ROI an issue for telematics users

Jan. 13, 2012
A recent survey of fleet managers by Donlen indicates that while more fleets are making the move to implement telematics solutions, many are remain unsure about the technology’s return on investment

A recent survey of fleet managers by Donlen indicates that while more fleets are making the move to implement telematics solutions, many are remain unsure about the technology’s return on investment (ROI).

The report sought to determine how telematics and GPS devices are currently used as well as future intentions of implementing such technology. But the lack of clarity on the payback issue remains a stumbling block for many fleets.

“[It] suggests a need to both understand their reasons for using telematics − such as improved driving behavior, route productivity, and fuel savings - and to integrate and analyze available data that is relevant to those reasons,” the report noted. “We can also conclude that fuel cost savings and sustainability are becoming significant factors for those considering telematics, and improved driving behavior continues to be the number one reason for implementing a telematics solution.”

According to Donlen, a provider of fleet financing and solutions for vehicle fleet management, ROI is an important factor when choosing a telematics solution. Among fleet managers surveyed who are considering a telematics solution, 46% said the ROI was unknown. A similar result (40%) was seen among fleet managers already using telematics solutions.

Respondents were grouped into three segments: fleets using a telematics solution (21% of respondents), fleets considering a telematics solution (34%), and fleets not considering a telematics solution (45%).

Not surprisingly, the number of vehicles in a fleet appeared to be the largest contributing factor to whether or not they use telematics. For fleets with less than 100 vehicles, 80% of the respondents said they are not considering telematics. But for fleets with more than 300 vehicles, 80% of respondents either said they are considering or already using telematics.

Apparently, some key reasons for not adopting telematics could be attributed to lack of understanding or ignorance about what telematics solutions can provide. When asked the primary reason for not considering telematics, “no business need” was specified by 69% of the respondents. The cost of telematics was not as much of a factor, with only 17% of respondents specifying that reason. The most frequent “other” response was telematics was not being discussed in their organization as a possible solution.

On the other hand, the top three reasons given for implementing telematics indicate a full understanding of the technology’s potential: driver behavior, route productivity and fuel savings. Donlen found the most significant difference between current users and those considering telematics was the effect on fuel savings. Among fleets using telematics, fuel savings ranked as the No. 3 reason while it was No. 2 for fleets considering telematics.

The lowest-ranked reason among those already using telematics was sustainability initiatives— just 20% of fleets indicating it was a factor. But Donlen pointed out that sustainability as a reason for those considering telematics was almost double that at 36%, “clearly demonstrating an increased awareness or mandate towards sustainability.”

The survey results and a link to a downloadable PDF version can be accessed by clicking here.

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