By Michele Cunningham, senior vice president, Element Fleet Management
Whether a company is moving physical inventory, moving service technicians to job sites or simply moving employees for daily work purposes, transportation is vital for business success.
Today, most companies still own or lease fleets for this purpose. But what if they didn’t?
The definition of “fleet” is rapidly changing. In fact, it is expanding. New modes of transportation are shaking up how people and products move, and how we define the very idea of a modern fleet.
Already, you might find a business delivering goods via a ridesharing service, or companies testing the delivery of inventory with autonomous vehicles. City-based sales reps are exchanging the company car for an Uber account or a vehicle-on-demand from Maven. Machine parts or healthcare product delivery via drone? It’s already happening in places like Rwanda where “sky ambulance” drones parachute lifesaving supplies down to remote hospitals.
And this isn’t just young upstarts aiming for a piece of the transportation pie. According to reports, GM has expanded its autonomous Chevy Bolt program as part of a future robotaxi service. Ford announced in late 2017 that the company was moving its autonomous team from Dearborn, Mich. to Detroit to do urban mobility testing. In fact, at CES 2018, nearly every car maker announced new mobility concepts around web-connected, increasingly autonomous, and sometimes shared vehicles.
From fleet to mobility as a strategic advantage
A mobility mindset allows an organization to put people before assets. It lets companies shift their focus (and potentially lots of operational expense) from managing vehicles to enabling mobility, and encompasses all relevant modes of transport – whether owned, leased long-term, rented by the hour, day or week, licensed, ridden, flown, autonomously driven or self-propelled.
This is vastly different than how we have historically thought about getting from A to B. And how effectively companies manage this transition to the mobility mindset can become a strategic business advantage.
Connectivity is the driver of efficiency
The key to mobility management is information – data points gathered from multiple systems and processes that are integrated together to create a bigger, broader view of a company’s complete mobility landscape. In-vehicle telematics are already widely used in today’s fleets to provide insight into vehicle health, driver performance, location and maintenance needs.
For a company using only its own vehicles – its own modes of transport – this works well by driving efficiencies and creating lower total cost of ownership for the fleet. But what happens when you add in modes of transport that you don’t own or lease? Without data, all those efficiencies go out the window, because you no longer have comprehensive insight into the mode of transport, its cost, performance, location, and more.
Luckily, these emerging modes of transport are data-rich. They’re inherently part of the Internet of Things landscape and were born as digital native businesses. There’s no need to convince them of the need for telematics or connectivity – they are already on board. And, due to the nature of apps and data-sharing, connecting to systems that deliver data from third-party sources, like weather or traffic, is commonplace. Mobility users or their partners are now tapping into comprehensive technology platforms that find meaning in the myriad data streams, transforming it into business insights and leading to ever-smarter decisions.
Mode gives way to productivity
When mobility managers start to shift their thinking, a few things happen. First, it allows companies to consider new ownership models and look across all potential modes of transport.
Today, about 10 percent of vehicles are considered traditional “fleet” vehicles. The other 90 percent of vehicles are personally owned. But as transportation ownership options open up, those numbers will start to shift. Just as millennials are opting for ridesharing and public transport over car ownership, businesses will follow suit. As this happens, more vehicles will become “fleet” vehicles – maintained and managed en masse by a few owners and many fractional users.
Second, the actual mode of transportation becomes less relevant. In an ideal world of mobility, the system – an AI-driven platform that correlates all key data – would help mobility managers, employees, drivers, supply chain partners and others define, in real time, which mode is most efficient based on the parameters of the job, the weather, the state of the vehicle and more.
When we take the focus off the mode, mobility managers can shift to managing productivity instead. By optimizing the system, feeding it information and analyzing performance data, mobility managers now elevate their role to one of business productivity manager. A role that improves operational performance, decreases waste and contributes to revenue generation and customer satisfaction in a completely new way.
Fleet manager roles are changing
With this role, also comes a change in mindset. Erin Gilchrist has been a fleet director for Safelite AutoGlass for more than a decade. While her core responsibilities have included the review, pilot and implementation of a telematics program at Safelite with Element Fleet, she also recognizes that fleet managers need to embrace the path toward mobility management.
Part of mobility management is understanding transport and how it can support the business, but it’s also helping employees understand how to exist in the changing mobility landscape. For many fleet managers, taking on a role that requires change management with human assets is completely new. But it will be a critical step.
For example, as part of a mobility strategy, an employee who had a dedicated vehicle in the past may receive a mobility budget instead. This flat-fee-based financial incentive can not only shift the line item of the expense, but can also incentivize employees to choose modes of transport that are more in line with their business need, are more sustainable, and can shift with the needs of the employee. While a mobility manager (or in some cases procurement, travel or other management role) still oversees the “fleet” options, a bigger part of their role may be empowering employees to navigate the processes and procedures.
From TCO to TCM
The transition to mobility management is happening as fleet, transport, travel and operational expense management continue to converge. Like most disruptive trends, mobility management will find its way and best practices will start to emerge. One of the most compelling components might just be a new business metric. Without “ownership” as part of the model, companies will look to define total cost of mobility (TCM) instead. Within TCM, companies will be able to better understand their mobility costs, but also their global mobility footprint, impact on employee satisfaction, impact of mobility strategies on business outcomes and more. Mobility management: it’s the new competitive advantage.
About the author
Michele Cunningham leads the product and marketing team for Element Fleet Management, driving growth and development of solutions for customers and employees. She is highly involved in expanding Element’s global value proposition, building on the Element-Arval alliance. Michele has more than 20 years of business-to-business marketing and strategic planning experience with Random House, AT&T Capital Corp. and Williams Scotsman.