Telematics survey indicates poor ROI but good satisfaction rating
Source: FleetAnswers In a recent survey of fleet management professionals, several fleet managers indicated they were not seeing a return on investment as they had hoped from their telematics systems. A closer look at the reasons behind these disappointments may help other fleet managers make better decisions when purchasing a system or implementing the system they have.
The Majority of Fleet Managers Indicated Poor ROI
Of the fleet managers who answered the question only or 33.3 percent, indicated they had received an ROI on their telematics/GPS system. The remaining 66.7 percent indicated they had not.
For those who had seen an ROI on their systems, four indicated they saw the return in a year, while three indicated it took 6 months. The remaining all had different responses of 4.5 months, 60 days, 9 months and identified some item in the first year. This may indicate that some of those who responded "no" may not have had enough time with their systems to see a return, as it took the majority at least six months to see a benefit.
Reasons for a Negative Response Varied
Interestingly, while the majority indicated they did not see an ROI, the reasons for that response varied tremendously from one respondent to the next. In fact, no two respondents had the same reason. Some of the reasons listed included:
- Data issues with telematics devices
- Driver repercussions
- Too early to see sufficient data from pilot system
- Haven't calculated or deployed GPS
- High cost diminishes returns with length of use
- Immaterial fuel savings
- Limited number of telematics equipped vehicles
- Not a priority
- Short time having telematics installed
- ROI is not an appropriate calculation
- Reporting capabilities of the telematics vendor
- In the process of performing ROI analysis
The survey also asked about the biggest struggles fleet managers faced when implementing their telematics systems. The quality and complexity of the data were cited by 15 (36.6 percent) of the respondents respectively. Consistency of data was another big issue, with 17 or 41.5 percent citing that. The most important factor, which was cited by 20 or 48.8 percent, was underutilization of telematics/GPS. Other responses included relevance of data (14 or 34.2 percent), application of data (13 or 31.7 percent) and poor after-sale technical or system support (12 or 29.3 percent). A handful of the 41 responses indicated that they may have had unrealistic ROI projections when they implemented their systems originally.
In spite of these negative responses, only one out of the 41 fleet managers said they were "extremely unsatisfied" with their system. On a scale of 1 (extremely unsatisfied) to 5 (extremely satisfied), the majority indicated their satisfaction level fell at a 3 or a 4. So, while not all fleet managers are seeing a ROI, perhaps the goal is not a return on investment as much as better fuel efficiency or safety, as most managers are at least a little bit satisfied with their purchases.
So what does this mean for telematics manufacturers and the fleet managers that use the products they provide?
- First, fleet managers need to give the systems sufficient time before determining the ROI.
- Second, companies offering telematics systems need to ensure that their customers know how to use the data they receive.
- Finally, those shopping for telematics systems should take the time to find a program that offers intuitive data delivery and good technical and service support so they can maximize their use of the system.
A total of 63 fleet managers and directors took this survey.
This article is part 2 of our telematics survey report series. Read part 1 of our telematics survey results to learn more about the (mixed) uses, metrics, and ROI.
Read part 3 of our telematics survey report series - Disappointments for fleet management programs help guide future purchase decisions.