How Can GPS Vehicle Tracking Improve Your Business?

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1 A FleetMatics White Paper Glasgow Barncluith Business Centre Townhead Street Hamilton ML3 7DP How Can GPS Vehicle Tracking Improve Your Business? January 2010

2 From communications and shipping, to productivity and back office procedures, technology has pervaded every aspect if the business world. But small- to mediumsized enterprises (SMEs) with vehicle fleets have an additional tool at their fingertips to gain further benefits from the technological revolution. Increased access to the global positioning system (GPS) has given SMEs a way to directly monitor and manage their most important assets their vehicle fleets and people. GPS tracking is not a new technology. It has been used by progressive fleet owners for years. Early adopters of GPS technology have given their businesses an edge over competitors. Because of its immediately recognisable benefits, GPS tracking has quickly gone mainstream. The technology is being employed by a wide variety of SMEs including plumbing, heating/hvac, trucking, landscaping services, electrical and general contractors, construction companies and many other business sectors that utilise fleet vehicles. How Can GPS Vehicle Tracking Improve Your Business? will discuss the common problems confronting fleet owners and focus on how SMEs can effectively use GPS tracking to solve these issues. This white paper will describe the technical aspects of GPS tracking, provide real-world examples of how GPS vehicle tracking can be used in today s business environment and help SMEs choose a GPS tracking solution to suit their unique business needs. The Technical Aspects of GPS Tracking Modern tracking devices for fleet and individual vehicles were initially conceived for the shipping industry. Companies with large shipping fleets needed to know the location of any vehicle at any time. From this need the idea of using GPS satellites to track and monitor fleet vehicles developed. Generally, a GPS module is installed in each vehicle to track the vehicle s precise location via satellite. The modules can also monitor a wide variety of vehicle information including speed, engine start up and shut down, routes and idling. The information from each vehicle is then often transmitted to a remote user. Depending on the GPS fleet tracking system used, remote users can view maps of vehicle locations and routes or access available reports on vehicle status via the Internet or specialised software. Business owners, fleet managers and dispatchers commonly use GPS fleet tracking to improve fleet routing and expedite dispatching. In addition, GPS can be used to monitor

3 unwanted driver behaviour, reduce fuel consumption, prevent theft and provide various operational efficiencies. Most businesses find a near immediate return against the cost of this type of tracking software. GPS fleet tracking first gained wide-spread popularity in the European market and has emerged as an essential business tool in the United States. Once fleet owners install GPS tracking in their vehicles, they quickly discover how important the technology is in streamlining and improving their entire operation in ways never imagined. You Simply Have No Control Traditionally, fleet owners had no idea what went on outside their office walls when their employees drove off the lot. SMEs had no concrete or accurate way to measure job performance and accountability. There was no way to verify a driver s location at any given time. Nor could owners ensure that employees only used vehicles for authorised uses. Without the direct guidance of a supervisor, many employees are not as productive as they should be. The Global Productivity Report showed that 34 percent of employees time around the world is spent being unproductive while at work. A recent Gallup Poll found that employees spend about 75 minutes of every day being non-productive. These numbers could easily be adjusted upwards for mobile employees. Extended breaks, unauthorised side trips during business hours and inappropriate routing to job sites contribute to non-productive time on the job. This lost time can also add up to increased payroll. When employees do something other than their job during business hours, they may have to work overtime in an effort to get all the work done. In addition, the Wall Street Journal recently reported that SMEs with remote or unsupervised employees face an additional challenge. According to the Society for Human Resource Management, 59 percent of employees outside the office lie about the number of hours worked. Additional Burdens of Running a Fleet Lack of control over mobile assets bears additional financial burdens. Speeding uses more fuel than maintaining lower speeds. A recent study indicates that fuel economy significantly decreases beyond 105 km/h. In fact, decreasing speeds from 110 km/h to 89 km/h can save up to 25 percent more fuel. Excessive idling also adds tremendously to the cost of doing business. Every hour of idle time burns 3.10 litres of fuel. Contrary to popular belief, restarting an engine uses no more fuel than 30 seconds of idling and has very little harmful impact on vehicle

