Put simply, fleet management software is a broad term for a centralized set of tools that help businesses track and manage a mobile workforce. Fleet management software is used by a wide range of industries to automate operations, reduce costs, improve performance, and comply with government regulations.
In this article, we’ll explain the ins and outs of fleet management software, including:
How does fleet management software work?
Fleet management software uses a small telematics device that connects to a vehicle’s on-board diagnostics port. While installation methods differ, many solutions are “plug-and-play” and do not require a mechanic. The telematics device collects vehicle data such as GPS location, distance traveled, speed, fault codes, fuel usage, idling, harsh braking, and bearing.
This data is then typically sent to an online dashboard via a cellular connection—where it is organized into a set of tools and reports used to track and manage your business.
Additionally, leading solutions have a mobile application to facilitate driver productivity and efficiency tools. The telematics device sends data to the mobile device via Bluetooth, USB, or a cellular connection.
Who uses fleet management software?
Fleet management software is used in a wide range of industries such as trucking, field services, utilities, construction, oil and gas, mining, local delivery, governments, passenger transit, among many others. In short: any industry that uses vehicles as part of a mobile workforce can benefit from fleet management software.
Additionally, businesses of all sizes use fleet management software, from small family-owned operations to large global enterprises.
Within these businesses, fleet management software is used by a wide range of job functions including business owners, fleet managers, dispatchers, mechanics, safety and compliance personnel, and drivers/mobile workers.
Why should my business adopt fleet management software?
There are many proven benefits to fleet management technology, including:
Improved customer service
The customer is king. According to Bain & Company, a 5 percent increase in customer retention produces a 25 percent increase in profits. Additionally, 86-95 percent of consumers read online reviews for local businesses before purchasing.
Fleet management software is increasingly being used to improve the customer experience. Here are a few ways it can help:
- Automated driver ETA notifications for customers
- Faster response times by being able to easily locate the closest driver
- Planning efficient driver days and routes to increase on-time percentages
Automating manual tasks
In business, time is money. Fleet management software can automate many manual, repetitive tasks, freeing you to focus on profits and growth. Here are a few examples:
- The need to call drivers for ETA/status updates and job/load instructions
- Searching the yard or job sites for specific trucks, trailers, or equipment
- Collecting and centralizing paperwork such as proof of delivery, forms, and fuel receipts
- Vehicle inspection reports, IFTA trip sheets and filings, and hours of service
Many businesses with mobile workforces require high capital expenditures that can quickly spiral out of control if not managed closely. Fleet management software helps businesses reduce costs and increase profit margins by:
- Reducing fuel usage
- Preventing vehicle breakdowns
- Avoiding vehicle misuse and moonlighting/side jobs
- Increasing asset utilization to do more jobs with fewer vehicles and employees
For vehicle-dependent businesses, accidents are always a risk. Beyond the duty to keep our roads safe, the financial implications are significant. In fact, the average accident costs $91,000, and that number rises to $200,000 if there’s an injury.
Additionally, drivers are a moving billboard for your business. Dangerous driving behavior impacts your brand even when no accident occurs. Fleet management software can help you:
- Identify your most dangerous drivers
- Simplify the process of coaching to immediately correct dangerous driving
- Document past driving history to view trends and if needed, terminate the employee
- Protect your business from litigation if an accident occurs where you aren’t at fault
Key features of fleet management software
GPS tracking is the central piece of a fleet management system. It allows a fleet manager to view the location of any vehicle, driver, trailer, or other assets in real-time:
Use cases for real-time GPS tracking:
Eliminate phone calls. With real-time GPS tracking, you can view driver ETAs and send them to customers with ease. No phone calls necessary.
Faster response times. When an urgent customer need arises, you can easily find and assign the nearest available driver.
In addition to real-time GPS tracking, fleet management software can show you where drivers were at any point in the past with historical GPS tracking:
Use cases for historical GPS tracking:
Identify vehicle misuse. Are your vehicles being driven after hours for personal use or side jobs? See exactly where your vehicles were and when to find out.
Get the truth in customer disputes. Ever have an angry customer who claims your driver was late and a driver who claims she wasn’t? With historical GPS tracking, you can see the precise time your vehicle arrived and address the situation accordingly. With some systems, you can even request video from an integrated dashcam.
Vehicle breakdowns are not only expensive but disrupt operations and upset customers. Leading fleet management solutions offer vehicle diagnostic functionality that continuously monitors your vehicles for fault codes and displays them in actionable reports:
Use cases for vehicle diagnostics:
Proactively plan maintenance. When vehicles are taken into the shop, you can provide mechanics with historical fault code reports for the vehicle. This allows them to identify and fix every issue in a single appointment and avoid future breakdowns or downtime.
Identify critical issues in real-time. You can choose to receive real-time alerts for critical vehicle issues and ensure the vehicle is taken off the road before it causes an expensive breakdown or worse, an accident.
Vehicle & Asset Utilization
Fuel and vehicle/assets are likely two of your biggest expenses. Fleet management software can help you run a more cost-efficient business by making it easy to identify fuel waste and underutilized assets.
