It’s a question that many fleet operators ask themselves when looking at the eye-watering start-up costs.
And in the current climate it can be particularly difficult to convince senior executives, of the need to invest.
The alternatives are increasingly outdated spreadsheets or using a contract hire company’s software, which ties the fleet into a solus deal that might not be the best option.
Pay-as-you-go (PAYG) software may be the solution to the funding dilemma.
CFC Solutions claims that Fleet Plus – its pay-as-you-go software package aimed at medium to large fleets – costs the equivalent of leasing up to two vehicles a month.
This cost includes adopting and installing the system and training staff.
Managing director Neville Briggs says: “We adopted PAYG so that customers could acquire a fleet software package without the upfront costs.
“Our estimate is that around half of all sales of major fleet software systems are now sold as PAYG.”
Briggs claims that on a month-by-month basis, the system is proving to be cost negative.
Jaama, another major player in the fleet software market, has offered pay-as-you-go software for the past five years and says that customers benefit from easier budgeting.
Andrew Leech, business manager of Mycompanyfleet, agrees: “We are a firm advocate of PAYG as this helps smooth out corporate cashflows, requires no initial up-front payment and, with regular monthly payments, helps budgeting.”
Leech says that even a firm running as few as 25 vehicles can make real cost savings.
“A fleet of 25 typically generates operating costs of around £500,000 per annum.
"Yet for an investment of £1 per month per car, it should be possible to generate cost savings of 5% – which adds up to a rather impressive £25,000.
“What company is going to say ‘no’ to savings of £25,000 a year on just 25 vehicles?”
Easy access to data
Reducing the admin burden and making data easily available are some of the main benefits of software.
Tyrone Lanaway, fleet manager at 115-vehicle fleet AK Worthington, spends much less time scouring spreadsheets for fleet data since introducing Jaama’s software system.
“The ability to quickly and easily produce management reports on any particular aspect of the fleet and compare data against key performance indicators has reduced administration time significantly,” he says.
“I estimate that I’m saving about eight hours a week in terms of fleet administration time while also delivering improved levels of reporting.”
Public services provider Amey has also turned to fleet software to make data management easier.
It previously operated two systems to manage 4,500 vehicles, 30,000 items of plant equipment and its network of workshops.
None of the software was web-enabled, which meant the systems were administratively complex and did not allow for multiple-user access across different sites.
Amey has now decided to switch to Jaama’s web-enabled system on a pay-as-you-go payment model which will integrate with its existing software.
Fleets will increasingly demand workflow management software, says Jaama, which will provide reports on drivers who are not meeting their policy (exception reporting).
Installing their own rules for each vehicle or driver-related issue will reduce operating costs without the fleet being overloaded with management data.
Managing fuel costs
Fuel is one of the biggest fleet costs – since the start of last year petrol has risen by 26p per litre and diesel by more than 16p per litre.
Software providers recommend issuing fuel cards and linking them to fleet software to reduce costs. CFC claims this will yield savings of 5-10%, while Jaama says its customers have reported fuel spend reductions of up to 8% after implementation.
Briggs, of CFC, says: “We see instances where poor drivers use 20% more fuel than their peers in identical cars over similar journeys.
"Fleet software gives you the ability to identify these drivers – or their vehicles if there is a technical fault – and take action.”
As well as comparing actual mpg against expected mpg, fleet software can help spot fuel fraud. Jaama’s system, for instance, imports data from CAP which highlights fuel tank capacity. Purchases of fuel quantities greater than tank capacity can be identified.
Fleet operators can also track when non-approved fuel, such as super unleaded, is bought.
There are environmental benefits from software which can result in reduced fuel consumption too.
Ashley Sowerby, managing director of Chevin Fleet Solutions, says: “Fleet management software gives fleet managers the reports needed to encourage drivers to switch off the engine when stationary, stick to the limit on motorways, regularly check tyre pressure and only have the air-con on when necessary, dramatically reducing fuel consumption and cutting carbon emissions fleet-wide.”
Fleet software can also be used to help fleet managers select the right mix of vehicles for their fleet.
