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Past Issues

June 2005

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Getting a clear picture of a highly competitive and complex industry is not always easy, especially when new products and services hit the market with astounding frequency. FleetWatch's Paul Collings asked a selection of stalwarts - and some newcomers - in the fleet management (FM) and tracking industry for their 'freeze frames' on a number of pertinent issues.

FW:
In terms of fleet management and tracking, what's new (in general and within your operation) in the last six months?

Control Instruments OmniBridge:
Our bureau service offer has really taken off and has been well accepted by our customers. The whole concept of a fully managed service for a single (fixed!) monthly fee has been met with positive response and overwhelming demand. This service was further enhanced by the launch of our GPRS service last year which, with the extremely low cost of GPRS, offers real time tracking, exception management and automated end-of-trip downloads. This gives depot managers immediate information for driver de-briefs and means our service has evolved into a truly real time offering.

SmartSurv:
The industry has indicated a need for more variety in product ranges and this, together with the need for more up to date technology required in the private tracking market, has resulted in a wider choice from SmartSurv Wireless. In terms of fleet management, we have launched two new products, namely SmartTrak Lifestyle and SmartTrak Elite to go with our already established SmartTrak Classic.
SmartSurv products utilise a common denominator by way of GSM/GPRS, GPS and Mapping data and Management Platform. Together, these facets combine to offer individual products that can operate independently or together. This also allows SmartSurv Wireless to develop new products without the need to re-invent the wheel as the basic platform already exists.

This means that our new Lifestyle product - although intended for the private market -, utilizes the same platform as our Classic product. From a fleet management perspective, this gives the client a more cost effective option that can operate using the same software as the Classic units. This is ideal for situations where the fleet is comprised of multi-level vehicles such as trucks, delivery vans and company cars.

The Elite product is, on the other end of the scale, offering more functionality than the Classic unit. Further inputs and outputs can be managed. SmartTrak Elite supports a wide range of inputs and outputs (6 digital inputs and 6 digital outputs) either built in or via optional expansion modules. All wiring entering the main enclosure is via over moulded sealing glands.

Orbtech:
There is a greater emphasis on managing risk and fuel - more so now as a result of increase in fuel costs - and immediacy of information relating to where the vehicle is and what is it doing right now. It has been calculated by one of our clients that if a vehicle deviates 20 km from its calculated route, it would cost them an additional R79 000 per year per vehicle. On their fleet of around 100 vehicles, that is R790 000 loss or profit they are not making. The realization that fleet management starts with driver and vehicle management and managing the risks associated with this is starting to become a norm in the industry.

Fleet Runner:
Fleet Runner's live tracking system using GPRS is totally functional and running. We have further developed software integration with one of our large customer's back office software. 


FW: 
What issues are top of mind right now?

Control Instruments OmniBridge:
With the renaming of our company from Control Instruments Fleet Management Services to Control Instruments OmniBridge (CI OmniBridge), and in keeping with our mission to "connect people to their assets anywhere", we are seeing significant growth possibilities for our bureau service, not only within the vehicle and fleet management industry but in the broader field of connecting people to their assets.

SmartSurv:
Offering further cost savings in terms of insurance is of paramount importance. For this reason SAIA approval is a major focus as we are currently bringing new products to market that will offer both functionality and cost effectiveness. We cannot imply that we have received approval at this stage as the signed paperwork has not been received but we can say that the tests have been completed and the paperwork should be along shortly.

Orbtech:
The fact that costs associated with tracking and fleet management systems are under serious scrutiny in the industry. Where fleet operators would traditionally not pay attention to issues like cellular bills associated with these systems, we are finding more and more of them actually paying attention to some of the excessive bills being presented to them. A case in point is where a new client we are dealing with forced a R 97 000 credit from its previous, well known, 'Fleet Management System' supplier. These costs were an accumulation over a few months of excessive cellular SMS charges generated over and above what the supplier presented and sold to the client as to what its average bill should be.

Fleet Runner:
Full utilization of generated information to provide immediate tangible cost saving benefits and value.

FW:
Is GPRS settling down and delivering real cost savings and efficiency?

Control Instruments OmniBridge:
Being the first South African provider to offer GPRS services in a bureau environment, CI OmniBridge has led the way in pioneering GPRS - particularly in the vehicle and driver management arena. What customers primarily do not appreciate is that GPRS was initially envisaged to be an information delivering mechanism to handle pulling of content by individual consumers, whereas in a fleet management environment, one is effectively doing the opposite; gathering data and information from the vehicle then processing that and delivering information to customers over the internet. This is a significantly more complex task than one might envisage.

