Fleet Management Systems in 2024: Insights, Needs and Challenges

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Pages Public Figure FLEET SOFTWARE IN 2024: BUYER INSIGHTS, NEEDS, AND PAIN POINTS (Analyst: Ryan Wiggin, Content Manager: Adhish Luitel)

Efficient fleet management is at the heart of a company’s logistics, but it’s an area fraught with complexities and challenges. Every day, logisticians and dispatchers must consider a variety of factors when planning optimal routes and operations, while also grappling with larger issues such as driver shortages, rising fuel prices, delivery delays, and regulatory pressures.

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To address these challenges, companies are increasingly digitizing their operations and continue to invest heavily in solutions for vehicle control and management. These solutions are the foundation for creating optimal business processes, providing centralized data processing, which allows for faster decision-making and fleet efficiency analysis.

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Investments in fleet management solutions continue to grow in both scope and functionality. In a recent survey of over 300 software decision makers conducted by ABI Research, HERE Technologies and Amazon Web Services (AWS), 82.4% of respondents in North America, Europe, the Middle East and Africa, and Asia Pacific reported that less than 50% of vehicles and shipments are tracked manually (paper logs, spreadsheets, etc.), with 54.7% of respondents currently performing less than 30% of their operations manually. Nearly three-quarters of respondents have a digital transformation strategy in place, with 18.3% already digitizing the majority of their fleet operations.

While fleet monitoring and management systems are becoming ubiquitous, not all are created equal. Many users still lack the necessary features to effectively solve their fleet management problems and require solutions that can not only track vehicles, but also optimize routes, improve efficiency, maximize fleet utilization, and ensure safe driving.

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This article contains:

• Key findings from an ABI Research study commissioned by HERE Technologies and AWS, based on a global survey of fleet managers.
• An overview of the most pressing issues faced by logisticians and fleet managers.
• Key performance indicators (KPIs) of vehicle fleets that are most important for companies.
• Transport management solutions that can maximise fleet capabilities.
• GIS technologies and data collection solutions that help companies overcome vehicle ownership challenges.
• Key points for the most effective implementation of fleet management solutions.

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Challenges facing fleet managers today

Maximizing the use of vehicles and available resources

While the number of truck drivers has declined, the demand for freight transportation has only continued to grow. These two opposing forces have widened the gap between the optimal level of transport supply and the demand for freight transportation, which in turn has created a greater need to maximize available labor and logistics efficiency.

When a truck is stuck in traffic, delayed at a port or warehouse, down due to a driver shortage, or out of service and in need of maintenance, the impact on service quality and other factors can be significant.

In the survey, respondents reported that KPIs related to vehicle usage were not being met properly or at all relative to the rest of the company’s operations, as shown in Figure 1. This is a worrying finding given that vehicle downtime can have negative consequences and impacts on other KPIs.

Question: What fleet management KPIs do you track and measure how well you are achieving those KPIs? (Source: ABI Research)

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Making the most of your data

With the continued growth of vehicle tracking technologies, companies have a significant amount of data at their disposal. The introduction of navigation equipment, proprietary telematics solutions, Internet of Things (IoT) devices, transportation management systems (TMS) and other technologies has resulted in a set of point solutions that rarely work together or are integrated into a single platform. Data availability is no longer an issue, but the ability to use that data and realize its potential is a challenge that many organizations face.

As shown in Figure 2, when assessing the main barriers to transparency for companies, “better data capabilities” and “getting reliable information from navigation equipment” were ranked by respondents as the top two barriers to fleet management transparency. Metrics can provide operational transparency, but to achieve this, the entire data set must be processed, structured, and visualized using specialized software solutions.

Question: Which of the following issues (in order of priority) do you think your organization needs to address to achieve fleet management transparency? (Source: ABI Research)

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Increase revenue and operational efficiency

While the goal is relatively clear, increasing revenue and improving operational efficiency remain top priorities for all fleet managers. When asked to rank the top drivers for fleet technology investments, 55% of respondents cited “increasing revenue,” while 52.1% cited “improving operational efficiency” as one of the top two drivers.

An inflationary environment further exacerbates this problem. Geopolitical events and macroeconomic pressures cause the underlying cost of production to increase, forcing logistics operations to reduce their share of overall costs in order to maintain the final price for consumers, as shown in Figure 1.

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Given that companies have virtually no control over the cost of goods, logistics operations need to be optimized and ways to improve efficiency found to ensure that profits are maintained or even increased.

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Achieving internal sustainability goals and regulatory requirements

Sustainability is now becoming a driving force in operational decision making. Whether on a company-wide scale or for a fleet as a business unit, companies rely heavily on it to meet their sustainability goals and comply with increasing government regulations.

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The obvious step is to electrify fleets, but given current infrastructure and cost issues, this has not yet been realized. When asked about the timing of the introduction of electric vehicles (EVs) into fleets, 34.3% of respondents plan to introduce EVs in 3-4 years, while 42.4% of respondents do not plan to introduce them for another 5-6 years, as shown in the chart. 3.

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Q: If you plan to integrate electric vehicles (EVs) into your fleet, what is your timeline for doing so? (Source: ABI Research)

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Electric vehicles are not a viable option in the short term, so fleet managers must focus on improving efficiency with the vehicles they have. Shorter trips, less downtime, timely maintenance, smart vehicle allocation, and route planning are all ways to achieve sustainability goals, but they all require fleet management solutions that provide advanced analytics and actionable information to find and implement new routes and better allocate resources.