Use cases for vehicle and asset utilization:
Save fuel. A vehicle burns nearly one gallon of fuel for every hour spent idling. Additionally, idling one hour per day for a year is the equivalent of 64,000 miles of engine wear. You can use the idling data to identify the drivers idling excessively and intervene. Pro tip – create an incentive program to reward drivers with a bonus for low idling rates. It’s a financial win-win.
Right-size your fleet. Run a report of vehicle drive time data for each month. If some vehicles show low usage trends, there may be an opportunity to sell them and lease/rent for additional capacity during peak seasons. Similarly, you can use this data to identify assets that have the ability to generate additional revenue.
Driver Scorecards and Dashcams
Safety tools are a critical part of fleet management software. Driver Scorecards assign a customizable “Safety Score” to each driver to make it easy to identify your most dangerous drivers.
Advanced solutions will automatically categorize dangerous driving behavior such as tailgating or lane cutoffs for fast analysis. Once the issue has been reviewed, you can track whether your driver was at fault. Then, you can address the issue via coaching:
Even more importantly, leading fleet management solutions allow you to witness the critical event for yourself with HD video footage.
Proactively prevent accidents. As a manager, you often won’t be aware of dangerous driving until after an accident occurs. With scorecard data and dashcam footage, you can correct dangerous driving behavior immediately. If the behavior persists, you can let the driver go before they cause lasting harm to your business.
Protect yourself from liability. Unfortunately, accidents happen. And sometimes, it won’t be your driver’s fault (with commercial trucks, studies show the passenger vehicle is at fault 84 percent of the time). But, can you prove it? With video evidence, you can. This can save hundreds of thousands in legal fees.
Communication can be quite a headache for managers running a mobile business. Often, key information is passed back and forth through a combination of texts, emails, and calls. Not only is this confusing, but referencing communications at a later date can be challenging, if not impossible.
Fleet management software can simplify and create a centralized record of company communications with instant messaging:
Use cases for driver communication:
Company announcements. Do you have a company announcement or urgent update to share with your drivers? Send a broadcast message to all drivers or any group of drivers and then confirm they’ve viewed the message with read receipts.
Simplified dispatch. When you locate the best driver for a job/load on the fleet GPS tracking dashboard, message detailed instructions to the driver in just a few clicks. No phone calls necessary. The driver can even respond with proof of delivery documents.
Other key features
GPS tracking, vehicle diagnostics, utilization, safety tools, and driver communication are features you’ll find valuable—but leading fleet management solutions offer much more, including:
- Receive email alerts for dangerous driving, driver arrival/departures, compliance violations, vehicle fault codes, and more
- Hours of Service/ELD compliance
- Automatic IFTA mileage by jurisdiction and fuel receipt tracking
- Customizable vehicle inspection reports (DVIR) by vehicle type
- Create a geofence around any location to get alerts when vehicles arrive and leave
- View detailed reports to see exactly how much time an asset spent at a geofenced location. This is especially useful for job site invoicing and detention time billing.
- Schedule your arrival windows to reduce detention time at shipper and receiver facilities
- Know exactly what to expect before accepting a load and plan accordingly
Tips to choose the right fleet management solution
There are many fleet management software options on the market. Here are five things to consider before choosing a solution:
- Reviews: There are many review sites that share the experience of current users. Some of the leading ones for fleet management are Capterra, G2Crowd, GetApp, and the Google Play Store.
- Excellent support: You don’t need a product—you need a partner. Find a fleet management software provider with 24/7/365 support.
- Value beyond GPS tracking: Many providers simply track vehicles and do little else. While GPS tracking is important, the real business value comes from complementary features such as dashcams, vehicle diagnostics, and driver communication.
- Contracts: Beware of getting locked into contracts longer than 1-2 years.
- Integrations: A fleet management solution should be a bridge—not an island. Find a solution that allows you to integrate with other technologies.
Frequently Asked Fleet Management Software Questions
Are the benefits proven?
Yes. For example, according to Frost & Sullivan, fleets using telematics devices can expect a 25 percent decrease in fuel costs and a 30 percent reduction in idle time.
What does the setup and installation look like?
While methods will vary, for leading solutions, the hardware (telematics device) plugs into the vehicle’s diagnostic port and will not require a mechanic. The software will be hosted in the cloud, meaning there’s no software installation or IT help required.
Will using fleet management software take a lot of time?
No. Fleet management software automates and streamlines many manual tasks and most managers find they have more time to focus on growing the business after adopting a solution.
Will my drivers push back against fleet management software?
Not if you explain it in a way that focuses on the benefits to them. Drivers will benefit from reduced ETA phone calls and paperwork.
Also, many businesses use the data to create new incentive programs for safe driving, fuel efficiency, and other performance metrics—making fleet management software a financial win for them as well.
Is fleet management software right for you?
If you manage a mobile workforce, the answer is probably yes. Fleet management software is proven to help businesses of all sizes in a wide array of industries improve customer service, streamline operations, increase profits, and help provide protection in the event of a collision.
Ready to take a closer look at how a fleet management solution can work for your business? We’re happy to help.
Learn more about fleet management software with our free guide to help you modernize your fleet.