What do you think of when you see or hear the word, “telematics?” To this day, one of the most common responses is, “Big Brother.” That’s because the original need for a telematics solution was to provide basic location information on drivers. However, the technology and the approaches people take to it, have evolved over the years to solve more strategic business challenges and initiatives.
This article will discuss the evolution of telematics from a location-based solution to a higher-level focus on driving success by connecting data to strategic initiatives.
Level 1: The Tactical Approach
Initially, businesses with vehicles (of any size) usually need a solution for a simple problem with many consequences – a lack of information on vehicle locations. Not knowing where vehicles go after leaving the yard and what they do while they are out on the road causes many headaches in the event someone calls in to complain about a driver speeding, not getting somewhere on time, etc. Without this information, it’s hard to either verify or debunk these claims.
Telematics was initially used as a tactical solution to solve these problems, which we refer to as the first level of return on investment (ROI) for telematics, such as driver behavior and fleet visibility. While it helps businesses solve challenges they are facing by providing real-time vehicle locations, it fails to deliver the maximum ROI potential because it lacks in two key areas – communication and business strategy. A lack of communication leads to the classic fear-based “Big Brother” perspective.
Level 2: Communication = Maximized ROI
In the second level of telematics, companies begin to communicate and connect the “why” for drivers instead of focusing on disciplinary action. When drivers understand the reasons and goals behind the project, it improves efficiencies for businesses and makes coaching sessions around the technology far more effective. The approach to telematics is now a more holistic and operational one where people start moving away from the “dots on a map” mentality. The mindset becomes more of a scorecard-based approach relying on certain key performance indicators (KPIs) to improve driver behavior and efficiencies, which is now communicated throughout the organization.
Businesses now realize to maximize ROI with telematics, they need to communicate these KPIs and project objectives throughout the organization, starting at the top of the company and filtering down to the drivers. By increasing communication and focusing on reducing KPIs such as speeding, idling, and miles driven, companies start seeing the maximum ROI from the technology. Receiving this ROI drives a more strategic focus, which leads to the third level of telematics.
Level 3: The Strategic Approach
Taking a more strategic approach to telematics gives birth to an external focus on initiatives such as customer experience and competitive differentiation. Businesses start thinking of strategic initiatives first, then looking to see how telematics data can help drive success in these areas. Companies in the third level of telematics are strategically aligned with connecting the data telematics provides to their strategic goals.
Examples of this are seen when service companies want to decrease their wait time windows for customers in order to improve the customer experience. This leads to utilizing telematics data to spot inefficiencies they can improve in getting to customer sites faster, thus reducing window times and providing a better customer experience.
Connecting the Data Dots
There’s nothing wrong with a Level 1 or Level 2 approach to telematics. If the business challenges you face are a simple lack of location information or needing to reduce metrics like speeding tickets, then taking these lower level approaches might be appropriate for you.
However, when you approach telematics from the third Level, you will receive the maximized ROI and benefits of the first two levels automatically along with many more.
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Originally posted on Automotive Fleet