has become more of a commodity because the internet has increasingly moved into the automotive sector,” says West-Oliver. “More and more companies are exploiting what they can get from their key fleet providers and that is where those organisations are in turn creating key performance indicator differentiation versus rival providers. Therefore, technology, the range of online services available and the sophistication of management reporting is key for service providers rather than fighting over monthly rental rates.”

Benefiting from the recession

Epyx, which specialises in IT solutions for the automotive sector, has seen its suite of 1link e-commerce platforms covering functions including vehicle procurement, maintenance, hire, disposals and relicensing, being adopted by leasing fleets running more than two million vehicles, 12,000 service providers and motor manufacturers on behalf of their franchise dealer networks.

Ken Trinder, head of business development at Epyx, says: “Technology of the kind we provide to fleets is, in many ways, a product that benefits from the recession. At a time when fleets are looking to make processes lower cost to operate, more accurate and faster, we provide answers that can be easily adopted with minimum expenditure cost.

“All of our platforms replace largely manual systems relying on phone, fax and paper, with fast, accurate and cost-effective online mechanisms.”

All software providers, not surprisingly, stress that the use of technology to manage fleet vehicles deliver huge financial and administrative savings, but how to quantify those benefits is not easy.

West-Oliver says that savings are delivered in many areas and the more complex the fleet operation the greater the benefits.

Meanwhile, Francis prefers to leave it to Jaama’s customers to justify the benefits of their financial investment in the company’s systems.

He points to the amount of administration time saved coupled with the ability to deliver huge operating cost savings through the increasingly efficient management of their fleet and ‘grey’ fleet vehicles – employees who drive their own cars on business – and associated duty of care responsibility.

He adds: “Our client list can testify to having recorded significant cost savings, thus improving operating efficiency and effectiveness.”

But, despite such claims there remain, according to Briggs, medium-sized fleets running hundreds of cars which are managed with a makeshift combination of paper files and a spreadsheet.

But, he argues: “The demands placed on a fleet in the 21st century are so complex and exacting that you need specialist software if you are running anything more than a handful of vehicles. No matter how a spreadsheet is used, it will not help people who are managing fleets to do everything that is needed when it comes to tackling the key issues crying out for attention on their fleet right now – pressure on costs, corporate manslaughter issues and environmental concerns.

“Any specialist fleet software package should easily justify its investment through gains in cost control and general efficiency in a short space of time. A spreadsheet is a false economy.”

To aid that transformation, CFC has recently made some of its products available on a pay-as-you-go basis. The new approach is designed to enable customers to acquire a comprehensive fleet software package without the upfront costs involved in a traditional software sale.

Briggs claimed: “On a month-by-month basis, we are confident that our system will more than pay for itself in terms of savings made.”

And it seems that technology providers are confident that demand for products will continue. Trinder suggests: “There is undoubtedly potential for fleet managers to use more technology.”

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