There's no simple formula or single solution that suits everyone
As costs drop and coverage increases, mobile communications is quickly moving beyond its first major market in longhaul truckload applications. With longtime providers introducing new or expanded services and new providers entering the market rapidly, wireless data is about to become a standard tool in virtually all types of truck fleets.
Choice is a good thing. It means fleet managers should be able to find just the right service for their particular operations, but it also brings some high-stakes challenges. Choose the right wireless system for your fleet, and it will repay your investment with fundamental improvements in the way you do business. Choose the wrong one, and you'll be saddled with an expensive technology that just gets in the way of doing business.
Whether you're looking to adopt wireless data for the first time or want to reevaluate a system you're already using, making the right decision will take a considerable amount of work, starting with an examination of your most basic business strategies. To help you get started, here are some essential points to consider: your business case for wireless data, cost and coverage, and integration with existing or new management and e-commerce systems.
Once you understand what you want to achieve with wireless data, there's a list of basic questions that can help you compare appropriate providers. We've also included a list of companies that provide wireless data communications, either as a standalone service or as part of an integrated fleet management package. However, this list is just a starting point, since new companies are rapidly entering the market with products specifically tailored for different trucking applications.
Business case Although some truckload carriers found themselves forced into wireless communications by customers that required it as a condition of getting their freight, your first step should be making a strong business case for bringing wireless data communications into your operations. You need to identify how you will use the technology initially and how it can be extended to other parts of your fleet operations. The hard but critical part, say experts, is anticipating how wireless will change your business.
Once you understand why you need wireless access to your trucks and drivers, and how that access will improve your operations, you should be well on your way to successfully choosing the right system.
The following points were offered in interviews with wireless company executives and experts as critical considerations in making your business case:
* Recognize the importance of adopting an effective wireless data system. Fleets that do will offer higher levels of service and achieve better utilization of assets.
* The move to wireless gives you an opportunity to look at all of your operations and procedures - to change the way you do business. Don't try to overlay new technology on old business practices.
* You're running a transportation business, not a telecommunications company, so concentrate on your operating ratio, not telecommunications technologies.
* The objective of wireless data isn't more stops per day, it's achieving competitive advantage. Look at wireless across all areas of your fleet operations, and consider how the various systems might be leveraged throughout your operation.
* Providers often have professional services available that can help you evaluate specific wireless information needs and solutions.
* Don't underestimate the need for staff training. Without it, drivers, dispatchers, and other operational staff will not give up their old, familiar, and, in their eyes, effective systems.
* Once you've developed a business case, map out the strategies you'll use to achieve it.
* No wireless implementation, no matter how carefully planned, will succeed without total commitment from the fleet's most senior manager. If you don't go into the project with that commitment, you'll never realize the full returns you anticipate.
Cost & coverage The cost of wireless service and the coverage of that service are the two most obvious factors in choosing a wireless provider. Every fleet needs to strike a balance, one that gives it an acceptable level of wireless access to its trucks at a cost it can afford.
Truckload carriers, for example, might want the nationwide coverage provided by a satellite-based system; cost would be a secondary consideration because they only need to transmit a few messages a day. Regional fleets, on the other hand, might be happy with more limited land-based coverage that would allow them to transmit more data at a lower cost. And yet others might want a service that combines both systems.
Unfortunately, there's no simple formula for calculating the perfect cost/coverage solution. Every fleet has to measure the available options against its own specific operations and information needs. Here are a few things to keep in mind as you attempt to find the right combination for your fleet:
* The real issue is the cost of using the system the way you need to, not the cost per Kb to transmit data.
* Factor in the cost of not being able to do certain things. For example, do you incur any costs if you can't reach a vehicle thathas moved out of the system's coverage area? What will it cost to stop a truck if a driver has to call in to discuss a problem?
* Most wireless providers have developed return-on-investment models that can be used to evaluate costs for various fleet operations and applications. If asked, some will even develop flat-rate programs based on their models.
* Most providers can put together a customized financing package that includes onboard hardware as well as network hardware and software.
* Can your operation benefit from a provider that has the capability to provide a wide range of services meeting a broad range of applications? Or would you be better off with a provider that specializes in your particular niche?
* Wireless technology is changing rapidly, as are strategic partnerships between wireless providers. Since those changes can have a major impact on both cost and coverage, consider a provider's system architecture, an open architecture will allow you to take advantage of future technological developments.