However, CI OmniBridge, with our careful management and highly skilled development team (and I might add our work with not only local GSM network providers but also international network providers around the world), has been able to take full advantage of this technology and its application to fleet management. This has meant that our customers both local and internationally (CI OmniBridge via SiemensVDO sells products in over 40 countries world-wide) have been able to gain significant cost savings in the form of lower communication costs - a real tangible benefit we pass onto customers.

SmartSurv:
A resounding yes! As the first company in Africa to launch vehicle surveillance and tracking on the highly cost effective and secure General Packet Radio Switched (GPRS) platform, we can say that the risk has paid off. GPRS has come down in price by 80% making it now not only much faster than SMS but much more cost effective. SmartTrak Classic relies heavily on GPRS but our system still uses a small percentage of SMS for panic alerts, for example. To begin with, this meant that our costs for GPRS were many times that of our SMS costs. However, with recent price cuts, our costs for each are almost the same but our usage for each has remained unchanged. At the end of the day it is the customer though that reaps the benefits as these cost reductions are passed directly on to them.

Orbtech:
GPRS is here to stay. We are in the privileged position to be able to directly measure the difference between our older (Cellular Data) and latest (GPRS) systems and even though our older system is more advanced than the SMS type systems, it is phenomenal to see the improvement on efficiency, flexibility and in vehicle/driver management ability. Add to this the ability to view the movement and associated information in "James Bond" fashion on desktop PCs, and the advent of GPRS is in reality putting "total control" back into the hands of the fleet operator.

Fleet Runner:
GPRS most definitely offers cost saving advantages and for the most part, is as efficient as the GSM network - we use GSM as a full back.

FW:
Is 'real time data transfer' actually a reality?

Control Instruments OmniBridge:
CI OmniBridge has pioneered what we term Communication Cost Control (r) - which lets us deliver information to our customers in the most cost effective manner, either via manual transfer mechanism or wireless including GSM (data calls, SMS and GPRS). GPRS is real time data transfer in reality and we are seeing that where this is a requirement, customers can drive real cost savings and effects into their business. Despite this, CI OmniBridge will continue to develop and expand on their non-real time savings for customers who demand that.

SmartSurv:
Yes, it's working for us. GPRS is fast enough to provide up-to-date information that the client requires. Of course it's not real-time yet but it's as close as required for the application and environment we use it in.

Orbtech:
Yes. It takes some skill to manage it, but it is a reality.

Fleet Runner:
Real time data transfer is a reality but the actioning thereof is application dependant. A high update facility provides the necessary real time if needed. Real time becomes critical only when used for recovery purposes and just on time distribution and logistics planning.

FW:
Is VESA effectively lobbying for insurance premium discounts?

Control Instruments OmniBridge:
No.

SmartSurv:
No comment on VESA. We are going down the SAIA route as they are providing the insurance groups with information to reduce insurance premiums.

Orbtech:
We are aware of instances where this has been aggressively pursued by VESA. Certain management within VESA is also aggressively promoting its VESA members to the "end-user" industry (i.e. corporates, government, municipalities, etc.) in general as preferred suppliers of "vehicle security" solutions and the benefits associated with that.


FW:
Are new players in the market a threat to the established service providers?

Control Instruments OmniBridge:
While sometimes perceived by customers as a threat to the established service providers, newcomers to the market are often more of a threat to customers who get taken in by so-called new and cheap technology which is often not technically sound and often not backed by a sound and sustainable business model. CI OmniBridge prides itself on being a well established technology provider being the sole and exclusive design and developer of the Siemens VDO Fleet Manager Product range which has been in the market for over eight years now. Our proven track record means that we can, with absolute confidence, demonstrate the benefits that long term customers have enjoyed as a result of selecting us, an established service provider.

SmartSurv:
Yes, absolutely. We are effectively new players in this market and we are causing problems for more established companies, not because we want to but because some of them rely on outdated technology and reputation. The customers of today are not only looking for solutions, they are also looking for value which our products deliver. We are also aware of competitors doing outlandish presentations and breakfast meetings after learning that we have been proposing to their prospects. By the same token, we have to be weary of other new players. Our Classic product is over two years old now but thankfully we have new products currently available. We need to stay abreast of the market as much as anyone because in this business, technology moves so fast it's easy to be caught napping.

Orbtech:
Only to those who have not adopted to "state-of-the-art" technology and service offerings. This is to say, if the new player complies to this themselves. The threat does not necessarily lie in existing service providers being threatened by the new player, but what damage the new player can create in the market place through inexperience and over zealousness. 

