In the driving seat: how telematics unlocks cost savings for SMEs.

Myles Gardiner
On: 8 Aug 2019
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Telematics, IoT

One of the great things about technology’s development is how it’s levelled the playing field for many businesses, enabling SMEs to avail of systems that once were exclusive to large enterprises with budgets to match. One example of this trend is telematics, a branch of the ever growing Internet of Things. It combines in-vehicle GPS tracking systems with communications technology to collect and send data about driver and vehicle performance like location, speed, acceleration, fuel consumption and rest periods.

No longer just a monitoring solution for companies with fleets of panel vans, trucks or minibuses, in fact telematics has benefits for companies with just a few delivery drivers. The systems vary depending on their complexity, but there are affordable solutions for a business of any size.

Entry-level telematics solutions for SMEs are often just a matter of a few minutes’ work to plug a tracking unit into a port on the engine management system. Even if there is a small upfront cost for the device, the fast installation time means a telematics system quickly starts repaying the investment for the owner.

By tracking and monitoring their vehicles, SMEs can become more efficient in route planning, meet delivery times, reduce insurance costs, and over time, improve the performance of their vehicles. Let’s look at each of these benefits in more detail.

More accurate delivery times for better customer service.

Many telematics solutions include a route planner that plots the most efficient route for a driver. This increases the likelihood of delivering on time, more of the time. This is critical for efficient customer service. Suppose the delivery involves a component that’s needed to start manufacturing, or materials required for building work. In either scenario, on-time delivery is critical for the end customer, since failure to start work on time could have financial implications.

Because the telematics solution records all driver journeys in real time, automated alerts can be set up  via SMS message to inform customers when the driver is expected to arrive. This technology is already in use by public transport companies who use the technology to let customers know when the next bus or train is due to arrive.

Ensuring driver wellness and regulatory compliance.

Under EU law, professional drivers using large goods vehicles (3.5t and over) or passenger vehicles of more than eight people must take proper rest periods. Companies can use telematics data to prove they’re complying with the regulations and to ensure that their drivers are taking adequate rest periods from driving.

Improved driver performance.

Telematics solutions can also identify driver behaviour like harsh acceleration, braking and cornering, or revving of the engine. This information is then available to the fleet manager or business owner who can provide specific feedback to drivers, to help them improve their performance behind the wheel. The insurance company also has access to this data, and will reduce their premiums accordingly, since safer driving leads to fewer claims. It’s a win-win – and for the business using telematics, with substantial cost savings for the business on insurance premiums.

Increasing asset value.

Telematics data on driver behaviour can also help reduce wear and tear on the vehicle, which means its value lasts longer and depreciates over a longer period. The system can’t be tampered with, so it provides independent proof of mileage, increasing a vehicle’s value when it’s time to trade in for a newer model.

Lower fuel costs through route optimisation.

At the start of the working day, the route planner takes the addresses of each planned delivery or collection and considers factors like traffic flows or roadworks to calculate the most effective route plan.

The benefits of efficient route planning are significant. They allow a driver to make more stops during the working day, or else spend less time on the road depending on what the business needs. Route planning tools can improve efficiency by up to 20 per cent – even among experienced drivers who know the routes.

For any business that needs to keep vehicles on the road, two of the highest costs are employing a driver and fuel. In that context, telematics has the potential for cost savings and becoming self-financing very quickly.

Throughout the year, Three will be producing a range of eGuides, blogs and videos looking at how technology can help Irish SMEs. To make sure you get notified as soon as we publish new content, visit the Three Business Learning Centre to sign up to our mailing list. Register now: