Justifying Your Telematics Investment

When looking to implement telematics, one of the biggest challenges is often determining where to start. Telematics tech was once very limited in scope. However, there are many iterations, and depending on your company’s goals, you will need to make use of some or all of the options available.

On one end of the spectrum, telematics has become extremely simplified: units with powerful internal batteries, through metal locating capabilities and extreme portability with no external antenna or wiring. These units are ideal for smaller assets or lower value items where the locator can be quickly stowed and redeployed when the asset returns from the job. The primary function is locating, with the benefit of theft protection, reduced insurance premiums and logistical improvement.

On the other end of the spectrum, telematics has become extremely complex and data rich. Some available solutions tap directly into the machine’s Controller Area Network (CAN bus) or electronic control unit (ECU) and remotely deliver a wealth of information from runtime, fuel consumption, idle time, rpm, diagnostic fault codes, temperatures, pressures and much more. Armed with this data, you can increase machine uptime, reduce service and repair costs and fully optimize your fleet mix.

As one would expect, there are a variety of options between these two telematics extremes. Some solutions deliver basic location and runtime updates, which may be all you need for a particular application, while a full remote diagnostic readout delivers the needed data in another one.

As you begin exploring telematics, the first task is to establish measureable goals for the technology, determine the data you need to drive success and then identify the initial asset types for the deployment and roadmap for rollout across the fleet. The following lists several proven goals and the corresponding data to justify the investment of telematics:

1. Goal: Right-sizing your fleet and a decrease in fleet size of 3 to 8 percent, while maintaining the same level of work Data: Running an analysis of utilization by asset type based on actual run time makes it easy to see where your fleet has an excess and where you may need to add a machine. For example, you have 30 dozers in your fleet and requests are coming in for additional ones. A quick utilization report shows you have 15 dozers running at 80 percent utilization for the last quarter, 10 dozers at 50 percent utilization and five dozers at 20 percent utilization. The reality is that you don’t need more dozers. In fact, you can shed a few to bring up the overall production of that asset class within your fleet, which also frees up the capital you had tied up in nonproductive machines. Based on this utilization analysis, you may also find it more economical to rent specific equipment as needed.

2. Goal: Improved jobsite billing of 10 to 30 percent Data: Some telematics systems will empower you to designate boundaries on their mapping software which you label as your jobsites. As assets are moved into those areas, they are assigned to the job, and as they are moved elsewhere, they are reassigned automatically without manual entry. This allows you to run jobsite reports to see how much your assets are actually working, which creates accountability. No longer can machines be hoarded on jobs while a similar asset is rented on a project down the road.

3. Goal: Reduced equipment idling by a third, on average The hour meter is one performance metric, but it doesn’t differentiate between “on time,” “working time” and “idling time.” Fortunately for you, a proper telematics system does. The obvious benefit lies in turning off the machine when it idles excessively by implementing companywide idling goals and measuring them frequently. Reducing the idle time will dramatically cut your fuel bill in the short term and also give you a realistic usage barometer for that machine. Now, you will schedule service not off the hour meter on the machine, but the true “working time” meter on the hardware unit, which means you will reduce the number of preventive maintenance cycles (PMs) required annually. Consider a service interval at 250 hours and a machine with 30 percent idle time, equating to 75 hours of idling per service. This means that every fourth PM is due to the idling hours alone, which is not a true indicator of usage. As you reduce your idling or simply schedule service off the actual working meter, you extend the PM interval and decrease the number required.

4. Goal: Reduced service and repair costs of 15 to 40 percent Data: Using a proper telematics solution provides a proactive service scheduling function as well as a reminder if an asset is not serviced on time, thus preventing any from falling through the cracks. The result is fewer failures and less repair costs and equipment downtime. Additionally, threatening machine health conditions, such as critical lamp statuses, temperatures and pressures transmit, in real time so corrective action may be taken to prevent a catastrophic failure. Remote access to fault codes and the diagnostic freeze frame empowers your technicians to perform an initial diagnosis without an investigative trek to the machine. Once reviewed they can ensure the right parts and tools are in their truck for a single visit to get the downed asset back up and running, while giving you the double savings of halving both the technician time and the machine downtime on the job.

5. Goal: Insurance savings of 20 to 60 percent Data: Most telematics systems also double as theft protection systems. Ask your insurer what break they will give you for theft protection. At the very least, you will be reducing your deductible exposure.

6. Goal: Get more bids profitably Data: Armed with the real utilization information from previous jobs, your estimators will now map that to future bids. Rather than estimating, they are using actual numbers from identical work to make their bids more competitive and profitable.

Questions to Find the Best Fit

A quick internet search for “telematics” or “equipment monitoring system” turns up dozens of results, so how do you select the right one for you? Here are some important factors to consider:

• Provider background—Now more than ever, make sure your provider has been in this business for years and has the capacity to support you through the product’s life, as well as your own telematics growth. Is the product and company proven in your industry, or are you one of the first customers for your intended application?
• Support and training—Are you buying from the OEM, dealer, reseller or another channel? Always be sure to identify where technical support and/or training will come from, and if there is an additional charge for those functions. Is tech support phone or email based, or both? Is it available around the clock every day? Is training performed on site, webinar, tutorial videos or user guides?
• Hidden costs—The transponder unit will run between $200 to $1000 and quantity discounts are often available. The monthly communication is typically between $10 to $40 per unit per month. Some providers will levy an activation fee, annual maintenance fee, multiple user fee and a software license fee.
• Long-term contract—Most providers require an airtime contract, extending from anywhere between 1 to 5 years, similar to a mobile phone agreement. There are a few “no contract” providers who bill month to month, giving you the option to stop service at any time.
• Deployment coverage—Even if you don’t plan to track all your trucks, equipment, trailers and ancillary assets initially, does the provider offer an integrated system for everything? You may start with your equipment and find truck tracking to be a logical next step, or a planned one within your deployment roadmap. Will the same vendor provide all systems, or will you use multiple providers across your fleet?
• Wireless coverage—Do you operate in areas of acceptable cell coverage, or are some of your jobs completely off the grid? Do you work internationally? Depending on your needs, your provider may need to have a pure satellite communication product and be certified to operate in other countries.
• Data integration—Chances are good you have a powerful ERP or legacy software package in place already, you just need to feed it field data. How does your telematics data get into that software package? Does the provider offer API, SOAP or is a custom integration required? How much will it cost to bring your data into your ERP?
• Data and report access—Do you need to log on and run reports daily, weekly or monthly, or can you automate this process for email delivery? Will you or your team need a mobile optimized or app version of the software?
• Customization—As you grow with your telematics provider, you may require specialized data collection or reporting needs specific to your operation. Can your provider customize inputs on their hardware to meet your needs? Can reports be customized at the software level? What are the costs?
• Data storage—How long does your telematics provider store your data? What happens to it after that? Can you pay to have it maintained longer?