Fleet Runner:
The OBC and tracking industry is a relatively new industry and the growth of the industry has been hampered by a continuous stream of new entrants to the market who either fail financially or in the delivery of the solution. These continuous failures have tainted the reputation of the more credible suppliers in the market.

New players always pose some type of threat be it negative or positive. New technologies being introduced, which can be beneficial to the industry, also put huge strain on existing suppliers for further R&D and the cost of getting new technologies to market. Lower costs are a common result but these are then not always sustainable and ultimately affect the integrity of the market and suppliers. Sustainability remains key to the industry - not only in terms of supplying product but also in terms of maintaining the support structures. Products that are not ready for the market impact negatively on customer perceptions and actualised results.


FW:
Are fleet operators, in greater numbers, embracing FM technology to improve efficiencies or do your sales efforts meet with resistance?

Control Instruments OmniBridge:
We at CI OmniBridge believe that the fleet management market is maturing. With this move into the volume market, we are seeing that fleet operators are most certainly embracing FM technology and are feeling comfortable that with globally established market players like CI OmniBridge and Siemens VDO entering and investing in this technology, the risk for customers is very low by comparison to the ongoing benefits that they can gain from that investment.

Orbtech:
Contrary to popular belief, the fleet operator is not interested in the technology insofar as being the "greatest-latest" technology in the world. What they are more interested in is what the system can do to increase their efficiency and enforce cost saving. Therefore, we have always adopted the approach that our service offering to the client has to be far greater than putting a dot on a map indicative of the vehicle's movement. We take a more proactive approach with our clients such as offering systems and solutions to effectively and efficiently manage areas such as fuel, administrative processes and procedures, off- and on-road risks, front and back-office solutions, software and system solutions, to give the fleet operator more effective tools to be more efficient, productive and profitable.

My personal belief is that there is resistance prevalent in the market but this relates to other issues such as fleet operators being inundated with "tracking" offerings which do not address the real issues. There are also over-zealous salesmen who promise the world but deliver a grain of sand. Add to this poor back-up and after sales-support, insufficient "partnering" between the service provider and the client, and so on.

Fleet Runner:
Fleet operators are realising the need for FM products, but have not always been able to utilise the full benefits. Many have been burnt by being guinea pigs for new companies and have been saddled by products not ready for the market. Improved competitiveness, utilisation and the need to reduce operating costs should be the driving motivation for using FM technologies.

FW:
What are the common objections to purchase?

Control Instruments OmniBridge:
CI OmniBridge is seeing that fleet operators more and more want to establish what the total cost of ownership is (that being the cost over the life-time of the product including communication costs and maintenance, not just the initial purchase price). Our FM web bureau service offering is a very attractive option as CI OmniBridge offers the total service for one fixed monthly fee, thus total cost of ownership is very easy to quantify. Conversely, where the total cost of ownership is not easy to quantify our customers fear hidden costs, I would imagine that would be the most common objections to purchase.

SmartSurv:
Cost is always an issue. However, as we offer one of the most cost effective options available, this is often overcome. Understandably, concerns over the reliability of the data can become an issue. The simplest way for us to overcome this issue is to let the customer experience the product in a real scenario with their own vehicles by giving them a demo unit to trial for a period of time. Once the demonstration period is over, the customer is more often than not very happy with the product and the deal is closed in due course.

Orbtech:
Insufficient effective supporting management tools. "Been there - seen that - you are all the same", Cost, cost, cost, cost and cost. Once bitten, twice shy, and instability and poor delivery of information from past systems.

Fleet Runner:
Price, justification of benefits and high monthly costs.


FW:
What is the trend with regards to outsource/bureau offerings versus in-house FM?

Control Instruments OmniBridge:
At CI OmniBridge we are seeing a massive swing towards our Bureau "outsource" offering, away from the other option we present which is buying and running the systems yourself. Once again, we attribute this to transparency of the bureau offering where the total cost of ownership is clear to us and the customer can make an informed decision and is clear in their expectations. Instead of having to buy boxes and do it themselves (which we do offer as an option) they now prefer to subscribe to the Bureau and to buy the information which CI OmniBridge is responsible for delivering.

Orbtech:
We have always offered a bureau service through our 24-hour operations centre. We do find that the fleet operator needs to drive and handle his fleet management on an in-house basis but should not be involved in incident management, which is a component we believe should be outsourced. In other words, the greater part of the FM and Risk Management should be handled at the coal face but certain critical components should be outsourced as a bureau service. To support this, we employed specialists in their fields to guide and assist our clients in setting up in-house structures and procedures to empower them to be effective in this regard.