Fleet Management Software and the Role of Geographic Information Systems (GIS)

The most important components of a fleet management solution were identified during the survey, when respondents were asked to rate which of them they would implement first. As shown in Figure 4, real-time vehicle tracking and route planning were in the top three with 72.5% and 64.8% of respondents, respectively.

This further reinforces the fact that fleet tracking and automated route planning are considered the two main uses of GIS. Monitoring and planning are the two fundamental pillars of fleet management, and while many solutions offer these features, the quality can vary greatly from system to system.

Question: If you were to implement components of a fleet management solution to see how well they work with your system, rather than the full end-to-end solution, which of the following components would you implement? (Source: ABI Research)

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Question: In which of the following ways does your organization use GIS? (Source: ABI Research)

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Key points

Developing and implementing solutions requires “debriefing” from both the end-user and the implementer perspectives. Every business is completely unique in both its operations and processes, as well as its level of digital and information technology maturity. As a result, software developers continue to struggle to offer a universal or personalized solution, clearly understanding the pain points of the industry, in order to properly position, implement and update their fleet management solutions.

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Barriers to implementation

Question: What are the main barriers to your organization implementing a fleet management solution? (Source: ABI Research)

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Question: Which contract structure do you prefer for your solution? (Source: ABI Research)

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When respondents were asked to rate their top barriers to implementing new fleet management solutions, key themes emerged that vendors need to consider:

1) Cost remains the most important criterion when implementing new solutions: more than 40% of respondents consider it the main factor. For many, this is not surprising, but for software developers, it remains a key point when considering pricing models and ROI guarantees.

As shown in Figure 7, 79% of respondents in the survey said they prefer short-term or pay-as-you-go contracts. This is somewhat at odds with the idea that cost is the main barrier to adoption, given that long-term relationships often come with discounts. The most attractive pricing models are not necessarily the cheapest or the most flexible, but those that strike a healthy balance between price and flexibility.

2) When counting the number of respondents who rated various metrics as “rank 1” or “rank 2,” lack of internal expertise and resources came out on top, which resonates with the larger digital divide in the market today. Implementation success is one part of this problem, but lack of expertise can also hinder the ability to benefit from a deployed solution, so it’s critical that solutions are intuitive and user-friendly, with ongoing technical support from the vendor.

3) Difficulty finding the right vendors ranked third overall, but was the second-largest “Tier 1” barrier. In today’s competitive vehicle telematics market, the focus is on reducing the time it takes to develop new capabilities and ensuring a smooth launch of new services and solutions. However, the survey results show that perhaps the biggest barrier to achieving this is that companies have difficulty finding the right vendors with the specialized expertise needed to both understand their industry and build solutions that meet their needs. The shift toward developing a comprehensive ecosystem of partners and vendors that can complement a company’s internal capabilities is becoming a critical source of competitive advantage.

Partners not only help speed up the ROI of the chosen IT solution, but also help reduce the risks of inefficient use, as well as reduce the burden associated with attracting qualified specialists, which allows companies to maintain other internal activities at the same level. Effective use of the partner ecosystem also simplifies the management of system updates and eliminates the need to endlessly allocate resources for improvements and possible errors in the future. The result is more effective management of the total cost of ownership of the solution and improved customer service as new capabilities are introduced to meet customer needs.

Data integration, visualization customization and reliable information

Organizations no longer want to adopt point solutions that operate in silos, but rather implement capabilities that can integrate with existing systems and consolidate disparate data sources to provide trusted insights. As previously stated, there is more than enough data out there, but many organizations feel they still lack the expertise to customize their own data processing and visualization solutions. The survey found that 73.7% of respondents found the ability to integrate their own data into a fleet management solution  valuable  or  extremely valuable , while “integration with existing systems” was cited by the majority of respondents as the number one reason for considering a new fleet management system vendor.

Comprehensive data integration is the foundation, but solution vendors must also think about how they provide organizations with software that can collect data and turn it into actionable information. The growing desire for systems to perform deeper analysis and offer greater support to decision makers through insights is driving increased investment in data analytics to ensure greater accuracy of those decisions. Among survey respondents, 75.9% plan to increase their spending on data analytics capabilities, with 44.1% increasing their spending over the next 18 months. The upcoming development of AI-enabled capabilities will only amplify this need, increasing the demands on fleet management solution providers.

Constant technical support and quality of service

The study found that ongoing technical support is the most important service when it comes to fleet management solutions. Among respondents, 44.1% rated “user technical support” as  extremely important , 33.1% rated “technical support portal” as  extremely important , and another 34.7% and 41.8% rated them as  very important . Most respondents rated them more important than other services such as demonstrations, product training, service alerts, and monthly reports.

While most services were rated as  somewhat important , 24/7 live technical support was a clear standout. This appeals to industry professionals who want more than just one-time training, but are looking for ongoing help from experts on solutions that are available to each individual user.

Conclusion

Although most survey respondents have moved away from manual documents, digitalization is a never-ending process, and it is especially important as digital technologies provide more advanced functionality. Software developers and solution vendors must develop a clear roadmap with end users and support the implementation of new features that will allow companies to stay abreast of evolving technologies and changing customer expectations.

Creating a system architecture that allows for the addition of new modules is important to support scalability, but vendors must complement this with data integration and features to improve the efficiency of implementation. To do this, software developers and vendors should try to create a single source of truth, such as a single vehicle telematics database, and then create roadmaps of the necessary features to expand capabilities. Using a single source of truth allows for more complex solutions that can automate workflows and balance multiple metrics.

Providing customization of solutions along with direct user training and support as mentioned above will allow fleet managers and end users to maximize the benefits they can get from the fleet management software and ensure that the solution continues to deliver value after implementation.

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