Should you outsource information services or continue to do it yourself?
How do you know if you're getting your money's worth when it comes to your fleet's information systems? What yardstick do you use to measure the cost effectiveness of your information management operations? And how do you make decisions on new investments in information technology without solid cost/performance numbers?
Those are tough questions without reliable answers, according to the person who raised them. Tom Grojean has a long track record of successfully turning around financially troubled transportation companies, most recently reorganizing Burlington Motor Carriers. Obviously he understands the business imperatives of cost justification.
Grojean's response to the uncertainties of controlling a modern fleet's information costs has been to outsource the entire operation. The costs probably won't be lower, at least not at first, but they will be predictable, which means they can be reliably budgeted and measured. Technology decisions and investments will be made by a supplier who has chosen to focus on fleet information management as a core business. And most importantly, says Grojean, Burlington becomes a client, and "Clients have a lot of clout."
While that's a fairly uncommon strategy, as this month's feature story explains, it's one that's likely to prove attractive for many more fleets over the next few years.
As with most complex things in life, though, there's more than one way to approach the problem of guiding and managing a fleet's information operations.
Although it seems like it was another lifetime, mobile communications over a satellite was a new, unproven concept less than 10 years ago. A manager from one of the first truckload fleets to adopt satellite communications stood up at a large industry meeting and admitted that there was no way to honestly cost justify his fleet's investment in such a new technology. But, he said, common sense told him there had to be a payback in a system that let the fleet track and communicate in real-time with every truck it had on the road. "We don't know yet what it is or where it will come from, but we're convinced that the payback will be there," he told a then-skeptical audience.
Time has proven that he was right to trust his "common sense." Today, wireless communications is considered standard equipment for many types of fleets.
With its roots still firmly planted in it origins as a decentralized, entrepreneurial industry, trucking has a deep reservoir of intuitive managers. For many fleets, the issue of control over a function as central as information management will continue to outweigh uneasiness over the difficulties of cost justification. As long as they have decent access to capital, these fleets will continue to make technology investment decisions based on operational needs and perceived productivity opportunities.
When it comes to outsourcing information services or keeping them in-house, there is no right answer. Information services and technology have become expensive, complex, and essential parts of trucking. Investment and management decisions involving those systems won't be easy, but you won't be able to avoid them either.