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Efficiency - Feb 22, 2016

IoT and Fleet Management, A Primer

This is part 1 in a series of 6 posts on the Internet of Things for Business, also referred to as the Industrial Internet of Things or IIoT for short. This series will help business leaders and executives in Canada understand what IIoT is and how it can impact their company. Subscribe to the Rogers for Business Blog for updates.

IoT for the Consumer is Half the Story

Chances are, as a consumer, you’ve heard of the Internet of Things (IoT). Today, you might be wearing a smartwatch to track your workout. In your home you may have a Nest or Ecobee thermostat that you can control from a mobile app and you could be monitoring your newborn with an IoT video camera[1] .

In the not too distant future your fridge may do your grocery shopping for you too! But what about IoT for businesses? Does IoT go beyond the connected appliance and monitoring workouts? Where’s the business value of IoT? In this series we’re going to highlight industry and use case examples starting with the transportation industry and fleet management using telematics. Before we do that let’s start with some predictions and trends first.

The Industrial Internet of Things: Where’s the Value?

The business side of IoT is referred to as the Industrial Internet of Things or IIoT for short. The first question a savvy business leader will ask is what’s the overall opportunity for IIoT for my company? Here are some predictions to consider [source]:

      • IoT is a "business-led trend," with 23% of enterprises using IoT, with another 29% planning to do so within 12 months. (Source: Forrester)
      • 89.2% believe that 1 trillion sensors will be connected to the Internet. (Source: World Economic Forum)
      • More than half of major news business processes and systems will incorporate element of IoT by 2020. (Source: Gartner)
      • Hardware spending on consumer applications of IoT will total $546 billion, and the use of connected things in the enterprise will drive $868 billion in 2016. (Source: Gartner)

Predictions help us understand the potential impact a technology trend may have. However, they need to be taken with a grain of salt. Business leaders can’t spend too much time dreaming about a potential future that they have little to no control over. They balance skepticism and practicality when making decisions on the strategic direction of their company and investments in emerging technologies. While a vision of a “connected future” via sensors and “things” is cool, they have hard objectives that need to be met today, this month and next quarter!

When it comes to the value of the Industrial Internet of Things companies need to look at it from two perspectives. First, they need to see the impact it can have on their industry and potentially their customers industries as well. Second, they need to see use cases that can transcend across industry.

So, with that in mind, where are the short term opportunities for IoT/IIoT for small, medium and large enterprises in Canada? What are the business cases that demonstrate the value of the Internet of Things that can impact business performance now? Let’s take a look at telematics which is impacting the transportation industry and fleet management in the areas of safety, customer service and operational performance.

IIoT in Canada: Telematics

One IIoT area that is delivering business value today is telematics; a technology being used by thousands of companies to track, manage and optimize their fleets. Vehicles are equipped with an IIoT device/sensor that is used to gather data and monitor their movement. Software is used to visualize the data gathered and plot the movement of vehicles in real-time on a map.

Sources and inputs for telematics data: Infographic: United Rentals

While the notion of “vehicle tracking” might raise some “big brother” concerns among some, it’s important to understand the reasons why companies and drivers use it.

First and foremost is driver and public safety

A telematics device gathers data on many things including: average speeds, harsh braking and aggressive driving. It can tell whether a driver is wearing a seatbelt or not. Telematics data allows companies to establish a risk profile for their fleets and drivers and take corrective action.

Companies can monitor the location and movement of their trucks or service vehicles in real-time. They can tell customers or citizens in distress how close a service vehicle or ambulance is from their location. Data gathered can help companies know what routes and drivers are most productive and where others need some fine tuning. 

Real-time tracking of fleets (Graphic: Geotab)

The third is reducing costs

Companies need their vehicles to be in the field servicing customers and delivering goods and not in the shop. Using telematics data helps companies prioritize, and not guess, what vehicles must be serviced. In addition, having both a macro (fleet wide) and micro (vehicle specific) view on fuel consumption provides companies with additional opportunities to reduce costs.

Setting business rules to reduce maintenance costs (Graphic: Geotab)

Tracking fuel consumption by vehicle (Graphic: Geotab)

Telematics Case Studies

Companies of all sizes are using telematics technologies to improve safety and productivity of their fleets. In one case an insurance carrier covered the cost of deploying telematics for a fleet of 325 vehicles. In another case, Canadian Telematics company Geotab, helped Second Harvest, Canada’s largest food rescue and redistribution program, get much needed visibility into the movement, safety and overall management of their fleet of eight trucks.

In this Globe and Mail sponsored article, Putting its best fleet forward, Lori Nikkel explains the business value of telematics:

“Safety is part of it, though I’m not usually worried about our drivers; they’re great,” says Lori Nikkei, Second Harvest’s director of programs and partnerships. “What I love about the system is its beautiful metrics. It’s great for budgeting purposes. I can track fuel trends and say, ‘Okay, why are we consuming so much gas this month as compared to last?’ ”

“We don’t want people to see trucks idling that say ‘Second Harvest’ on them,” says Ms. Nikkei. “If you’re getting a coffee, guys, turn your motors off.”

[Disclosure: Geotab and Rogers work together to help companies deploy telematics solutions]

There’s More to IoT Than Hype

At this year’s CES event over 900 companies were touting “Internet of Things” products and the media had a field day covering connected dog collars, belts, socks and you guessed it fridges! And, let’s not forget that there is the potential dark side of IoT where hackers can take control of your connected home. Yes there is hype, there is risk but there are ways that IIoT is being used today to help companies improve customer service, productivity and their bottom line. Telematics is one example.

SEE ALSO: Building the foundation for the Internet of Things: Interview with Eric Simmons


About the Author

Chris Herbert is a B2B technology marketing expert and co-founder of Silicon Halton a technology community of entrepreneurs, business and technology leaders and people that love tech. He’s the founder and CMO of Mi6 Agency and was compensated to write this post. He tweets under the handle @B2Bspecialist.