Fleet Runner:
Initially FM products were offered with either/or options. Bureau services due to core incompetencies - both in data transfer capabilities and structurally - failed to deliver what they promised. This prompted the move to in-house report generation. However, the core customer needs remains utilization and application of data presented rather than information collection and collation. Management of the data by the customer remains core to achieving competitiveness and optimising resources and driving operating costs down. This all creates a vital need for partnering each individual customer through bureau functionality. Incorporating the FM systems into an integral part of what we do to achieve our business objectives is how the client achieves full benefit.


FW:
What are your thoughts on 'boxed product versus custom solution'? To what degree does your company tweak/customise its solution to meet specific customer needs?

Control Instruments OmniBridge:
At CI OmniBridge we believe that where possible, customers should - and generally like to - invest in standard solutions as this reduces their risk significantly. With that in mind, CI OmniBridge, through the Siemens VDO FM product offering, offers what must be the broadest FM solution available in the world today. Even with our broad offering though, we do recognise the need to, on occasions, customise to meet specific customer needs. We have found that this is far more easily done where we deploy those customizations through our FM bureau service as then CI OmniBridge has committed to the total delivery of the solution (i.e. the customer is merely buying the information). However, for those customers not on the bureau service, we also offer powerful Software Development Kits that can be used by third parties. 

Orbtech:
Even as there are a vast variety of common components in the management of a business within a specific industry, so too are as many differences in management style. Boxed products are fine if you are looking for a PC operating system, a spreadsheet solution or word processor. Where it comes to business management, and more specifically to Fleet Management, custom solutions is a must.

Fleet Runner:
Boxed products imply limited flexibility so customisation is imperative. The major advantage of Fleet Runner is the customisation power of the software. Hardware architecture must include expandability. Fleet Runner can - and does - offer a range of reports with specific integration into back-end software customisations. We offer a range of OBCs from the fundamental to top range GPS GPRS systems. A large component to success is managing the driver and establishing incentive schemes that are imperative to success. Further options include RF downloads, fuel integration, engine protection interface, event logging and more.


FW:
Are FM systems being effectively integrated into OBCs and back office software e.g. ERP/CRM systems etc?

Control Instruments OmniBridge:
Together with SiemensVDO, CI OmniBridge has a global system integrator strategy whereby we have an accreditation program and offer software development kits backed with training and support for integrators that wish to use our solutions in conjunction with ERP, CRM, route planning and/or logistics back-end software systems. Over the years we have seen a steady increase in the number of integrators partaking in this program with a great degree of success.

Orbtech:
The truck manufacturers have not allowed for the integration of FM systems into OBC's. However, we believe this will happen in the very near future. This is the time that we will agree that the "Black Box" and supportive management software can be classified as a fleet management system, as this will give you access to all relevant information - mechanical, performance, consumption, movement, etc - that will empower the fleet operator to employ overall fleet management principles on the fly with the information fed through such an integrated system. Even though integration into back-office software is currently done, there are two factors that affect this becoming a market norm or standard fleet management solution. One is the limited information available from the "black box" and the second is the fleet operator's support software and IT infrastructure (not all the cases, but in the majority).

Fleet Runner:
This is a trend but not in the majority yet. It is, however, a critical component to total success and utilization of the fleet management information gathered. FM needs to be integral to the customer achieving his business objectives. 

FW:
Will CANbus technology impact at all on FM systems?

Control Instruments OmniBridge:
At this juncture, the challenge for all of us providing FM solutions - both here and globally - is how to effectively deal with rapidly converging markets and technologies in the most effective way to benefit our customers. Examples of this convergence are numerous but, for example, in some markets we have seen the tracking, recovery, fleet management, logistics, messaging and navigation markets converge rapidly over the past years. On the technological side, the biggest convergences have been in the area of communications - Wireless, GSM, CSD, SMS and GPRS - and we would see this continuing with technologies like Wi-Fi and Wi-Max coming to bear on our industry.

Orbtech:
Most definitely. Those that have the ability (technology) to capitalise on this will be able to grow their solution offering to the client. Thos that don't will be left behind. In our industry, the advent of CANbus integration will be the next best thing to sliced white bread.

Fleet Runner:
The OBC and tracking industry is a relatively new industry and the growth of the industry has been hampered by a continuous stream of new entrants to the market who either fail financially or in the delivery of the solution. These continuous failures have tainted the reputation of the more credible suppliers in the market.