Fleet News

Guest opinion: Link fleet performance to business success

Too many companies see the fleet as a cost centre, or burden.

Treated as an asset and effectively managing the many benefits it provides offers big rewards, says FMG Support’s Stefan Rogers

As the government is on inflation alert and the credit crunch takes hold, “recession-proofing” is the phrase on the lips of chief executives across the country.

The unpredictable nature of the current economic climate is taking its toll on many businesses and in an effort to remain buoyant, organisations in every market are looking to streamline their operations and cut costs.

In today’s boardrooms, now more than ever, business performance improvement (BPI) features top of the agenda.

However, research suggests that many organisations, when scrutinising their cost centres, are ignoring a major cost centre area that can impact BPI – fleet.

The figures reveal that more than 90% of senior decision-makers are ignoring the positive impact that effective fleet management can have on BPI when scrutinising their own cost centres.*

Fleet is the second biggest cost to all businesses after payroll, yet the role of the fleet manager still needs further recognition.

The funding of fleets has traditionally been a decision taken by the financial director.

While in practice this is understandable, fleet – by its very nature in facilitating the transfer of an organisation’s people, services and products – touches many other areas of a business.

By developing fleet performance improvement (FPI) initiatives that deliver the objectives of BPI across the entire organisation, businesses can realise significant cost savings.

Programmes to achieve FPI can easily be incorporated into the overarching organisational BPI strategy.

Using intelligent reporting technology provided by fleet management organisations, solutions including introducing electronic fuel purchasing cards and analysing your fleet’s rental profile could make a real difference to the bottom line.

By identifying patterns such as persistent short-term rental usage, we can highlight more efficient initiatives such as switching to longer-term vehicle provision, that can make for significant cost-savings.

The success of FPI depends on those responsible for managing fleet to prove to decision-makers the true cost of fleet, changing the mindset that sees it as a cost of conducting business to a strategic capability.

But fleet managers must also take some responsibility for communicating upwards and ensuring that all assets relating to fleet are delivering against business objectives.

As with any initiative, measurement is the lynchpin to delivering clear results, and will be the ammunition that fleet managers need to prove the direct correlation between fleet and business performance improvement.

* Results based on interviews with major leasing and insurance companies, and organisations with 500-plus vehicle fleets.

  • Stefan Rogers is FMG Support’s director of marketing

 

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