Telematics & GPS Cost of Ignoring
Simply stated, the cost of ignoring is money left on the table. Cost of ignoring (COI) can be thought of as the amount of lost savings that result when a company fails to undertake a strategic business investment that would otherwise improve operational efficiency. For fleet managers it can be thought of as the incremental operating costs resulting from the improper use of telematics or lack thereof.
ROI v. COI
COI has the same strategic goals as ROI, however there are a few fundamental differences as seen in the table below. The primary difference is that COI is focused on minimizing operating costs, whereas ROI is focused on maximizing incremental revenue.
Each fleet is unique, and therefore each fleet can have drastically different cost structures. In our research, we found that two variables specifically impacted a fleets operating costs: vehicle class and vehicle mileage.
Here is an example: A long-haul Heavy-Duty (HD) fleet will have a very different cost per mile (CPM) breakdown than a low-mileage Light-Duty (LD) fleet. In general, the HD fleet will likely have larger proportional fuel expenses per mile, but the fleet will have larger collision and claims CPM.
Savings opportunities available to a specific fleet will change based on the fleets operating characteristics. This can make the opportunities difficult to identify and quantify.
In the next series, we will discuss using our Fleet Savings Summary Report to quantify the ROI & COI.
View previous Return on Investment Series post here.
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