* Comparing costs with other fleets can be tricky. Even costs for the same system can vary widely from one fleet to another because usage is specific to a fleet's operation and level of information technology.
Integration Tying wireless data into a fleet's other information systems can be as simple as linking it to a stand-alone computer-aided dispatch system or as complex as turning your trucks into fully functional extensions of a wide area network. Whatever level of integration suits your immediate and future needs, understanding a wireless system's integration capabilities is essential to understanding its value to your business. Raising the stakes even further, it's likely that any successful exploitation of e-commerce will also hinge on the integration characteristics of the wireless component you choose.
When attempting to match a wireless system to your fleet's current and future integration needs, it's helpful to break the system into three components. The first is the actual wireless transmission component. Some operate in real-time, where vehicles are always connected; others function in "near real-time," relaying data through hubs whenever a fleet requests it. While you don't need to be concerned about the technology behind the wireless network, you do need to make sure its characteristics fit your information system needs.
The second component is the provider's own network. Interfacing with that network is the most important consideration here. Does a provider offer packaged interfaces or tools to develop interfaces? Some fleets will want the flexibility of developing their own interfaces, and others will want supplied interfaces.
The third component is your own back-end system. If you have a substantial investment in information technology, can the wireless system be integrated without re-engineering that system? If you have a limited or outdated information system, can your wireless provider help you upgrade if necessary?
Here are a few other points to consider when evaluating your wireless integration requirements and options:
* Wireless services are much more than just mobile communications. They can allow fleets to move e-commerce out to the entire distribution channel.
* What's your software capability? Do you have your own developer, or will you need to rely on the wireless provider? What's the fundamental software package that comes with the service?
* Do you want to buy all the hardware and software components separately, or do you need a packaged solution?
* If you don't have an information system in place and don't want to make the capital investment in vehicle and back-end hardware and software for an integrated system, consider new ASP (application service provider) offerings. For a monthly subscription fee, Internet-based ASPs provide onboard hardware and wireless service, as well as access to basic management applications through a Web browser and an Internet connection. Applications are currently limited to dispatch, although e-commerce functions could be added in thefuture.
* Trailer tracking systems are initially being introduced as standalone systems, but most fleets will quickly need to integrate them into existing information systems.
* The right wireless system will allow you to extend e-commerce's "pervasive computing environment" to your trucks and drivers, providing the highest levels of integration and delivering comparable gains in productivity.
Resources The following list includes companies that provide basic wireless data communications services as well as those that offer complete packaged wireless systems. Since wireless is a fast moving technology, with new providers and new joint ventures emerging just as quickly, the list is far from complete. Check the FLEET OWNER Web site (www.fleetowner.com) for the most up-to-date list of wireless providers.
American Mobile (www.ammobile.com)
BellSouth Wireless Data (www.bellsouthwd.com)
Eaton Trucking Information Services Div. (www.fleetadvisor.com)
HighwayMaster Communications (www.highwaymaster.com)
Kinetic Computer (www.etruck.net)
PeopleNet Communications (www.intouchavl.com)
Vantage Tracking Solutions (www.vantagetracking.com)
Once you've developed your business case for a wireless system and determined your cost, coverage, and integration needs, this list of questions can help you identify the providers best suited to your specific requirements. Remember, though, adopting the right wireless data system is a complex process; this simple list of questions is just a starting place for your conversations with potential service suppliers.
1. Does your system provide coverage throughout the area my fleet operates? If not, what are the coverage limitations?
2. How is equipment installation handled? By whom and where? Is it possible for my company to take responsibility for installation in the future?
3. How much training on the system is needed, and how do you provide this?
4. How much does the onboard equipment cost? What are the purchase, lease, and rental options?
5. If I have an equipment problem, is service available on-site, through a service center, or on a return/replace basis?
6. Do you manufacture your own hardware? If not, who does this manufacturing? What is their reputation for quality?
7. What are the operating costs? How is this billed?
8. What are the minimum requirements for the computer system needed in my office to operate the system? Any additional software required? If so, what are the costs?
9. Is it possible to integrate your system with back-office software such as a customer database or dispatch in the future? Who handles this integration?
10. Tell me about the security and redundancy of the network where data is processed and stored. Is there a backup facility?
11. What product enhancements are planned?
12. What can I expect to see in terms of ROI, based on experiences of other fleets that have implemented your system?
13. Are there any additional costs I should be aware of?
14. How many units do you currently have installed in the market? Can I contact people at these accounts?