For instance, Mycompanyfleet’s Fuel Optimiser solution identifies the most fuel-efficient cars and vans from all major motor manufacturers.
Duty of care
Fleet software can help fleet operators manage risk and meet their duty-of-care responsibilities, including monitoring grey fleet drivers and checking licences.
Jaama now offers fleets a fully-outsourced driver licence checking service, removing the administrative burden of collecting driver mandates.
Jason Francis, managing director of Jaama, says: “We will handle all matters around the drivers’ mandate, including issuing reminders to them, obtaining information from the DVLA, alerting fleet decision-makers to all licence issues that are uncovered and uploading the information into the customer’s Key2 Vehicle Management software.”
CFC’s Licence Link allows fleets to choose how often automatic checks are made with the DVLA database. For example, low-mileage drivers can have their licence checked annually while high-mileage employees can be checked more often.
Risk summary reports automatically group drivers into different levels of risk – for example, those with 1-3, 4-7, 8-12 and 12-plus points – and Licence Link can be set up so that those with more points are checked more often.
Fleet operators can also receive automatic alerts for issues such as photo-cards expiring.
Other reminders can be set up to manage grey fleet risk.
Chevin Fleet’s software send alerts regarding insurance, MoT and maintenance checks, which in turn can be sent to alert individual drivers on PDAs, laptops and mobile phones.
Mycompanyfleet’s Driver Self-Serve also reminds grey fleet drivers when their vehicle needs to be booked in for a service.
If drivers fail to update their details, they will be unsuccessful in their mileage expenses claim, which acts as a major incentive for them to keep records accurate and up-to-date.
They are also automatically flagged up in an exception report to their manager for further action to be taken.
Managing ageing vehicles
With many fleets extending car replacement cycles to four years, maintenance is now a bigger issue.
Briggs comments: “There has been a lot of interest in how to use our products to proactively manage maintenance. We have been helping fleets to develop strategies that minimise costs and ensure risk management compliance.
“For example, if there is a gearbox failure on a four-year-old car, what would the savings be from using an independent repairer rather than a franchised dealer? Is there likely to be a goodwill contribution from the manufacturer?
"Can we get the car back on the road in less than 48 hours, therefore minimising hire car costs?
"Do we have a process in place that proves the vehicle has been properly maintained from a duty-of-care point of view?
“These are questions that many fleets have not previously had to consider.”
Fleet software can also bring excessive repair bills to a fleet manager’s attention.
‘Unnecessary’ service maintenance and repair work can be prevented through fleet software as it highlights the date that repairs and parts replacement were last carried out by the dealer.
Conversely, e-commerce platforms, such as epyx’s 1linkService Network, can track where maintenance savings are being achieved and repeat them in future.
For example, the best value price can be stored on the system and automatically flagged up when an identical job arises in the future.
Some software, such as Chevin’s FleetWave, now includes benchmarking reports and tools, allowing like-for-like fleets to be compared anonymously.
This, like many other innovations available from fleet management software, can help fleets to stay competitive and develop future strategy.
Case study: Go Plant
Lee Brightmore is one financial controller who is convinced of the benefits of fleet software.
The company he works for, Go Plant, has a fleet of more than 2,000 vehicles, including 15 company cars and nine company LCVs.
The majority of the fleet is contract-hired to local authorities and Chevin’s FleetWave
software plays a key part in administration.
“Fleet software brings us better control,” Brightmore says. “We used to do everything manually on spreadsheets, which meant mistakes could creep in. Now our depots place orders through FleetWave and a customer invoice is automatically generated and we can match the invoice to the order.
“Previously, we might not have spotted errors such as undercharging.”
Brightmore believes software has saved “an awful lot” of time and likes having a complete history for all the vehicles.
He can monitor damage to vehicles and knows when services are due through FleetWave’s Service Planner.
But there is a downside.
“The system is almost too flexible. It’s bespoke to us, which is great, but that means it doesn’t show us the most efficient way of doing something.
"Our processes might not be the most efficient and if the system wasn’t bespoke we might do things differently.”
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