A recent study, Service on the Move: Driving Profitability via Fleet Management, by the AberdeenGroup, found that organizations that have successfully implemented fleet management solutions have realized a 28% improvement in operator compliance, 11% reduction in maintenance costs and a 13% improvement in vehicle utilization. As a result, they reported a 12% increase in overall service profitability.

For example, imagine the vehicles that you purchase and maintain are being used for profit by one of your employees. Then imagine said employee is driving your vehicle several hundred miles into another state to moonlight – all on your dime.

Sound like a story that couldn’t happen to you? Think again.

According to Richard Burke, owner of Perfect Plumbing and Heating Inc., located in Lyman, Maine, “We caught one employee adding an additional 260 miles one weekend for personal use and was two states over, of course with no permission.”

Burke’s company now uses Shadow Tracker by Houston-based Advanced Tracking Technologies Inc., a manufacturer of GPS vehicle tracking systems.

“Our employees are more conscious of what they are doing and really understand the importance of their help in keeping our overhead to a minimum,” says Burke. “With today’s gas prices, trying to be competitive in the market is tough enough.”

Indeed, fleet management is a good way to help contractors keep costs down. In many instances, the cost of a fleet management solution is recovered almost immediately.

“Annual savings from operating costs alone of $1,100 per vehicle justify adoption of fleet management solutions,” says Amit Jain, research director at the AberdeenGroup and author of the report. “Financial impact from reduction in insurance costs, accident costs, depreciation costs and increase in worker productivity make investment in fleet solutions a no-brainer.”

For SageQuest, a Beachwood, Ohio-base provider of Mobile Workforce Effectiveness, its customers realize savings in several ways:

Reduced fuel consumption – one hvac company decreased fuel consumption by 700 gallons per month -- or a tank per week, per vehicle -- by eliminating unauthorized use. The payback: $145.83 per month, per vehicle.

Better routing – another hvac company uses its fleet management solution for more effective tracking. The company saw an 8% reduction in fuel costs, 6% decrease in payroll and a notable increase in customer service and satisfaction.

The AberdeenGroup study also notes that information on speeding, engine idling, mileage driven and vehicle location can provide valuable insights in helping modify operator behavior leading to lower fuel consumption, maintenance, insurance and accident costs.

One company that Aberdeen queried about fleet maintenance stated that it installed a system on the vehicles that automatically turned off the engine after idling for three minutes, which helped reduce fuel consumption.

Still not convinced that fleet management can help you reduce costs?

The study shows that “best-in-class” companies, those that practice fleet management, pay an average of 17.6 cents fuel cost per mile. “Average” companies pay 24.9 cents per mile and “laggards” – those that do not manage their fleets – have no idea how much they pay per mile.

For some companies, installing a fleet management solution means disgruntled employees. The fear of Big Brother watching could harbor ill-will.

According to the Aberdeen study, “best-in-class” companies overcome this challenge by rewarding operators for good behavior rather than penalizing them for bad behavior.

In the December 2006 issue of HVACR Business magazine, Peter Strozniak’s article, GPS Comes of Age notes that one company had five employees quit after a fleet management solution was installed.

“When we cleaned out their trucks, we found out they were doing side jobs,” recalls Jamie Gerdson, a third-generation owner of Apollo Heating and Cooling of Cincinnati, which serves southern Ohio and northern Kentucky. “If your employees don’t want to be monitored, then you have to wonder if you really want those guys on your team,” Gerdson says. “If they aren’t doing anything wrong, what’s the big deal?”