4 components. When drivers use their vehicles as climate control, it costs businesses money. Inefficient dispatching can also lead to considerable cost leakage. Without knowing the real location of every vehicle, dispatchers may not have the information to send the closest vehicle to a job site or provide direct routing information. Placing excessive phone calls to drivers to gain location and job status also adds to the amount of wasted time and cost. Perhaps the biggest threat to a fleet owner is vehicle theft. Over 30 percent of stolen vehicles are never recovered. It often takes weeks or months to recover lost vehicles and most are returned with significant damage. In addition, any equipment and tools on board the vehicle are usually lost. Quick retrieval of a vehicle greatly increases the chance of reducing damage caused by thieves. Fleet owners also have to worry about employees using company vehicles for unauthorised purposes. Many SMEs with fleets allow employees to drive vehicles home as a perk, but either prohibit or tightly restrict personal use. However, most owners have no idea whether or not their vehicles are actually being used for unauthorised purposes even during work hours. GPS Puts You in the Passenger Seat If you were able to sit in the passenger seat of every one of your fleet vehicles, would your mobile employees change their unproductive and wasteful work habits? Research shows that they would. A recent study by the Aberdeen Group (a research firm that studies the effects of technology on business) found that organisations experienced a 23 percent increase in the total number of service call completed per day per technician once GPS vehicle tracking was installed in their fleets. Other findings from the study include: 12.2 percent increase in service profitability 14.8 percent reduction in average travel time per job 9.9 percent decrease in overtime pay 27.9 percent increase in operator compliance 13.2 percent reduction in fuel costs Essentially, GPS vehicle tracking gives fleet owners the ability to ride with their mobile employees without ever leaving the office. When employees know that their driving habits are monitored, they comply more readily with cost-effective driving policies and increase productivity.

5 Dispatching and Routing Efficiencies GPS fleet tracking also provides a tangible benefit through improved dispatching. When dispatchers know the exact location of company vehicles, they can more effectively dispatch the vehicle closest to any job site. In addition to saving fuel and reducing phone calls to drivers in the field, this can also increase customer satisfaction through vastly improved response times. This goes hand in hand with routing efficiencies. By watching vehicles en route, dispatchers can make sure drivers take the most direct route to any job site. In addition, should a driver get lost, you can easily get them back on the correct route. Some GPS tracking solutions even include current traffic information, so drivers can be routed around traffic congestions, further improving response times. In addition, many tracking solutions offer present-time and archival routing information so owners know where their drivers have travelled and where they are heading. By combining location- and time-based information, fleet owners can track the exact number of hours to charge customers and verify employee hours worked. GPS tracking can provide information on when an employee starts a vehicle, when he arrives or leaves a job site, and when the vehicle is shut off. Fleet owners will know exactly how much and how long the employee worked at each site and how long they worked during the entire day. Some GPS systems can also incorporate time/billing information into back office applications to automate payroll. By eliminating manual time sheets, fleet owners save considerable time in back office productivity. In addition, automated payroll often translates into more accurate billing and fewer overtime hours. Another huge benefit of GPS tracking is the ability to recognise any unauthorised usage. This includes unauthorised usage by employees, as well as protection from theft. If a vehicle is used during unauthorised times, business owners will know it. Should a vehicle be stolen, the GPS tracking unit will show the vehicle s exact location. This considerably improves retrieval times and reduces the amount of damage a vehicle may experience while stolen. For businesses with vehicle fleets, the ability to track and ensure retrieval of stolen property remains paramount. Other Effective Uses of GPS GPS vehicle tracking can provide SMEs with a vast amount of information that can be used to achieve further benefits.

6 Installing a GPS vehicle tracking system is the perfect time to consider implementing or revising company driver policy. Policy should include guidelines of vehicle speed, idling and unauthorised use of company vehicles. GPS tracking can then help SMEs enforce policies to eliminate wasteful driving habits. A reputable GPS tracking solution should include easy-to-use reporting functions to help fleet owners make business decisions based on the data. Fleet owners may receive information about vehicle speeds, idle times, engine start-up and shut-down, and notifications when vehicles enter or exit specific sites. With information in hand, owners can identify which drivers properly follow driving procedures and which need additional counselling. Many SMEs find it extremely useful to use the information gathered from GPS as a way to implement a positive bonus programme. Drivers that do not violate driving procedures, as proved by the GPS system, are entitled to bonuses. Since driving behaviour directly affects fleet costs, companies can provide bonuses while still increasing revenue. Case Study: GPS Vehicle Tracking in Action For over 25 years, Ian Stirling Haulage in Renfrew has provided exceptional haulage services to its clients throughout Scotland. The family-run business faces much larger competition in an industry that has felt the direct effects of climbing costs. For Ian Stirling Haulage, the GPS seemed to be the answer to all of their cost and control issues. The company settled the solution offered by FleetMatics, a leading GPS fleet tracking provider. Once the tracking system was installed, the results overwhelmingly impressed owner Ian Stirling. GPS helped Ian Stirling Haulage significantly tighten their expenses through a variety of fuel saving features. According to Mr. Stirling, his company utilises the system to know exactly when drivers arrive at a job site and how long it took for them to get there. This eliminates any routing discrepancies and ensures drivers use the quickest route possible to a job. Dispatchers also have the ability to locate the vehicles nearest to any job site, thus further cutting fuel usage. The various reporting features also allow Mr. Stirling to see any excessive mileage and unauthorised vehicle usage on off-days. In addition, the idling reports show which drivers waste fuel by running their vehicles as climate control during hot or cold days. We have cut our fuel costs dramatically, said Mr. Stirling. In fact, the fuel savings alone more than cover the costs of the system.

