Why do fleets need fleet software systems?

A leading fleet magazine recently asked us why fleet managers need fleet software systems to manage their fleets more effectively, rather than relying on manual systems and Excel spreadsheets.

Business executive Luke Hicks replied as follows:

“Fleet managers regularly ask the question ‘How can we justify the expenditure on a fleet management system to our directors?
“But our answer is invariably the same. The company fleet is usually the second largest cost a company faces after salaries and, while nobody suggests that payroll systems should be run manually, we often see companies without any automated ways of managing their fleet.

“Modern fleet management systems provide the end user with greater control over all aspects of fleet operation. For example, they can provide quotations and locate vehicles online through supplying dealerships or leasing companies, thus helping control the acquisition process. They also provide the means to thoroughly monitor all running costs including fuel, which represents a substantial proportion of total fleet costs.

“They can also manage duty of care responsibilities and provide a driver management system to identify those drivers most at risk. A typical system allows complete driver records to be kept and readily identifies those drivers requiring some form of intervention.

“The best systems provide management by exception reporting, flagging up those exceptions that require management action, thus helping avoid information overload. To help smooth out corporate cash flows, they typically require no initial up-front payment, just regular monthly payments which clearly help the budgeting process.

“Given the complexity of modern fleet management, the question isn’t really ‘how can we afford to have a fleet management system’, but rather ‘how can we afford not to?’

“There should be no such thing as a standard software approach nor an ideal fleet size for which fleet management software is relevant. Flexibility is the key. To give you an example in another area of a business, companies with a few as 10 employees definitely benefit from employing software to run their payroll and HR systems.

“The same principle certainly applies to a company running as few as 25 company vehicles, or even less, and there are some real cost saving advantages from employing fleet management software on a fleet even of that size.

“A fleet of 25 vehicles typically generates operating costs of around £500,000 per annum, but for an investment of as little as £25 per month, or £1 per month per car, it should be possible to generate cost savings of 5% – which, in this case, adds up to an impressive £25,000.

“And if you opt for payment terms on a pay-as-you-go basis, as you can with our own FleetAcumen software solution, there is no lump sum down-payment and no negative effect on your company’s cash flow – an important consideration in these troubled economic times.

“At the same time, you can alter your monthly payment depending on your fleet size, so that if it grows or contracts due to seasonal fluctuations, you pay according to your usage, not to a pre-agreed and rigid contract that may no longer be relevant.

“A modern fleet software system is an ideal way of reducing the internal administration of the fleet and cutting down on your workload. It should integrate fully and automatically with the systems your source partners and key internal departments are using – in this case, your leasing suppliers and your HR department which holds all your driver records.

“To prevent information overload, the ideal system, like our own FleetAcumen, provides alerts when you need to take action, such as a vehicle approaching its contracted total mileage or the limit for refurbishment charges from your supplier being exceeded.

“This removes the need for you to wade through a river of data before you find the event that you need to take action over, and helps cut down dramatically on time. By setting up the system to flag up any alerts first thing in the morning, you can identify problems as soon as they arise and tackle them in good time.

“The ideal software system should also help you source vehicles more cost effectively, and should allow you to compare quotations from different leasing companies side-by-side, using benchmarking of key areas to find which one is the most suitable for your needs. Used in this way, the system will reduce the fleet administrative burden involved dramatically and help you do your job far more effectively.”

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