What is less shrewd is the complete absence of effective safeguards surrounding these arrangements in most cases. And, in many companies, the person who liaises with the outsourcer only looks after the relationship as a small part of their job.
Actually monitoring the performance of the outsourcer is rarely attempted in any meaningful way and, if it is, the criteria upon which the measurements are based are usually set by the supplier and always measured using their own data.
At cfc solutions, we have had a number of companies approach us to discuss this dilemma. They recognised the need to ensure that their outsourcer was performing well – but couldn’t see a way to monitor the arrangement without almost duplicating the outsource provider role.
As a software company with experience in supplying systems to both leasing companies and fleets, we recognised the intricacies of this problem, and brought a perspective to the issue that is probably unique. Our solution is called Fleet Police, because it is designed to police the outsourced arrangement, and it is forming the core of a new product drive into Southern Europe for our company, where outsourcing is especially favoured.
Fleet Police will help fleet managers ensure, for example, that agreed service level standards are being met, that expenditure is being properly controlled, and that the true costs of leasing and fleet management agreements are being identified. All of these should lead to direct cost savings.
However, monitoring an outsourced fleet is not just about expenditure. Across Europe, duty of care and risk management are becoming much more important issues, and Fleet Police allows companies to monitor audit trails to ensure that their duty of care requirements are being fulfilled.
In most cases, the outsourcer should provide all the data used within Fleet Police, but the software allows the information to be interrogated in new ways.
For example, few leasing companies produce a standard customer report showing the true cost of leasing a vehicle, including costs such as end of contract recharges. What the software allows companies to do is drill down into the data and calculate figures for themselves so they can see how much outsourcing is really costing them.
Of course, in many fleet scenarios, it is not just the outsourcer that needs policing. Many organisations find that a more relaxed attitude can be found in certain parts of their operations than others, and Fleet Police can also be used to monitor these. For example, one fleet with which we worked found a small car in Italy achieving 8mpg and a car in Poland getting through three sets of tyres and four batteries in 15,000km. Clearly, a little management attention was required here.
In the small number of companies where Fleet Police has so far been implemented, the results have been positive. Outsourcers and internal fleet users have generally welcomed its arrival because they recognise that a business relationship without checks and balances in place is one where suspicions can soon escalate.
On the whole, companies have found that their levels of control across their fleet are adequate, although almost all have found a few areas where attention is required and have made cost savings or improved their risk management control as a result.
However, at least one company found that in almost every key measure used, their outsourcer was failing. Are you sure that yours isn’t doing the same?