TECHNOLOGY

Why the ‘connected car’ is not just a consumer innovation and how it can revolutionise business

Why the ‘connected car’ is not just a consumer innovation and how it can revolutionise business

Beverley Wise, Director UK & Ireland at TomTom Telematics

Beverley Wise, Director UK & Ireland at TomTom Telematics

Beverley Wise, Director UK & Ireland at TomTom Telematics

The buzz around the ‘connected car’ doesn’t look likely to die down any time soon.

Vehicle connectivity is primed to deliver a huge range of innovations in motoring, from assistance finding available parking spaces to tech that can analyse driver mood and reactions to then suggest driving tips or music recommendations.

However, while much has been made of the impact vehicle connectivity can have on motorists’ lifestyles, there has been relatively little discussion about the potential for the technology to drive process improvements and efficiencies for business.

Often, vehicles are a significant source of inefficiency within an organisation. There are a number of reasons for this, whether it’s down to an ‘out of sight, out of mind’ attitude or the fact that company cars, in particular, are frequently viewed as employee perks rather than mobile workplaces.

But vehicle connectivity can help businesses to take control of this area in order to reduce costs, improve process efficiency and cut environmental impact as well as boosting employee safety, productivity and wellbeing.

Harnessing data for insights

The key to such gains is effectively harnessing the vast array of data collected by modern vehicles, and turning this into valuable insights for business.

Data collected can cover everything from the amount of fuel used by each vehicle – and therefore expenditure on fuel – to the driving style of employees and how this might impact upon levels of safety and well-being, efficiency and productivity.

Connected car technology simply allows this data to be transmitted back to the office to provide management with much greater visibility into operations in the field.

Of course, this data flow is not completely new – after all, telematics has been helping fleet operators to track their vehicles for many years – but it is the shift in focus from ‘tracked’ vehicles to connected ones that is significant.

Telematics technology has advanced to the point where it can now act as a ‘connectivity hub’, providing open application programming interfaces (APIs) that allow third-party developers to create new software and hardware integrations, or mobile apps. This essentially means any vehicle can become ‘connected’, not just those vehicles that roll off the production line with such functionality already in-built.

Reduced cost through greater visibility

But what does this mean for business and the finance function in particular?

Where old school telematics may have provided a better fit for companies that consider the vehicle fleet to be a core business function, the latest innovations in this area have much wider scope.

One of the core areas where quick gains can be made is the analysis of driver behaviour. Although many companies treat fleet as if it is a fixed cost, it can actually fluctuate quite significantly depending on how employees drive.

Telematics provides an opportunity to address this by continually monitoring performance – including factors such as speeding, idling, and harsh steering or braking – to highlight where improvements can be made to boost fuel efficiency and safety. Reports can be created where each driver is given an overall performance score, allowing easy analysis and benchmarking, but managers can also drill down into the data to identify the root causes for inefficient performance.

This data can form the basis of wide-ranging programmes designed to improve performance on the roads, which can deliver sizeable results. For example, gas distribution firm SGN implemented measures to save the company £1 million by introducing a driver behaviour programme underpinned by telematics across its 2,000-strong fleet.

Typical savings that a business might be able to achieve with the help of a telematics system include up to 15 per cent on fuel costs, up to 18 per cent on maintenance costs and up to five per cent on insurance.[1]

Process automation for smarter working

This type of performance data is useful enough on its own but an even more powerful approach might see vehicle data integrate with customer relationship management (CRM) software, giving managers the opportunity to compare driving data against sales performance. The cost of mileage claims and fuel can potentially be measured against completed appointments and sales to develop a more detailed picture of employee effectiveness and productivity.

But this is only one example of where an integration can provide added value.

When it comes to invoicing, vehicle connectivity allows invoices to be generated automatically when a customer signs for delivery on a mobile device. Data passes from mobile hardware to vehicle and then onwards to the office, allowing an accurate invoice to be created and sent within minutes, helping to promote quicker cash flow back into the business.

From a compliance and cost control point of view, an integrated solution that draws on data from the vehicle can help to cut down on administration and human error related to mileage claims. Telematics can provide accurate GPS location and trip mileage data that is fed directly into back-office software, completely removing the need for paper records of mileage claims. Records for tax compliance can be created with less fuss and the possibility of false claims can be eliminated.

These are just examples and the range of integrated solutions might also include enterprise resource planning (ERP) and invoicing, or a range of mobile hardware, such as printers, tyre pressure monitors and on-board cameras.

Bringing drivers into the loop

Employers aren’t the only ones who will benefit from the growth in connected car solutions, as the convenience and functionality found in consumer tech can be translated to apps for business drivers too, along the same lines as those used for mileage claims.

Collaborations between telematics providers and fuel card companies, for example, have enabled drivers to receive helpful information on mobile apps, such as the location of fuel stations, along with feedback on their performance behind the wheel. At the same time, back end fleet management portals can combine driver behavior data with fuel transaction information from the fuel card provider.

Leasing and rental providers have also started to develop consumer-style mobile apps for business drivers that provide useful functionality, such as a vehicle location finder, parking assistant and engine health check.

As we move to more flexible models of employee transport, such technology can also be used by employees to help them allocate ‘mobility budgets’ – monthly allowances set by employers – on the most appropriate and cost-effective modes of transport that available to them. This might be their company car, use of car-sharing scheme, public transport or even an electric bike.

A bold new era is emerging, where businesses can identify the most appropriate method of transport for different situations, perhaps thinking in terms of a ‘pence per mile’ cost. This will only be made possible through data analysis and connected vehicle information is one of the key sources that will help to drive this change.

So, far from delivering benefits solely in terms of personal convenience, the connected vehicle can have a major impact for business, helping to unlock new cost savings and efficiency that previously had not even been considered as a possibility.

[1] The assumptions for maintenance costs, insurance costs and estimated savings given are estimates by TomTom Telematics in cooperation with DEKRA Akademie GmbH.

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