Fleet News

Outsourcing – not always the easiest option

IF there is one word that sums up the past decade in the fleet industry, outsourcing must be it.

As companies in all sectors try to focus on their core business, so-called distractions that drain resources and finances are hived off to another supplier that specialises in each area.

For many fleet decision-makers, outsourcing has meant immense upheaval, as the role of fleet manager is passed to an outside company.

Often, the fleet management company is also the same business that is funding and providing the vehicles, as contract hire and leasing firms specialise in offering single-source solutions for all a fleet’s needs.

But although outsourcing can be seen as the easy option initially, it can be hazardous and create further problems if not handled properly.

Although a company may have attempted to remove responsibility for its fleet, it still needs an employee to manage the contract and watch costs and this is where the problems can start.

The employee is effectively a fleet manager, but without direct access to information. Problems can include lack of information and insufficient data to make informed decisions.

Research by Chevin Fleet Solutions has uncovered a series of common complaints following an outsourcing deal.

For example, someone is still required to monitor the outsourced company, so not all internal costs have been eliminated.

Furthermore, all fleet details may not be to hand and it can take a significant length of time to obtain them – there may even be a charge.

Information provided may not be in the format required and the data was hidden in several different reports.

A spokesman for Chevin said: ‘Chevin has learnt by experience how different types of organisations manage their fleets and what problems they encounter in doing so. One subject that consistently arises is the amount of trouble outsourcing creates. The issue is particularly important when considering the recent changes in legislation concerning duty of care requirements and corporate manslaughter, where understanding and having control of your fleet is vital.’

There is a lesson to be learned for fleets that believed they could wash their hands of responsibility by giving management of their fleet to an outside company. Out of sight should not mean out of mind.

... but sometimes it’s a job for the experts

DESPITE concerns, outsourcing as an option should not be ignored. In the right circumstances and with the right controls in place, a decision to outsource certain aspects of the fleet to an expert can prove invaluable.

Indeed, in areas such as duty of care, it can be used to support a company’s own efforts to create a safer fleets, rather than just get rid of an administrative burden.

While it is easy to deal with issues among employees such as creating a high-profile ban on mobile phone use while driving, creating more detailed health and safety strategies that meet Government demands for safer fleet management will be much more difficult, particularly for a small business with limited resources.

This is a key area where companies must consider the benefits of outsourcing, according to Jeremy Mills, operations director at DaimlerChrysler Services Fleet Management.

He said: ‘There is a new level of involvement from the Health and Safety Executive that works on the premise that the road, for someone driving for at-work reasons, is an extension of the workplace and subject to the Health and Safety at Work Act. There is a danger that safe driving begins to loom so large that it eclipses activities that are more directly connected with a company’s prosperity and the livelihoods of its employees.

‘The best course is to outsource the creation and implementation of its road safety policy to specialists. In fact, many companies that lease all or part of their vehicle fleets through fleet management companies already have experts in the management of risk working for them.’

It is a logical step, he argues, to progress from absorbing the risk on residual values to working in other risk management areas, particularly as firms including DCSFM are regularly dealing with safety issues through their accident management, maintenance and tyre management departments.

Mills added: ‘There is also a great deal that we can do in sourcing and recommending specialists to conduct fleet safety audits that will provide a proportionate response to the individual needs of the company concerned.

‘Fleet administrators should make use of all the expert support and advice they can get.’

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