7 Ian Stirling also makes extensive use of the GPS reporting features to verify payroll. Prior to tracking, Mr. Stirling had no way to verify when his drivers started work or if his drivers took unauthorised breaks. Without GPS, you really have no idea where your vehicles are or what they are doing, said Mr. Stirling. Now I know where they are every minute. As a result of GPS tracking, Ian Stirling Haulage has also improved safety for its drivers. Using the speeding alerts, Mr. Stirling is immediately notified if one of his vehicles exceeds a pre-set speed threshold. Drivers can sometimes get distracted out on the road, said Mr. Stirling. GPS tracking helps them keep their speed down and has even changed their driving style. Customers of Ian Stirling Haulage have also realised the benefits of GPS. The company s customers are made aware that Stirling s trucks are tracked. They can get down to the minute estimates on when the trucks will arrive. In addition, delivery times are shorter since GPS makes it easy to choose direct routes and avoid traffic congestions. We implemented GPS to control our vehicles, reduce costs and make our business more efficient, said Mr. Stirling. The system has helped us do just that. We are quite happy with the cost savings and will never be without GPS tracking. Choosing the Right GPS Solution There are literally hundreds of GPS vehicle tracking suppliers on the market, making it difficult to choose which system will work best for each business. The key is to find a company that delivers a GPS solution that contains in-depth reporting, ease of use, reliable connectivity and excellent customer service. In-depth reporting features provide SME owners with the data needed to make sound business decisions regarding their fleet vehicles and drivers. In addition, accurate reporting of speed, vehicle usage, idle times, and start-up and shut-down can be utilised as part of an employee reward programme to encourage fuel-efficient and safe driving habits. Many companies create GPS solutions from a technical viewpoint without considering the usability of the system. Companies that understand the needs of SMEs and have extensive experience in serving the SME market can greatly enhance the results of a GPS solution. Another consideration is system uptime. Be sure to ask any prospective GPS company how often their system is online and how often they experience disconnections.

8 Finally, customer service should be a major consideration when choosing a GPS solution. With the growth of demand in GPS tracking, flimsy companies have sprouted up offering discounted services with poor-quality systems and even poorer customer service. Reputable GPS companies will be responsive to customer service, technical and training requests. In fact, the best GPS companies provide these services at no additional costs to their customers. GPS Buyer s Checklist This GPS buyer s checklist provides fleet owners with additional questions to ask when choosing the right GPS solution: Is the GPS tracking unit exposed or hidden from view? Does the software provide accurate, easy-to-read reports? Can you replay journeys minute by minute? Are there any other costs for service after the sale? Are there restrictions to the number of users that can access the system? And always ask to see the system working on a live fleet. Conclusions GPS tracking has initiated a complete paradigm shift in the way SMEs with vehicle fleets manage their business. GPS fleet tracking technology is not the wave of the future. It is already here and being used effectively in a number of SMEs looking to increase revenues while decreasing costs. The benefits and uses of GPS tracking filter throughout an entire organisation, from mobile employees and dispatching, to customer service and accounting. Research continues to show that SMEs that do not utilise GPS tracking are losing profit due to inefficiencies, lost productivity, poor cost controls and outright theft. In today s economic climate and competitive landscape, it is more important than ever for owners to do everything possible to keep ahead of the competition. By not installing a reputable GPS tracking system, owners may be putting their vehicles, employees and businesses at unneeded risk.

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