In my previous article, I talked about recent developments in the consumer telematics and infotainment markets and how these developments are best translated into the fleet space. One important lesson is that the sharing of an industry standard platform encourages joint collaborations and opens up new customer markets. A shared, standard platform is almost a mandatory requirement for the active development of a specialized ecosystem like fleet. It reduces one of the key barriers preventing entry into that market—the non-recurring engineering (NRE) cost per customer. Since each additional software port incurs more or less a fixed cost per platform tackled, using your limited engineering muscle on the platforms reaching the largest number of potential customers only makes sense.
To find a real-world example of the benefits achievable through a standard platform, I discussed fleet safety strategy with Ed Dubens, the CEO of Interactive Driving Systems (IDS is a business partner of ATI). IDS is a 20+ year-old company recognized for worldwide leadership in driver safety research, programs and education. One of their products, Virtual Risk Manager (VRM), allows fleet managers to rank the relative safety risk of their drivers. VRM acquires and combines numerous sources of data on driver behavior to provide an at-a-glance view of the entire fleet’s performance. Fleet managers have the responsibility of protecting the lives of their drivers and the communities in which they work, and they must do this while following corporate safety guidelines, avoiding liability concerns, and upholding governmental policies. This makes maintaining a “crash free” culture of utmost concern for most fleet managers.
Companies using VRM find that making their drivers aware of their performance translates into a significant decreases in crashes, safety violations, and driver issues, while also improving fuel efficiency. One company reported a 70% reduction in speeding 15+ mph over the limit, 30% reduction in aggressive events, and a 40% reduction in idling six months after their installation, with an overall result of a 15% reduction in their reported collisions per month. Some of the customers using VRM employ between 20,000 and 50,000 drivers, which means that even a slight percentage improvement can immediately start realizing savings and safety benefits.
Just as green scores provided by Leaf, Volt, or Prius hybrids encourage fuel savings through competition, VRM’s results are visible by the drivers allowing them to compete for better rankings. One might expect that drivers will distrust or resent a safety monitoring system, and that is often the initial reaction. However studies done by IDS customers have shown that a heightened awareness of undesirable driving behaviors not only improves driver performance, but also eventually leads to the system being embraced and even appreciated by the drivers.
While Virtual Risk Manager is fed with driver performance data secured through law enforcement and government agencies, IDS is able to significantly augment this historic information with real-time performance data gathered by fleet-installed telematics systems. Gathering real-time data has historically presented a challenge, even for an industry leader like IDS. Dealing with different capabilities and multiple proprietary telematics systems for each new opportunity introduces a big burden on engineering management. This is why IDS chose to use ATI and their Geotab based platform to reach the greatest possible customer base. IDS uses ATI’s server-side interface to extract driver performance data from the Geotab telematics module—providing a price-point that’s attractive to their customers. And adopting a standard platform lets IDS focus on their differentiators instead of wrestling with the maintenance and management of numerous software ports.
What’s more, IDS has found this new platform gives them a way to enable a whole new fleet insurance business. Insurance companies live or die by accurately assessing risk. While they’ve gotten pretty good at predicting who will or won’t be at risk of a collision, they’d much rather have hard data. That’s good, because fleet managers using Virtual Risk Manager combined with ATI’s Geotab platform have both historical and real-time performance data on their drivers including incident, collision, license check, and telematics information. This complete and up-to-date data allows for much more accurate risk assessments, making those fleet managers choice customers for insurers. In fact, insurance companies are willing to compete for these highly qualified clients, and the healthy competition drives down premiums. IDS Financial is a new business unit created to take advantage of this win-win situation: it maintains a pool of interested insurance companies, allowing them to compete for valuable reduced-risk fleet clients. And the fleet companies pay less for their insurance as a side benefit of using the combined IDS/ATI solution.
Making the most of a standard platform does require some adaptation to your strategy. Most importantly it requires letting go of the need to create (or control) your own custom fleet telematics system. Perhaps not every company will find as many benefits as IDS has been able to realize. But this example shows how an existing business can reach new customers and create new opportunities by focusing on their strengths. There’s a lot to be gained by sharing.
Latest posts by Frank Pellitta (see all)
- The Use of Telematics in the Preventative Maintenance Aspects of Fleets - April 13, 2015
- Sharing standards, safety, and savings - December 30, 2014
- Learning from the Connected Car - November 14, 2014