The Business Scenario a nutshell
- Year after year, small to medium enterprises spend thousands to prevent vehicular risks and on maintenance. For at least a week on an annual basis, vehicles for official use are non operational
- In a bid to cut back on expenditure, many midsized companies have started adopting fleet risk management strategies
- New technologies are being introduced in the market that can be employed to curb vehicular risks, damage and threats to safety
The use of vehicular transport for official purposes accounts for more than twenty five percent of road accidents. The threat to life and safety aside, the business impact of such incidents can seriously dent an organization’s brand and reputation. The expense on motor maintenance and restoration usually ranges in thousands for small to midsized commercial establishments, but the costs can climb steeply in the case of larger enterprises.
The need to manage vehicular risks in the line of work has given rise to a number of fleet management applications and technologies.
Technological Landscape
Rapid advancements and reduction in costs have made enterprises more interested in commercially feasible technological solutions and telematics. A number of application based strategies that can adequately mitigate vehicular risk factors have been introduced in the market.
Telematics systems are available today that can collect data on essential parameters that would suggest rash driving, including:
- Braking patterns
- Use of clutch
- Use of indicators while switching lanes
- Driving within the speed limit
- Tiredness
- Jumping Signals
- Sudden bursts of acceleration
Present day telematics systems and applications are being designed to closely monitor these and many other factors that could lead to vehicular risks that compromise safety.
Emergency teams must have a plan that can be readily deployed the moment a disaster occurs. Notwithstanding the practical considerations while executing a crisis response, outlining a recovery strategy after a disruption erupts is not highly recommended, given the high levels of tension and panic that unfold during such events.
Even low end products in the market come with specialized features such as monitoring a driver’s cell phone usage while on the road, be it a phone call, a specific application or a text message. Preventive measures in these applications include identifying symptoms of tiredness in drivers that instantly notify supervisors through warning alerts who can immediately take the appropriate action.
Many of these functionalities are being standardized across the automobile industry and come as inbuilt features in modern day cars. Vehicles are also granted credentials after their safety parameters are scrutinized through rigorous assessments. While initially introduced to specifically address safety concerns, over the years, these ratings have turned into a determining factor that impacts other aspects of business such as sales, brand perception and so on. The European New Car Assessment Programme (NCAP) is the officiating body that presides over this activity. The agency can be thought of as the European equivalent of the National Highway Traffic Safety Administration (NHTSA) in the USA.
Industry experts strongly recommend that companies check the Euro NCAP rating before deciding to buy a particular vehicle. The Euro NCAP online page also provides relevant information such as industry standard systems, safety measures based on type of occupant, road, purpose of use and more. Companies today looking to implement a software based vehicular safety specific strategy have a variety of options to choose from, many of which come at a reasonable price.
While vehicular risk mitigation can be ensured through inbuilt systems, many products come as online solutions that can additionally interpret the collected data through predictive analytics, visualization techniques and other tools to provide a comprehensive assessment of driving patterns.
Despite lowering costs and a wide range of benefits, not all small to midsized companies have adopted a software based solution that addresses vehicular risk management. Industry recommendations suggest that vehicular risk management should be operate in silos, but rather be integrated into the organization’s risk management strategy. Experts warn against quick returns on investment as most companies feel disheartened when they don’t see immediate results. Besides, vehicular risk management is still a relatively recent topic within the ambit of risk management and a lot still needs to be done towards raising awareness amongst the business community.
Monetary Considerations
Research shows that a vehicular risk management system drastically reduces the incidence of rash driving which in turn means that companies would incur lower costs related to damage, premiums and maintenance. Additionally, improvements in driving practices increase the useful life of vehicles along with their probability of giving better mileage which in turn implies a reduction in company expenditure on fuel.
Accidents are expensive and time consuming incidents that involve insurance premiums, paperwork and more. Injured employees have to be hospitalized or provided medical assistance. These personnel might not be able to resume their duties for weeks, sometimes even months and alternate staffing arrangements would have to be made. This too implies additional expenditure for the company.
The Road to Implementation
Although essential for safety and operational efficiency, it is highly recommended that companies don’t introduce vehicular risk management as standalone entities but rather seamlessly integrate the solution into the organization’s business continuity and disaster recovery plan. Mitigating vehicular risk entails a lot more than merely implementing telematics based systems or applications and expecting the quality of driving to improve. Operational factors directly linked to vehicular risks must be taken into consideration.
- Do the nature, scale and complexity of processes, workflows, activities and tasks promote risky, accident prone driving?
- Are drivers under excessive pressure to complete their tasks due to extremely narrow timeframe margins?
- Have the management and leadership teams identified all the factors that influence driving habits?
The data generated from vehicular risk management systems and applications must be exploited to improve upon current fleet management techniques. Driving habits must also be rectified through training exercises, drills and knowledge transfer sessions. Management and leadership teams keen on introducing a vehicular risk management policy must not be anxious to see a quick return on investment. The benefits of an optimized fleet management module depend on other aspects of the company’s business continuity and disaster recovery plan that are beyond the scope of vehicular risk mitigation measures. A positive impact on business operations should be a long term objective.
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