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ROI Delivery Checklist for Fleet Management

By Verizon Connect March 7, 2022

Inflation, supply chain constraints, fuel price fluctuations and an ongoing labor shortage have created an environment where organizations must make every penny count. Fleet managers are facing more pressure than ever to make sure every investment promotes operational improvements and adding to the overall bottom line.

 From helping to improve customer service, to increasing driver productivity and enabling better routing, fleet management software can play an integral role in streamlining operations. It can also significantly contribute to measurable return on investment (ROI), both in terms of the technology investment itself and cost savings that can be achieved across several critical business areas.

 To determine true ROI, however, you must first define it within a fleet management system. Next, identify the key areas to measure.

 What is ROI?  

ROI is a ratio between net profit and the cost of an investment. A high ROI means the benefits of a solution compare well to its cost. In fleet management, this is usually a calculation of the savings that a fleet tracking solution can help an organization realize, divided by the cost of implementing the solution.

 How does a fleet management solution deliver ROI? 

Our 2022 Fleet Technology Trends Report revealed that 90% of organizations using a fleet management solution found it beneficial.

 Also impressive, many organizations who had implemented the technology achieved a return on investment (ROI) in less than one year. This holds true for organizations across multiple industries:

  • Transportation: 52%
  • Services: 31%
  • Construction: 51%
  • Government: 32%

 While these figures underscore the value of investing in fleet management technology, there’s more to the telematics-driven ROI story. This year, organizations were forced to grapple with unprecedented challenges. Survey respondents clearly indicated that GPS tracking can have a positive impact on business operations and cost centers.

 The data showed that most survey respondents saw increased improvement in critical areas such as customer service (48%), productivity (46%) and routing (42%). Respondents also reported decreases in fuel, accident and labor costs.

Fuel management

By using a fleet tracking system, companies saw a 10% average decrease in fuel costs. This was higher or lower when broken out by industry: 

  • Transportation: 12%
  • Government: 6%
  • Construction: 19%
  • Services: 6%

Accidents

With telematics, organizations reported an 14% average decrease in accident costs. By industry, the decreases achieved were as follows: 

  • Transportation: 17%
  • Government: 7%
  • Construction: 15%
  • Services: 18%

 Labor

Post-GPS technology implementation, organizations reported a 10% average decrease in labor costs. Here are those decreases by specific industry: 

  • Transportation: 13%
  • Government: 5%
  • Construction: 16%
  • Services: 5%

 Assembling a fleet management ROI checklist

Your organization can realize many of the same benefits, simply by adopting, or upgrading to, the right GPS tracking technology. While determining the ROI of a new fleet management software purchase can involve many factors, one formula you can use for calculating ROI in general is: 

 ROI = (Gain of Investment) – (Cost of Investment) / (Cost of Investment).

 The key is recognizing what factors apply to your company for both gains of investment and cost of investment. Here’s a checklist we’ve created to help you determine what to consider in your ROI calculation.

 ROI checklist

 Potential gains of investment

While the sum of the potential gains from a fleet management solution investment can be hard to determine, concrete metrics like average mpg and increased billable hours can be used to calculate total annual savings per fleet vehicle. 

 These are some of the potential gains you could see from a fleet management solution:

  • Improvements to customer service
  • Better fleet productivity 
  • Greater ELD compliance and a reduction in fines
  • Improved fleet vehicle maintenance

 Cost of investment

These are the expenses you can expect to incur from a fleet management technology implementation:

  • Cost of the fleet management system itself
  • Technology installation, maintenance and support
  • Downtime resulting from staff education and training

 Make this year all about your fleet

Rising customer expectations, increased technical complexity and a competitive landscape can put stress on any organization. GPS fleet tracking can help you more successfully navigate these challenges and improve operational factors that affect ROI.

 Request a demo at your convenience to learn more about how telematics can impact costs and efficiencies for your organization.


Verizon Connect

Verizon Connect Staff represents a team of professionals passionate about everything telematics. Get to hear about the latest trends, product features and industry best practices from the desk of Verizon Connect Staff.


Tags: Cost control, Data & Analytics, Fuel cost management, Safety, Team Management

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