Telematics for Small Business Operations

Big companies with large fleet operations should not be the only one to enjoy the benefits of telematics.   Smaller business operations can also benefit greatly from the logistical improvements from telematics, but typically do not have the resources to invest in, operate, and maintain the hardware, applications and services necessary to operate a vehicle telematics system.  There is a need for solutions that cater to smaller operations.

The term telematics pertains to a variety of technologies and applications that focus on the consumer and enterprise market for vehicle tracking, monitoring, and machine-to-machine (M2M) communications.  In the case of vehicle tracking and reporting, positioning and communications technologies such as Global Positioning Satellite (GPS) system are employed to determine the location of the vehicle and report its status.  In the case of M2M, telematics systems enable a remote system to communicate with and control vehicle systems and components such as the locomotive, logics, and security systems.

The specific technologies employed to deliver telematics solutions consist of in-vehicle and remote systems.  The in-vehicle system typically consists of a Telematics Control Unit (TCU), which includes GPS and radio communications equipment.  The TCU functions as the central platform of the telematics system, interfacing with vehicle systems/sensors and providing a point of interface and control between the vehicle and the remote system.  The GPS component provides the means of positioning the vehicle.  Communications systems range from satellite to cellular as a means of providing M2M communications between the TCU and the remote system, reporting data such as location, vehicle system information, and more.

The remote components of a telematics system consist of servers, application software, and data utilized to operate the telematics, which includes Geographic Information Systems (GIS) and application data.  The application software has the ability to process and respond to information received from the TCU as well as send control signals to the TCU for it to intervene as necessary in vehicle operation. 

Much of the consumer exposure telematics is thanks to companies such as General Motors with their OnStar system that is now available in more than 50 of their vehicles.  Most everyone has seen the commercials on TV that depict an OnStar subscriber that has a problem such as locking one’s keys out of the car, having and accident, or getting lost.  Due to the fact that the OnStar system tracks the position of the vehicle using the GPS system, the OnStar call center personnel know exactly where the vehicle is located to lend help, whether it be remotely unlocking the vehicle, directing emergency assistance, providing directions, or even helping to recover a stolen vehicle. 

While all of the aforementioned benefits are readily identifiable to retail consumers, few people outside the industry can relate or understand the needs for commercial enterprise users that telematics can solve.  The benefits to enterprise include vehicle tracking and electronic reporting, driver performance monitoring, stolen vehicle shut-down and recovery, remote diagnostics of vehicle components such as the engine (to determine maintenance needs and report problems before they become critical)

Regarding commercial enterprise telematics, 99.9% of the focus is on the needs of big business operations such as long-haul trucking operations and companies with large fleets.   While there are companies such as @ Road that provide mobile resource management solutions for the needs of larger organizations, there is an underserved need for smaller business operations, which typically have five or fewer vehicles.

As mentioned earlier, smaller business operations do not have the resources to invest in, operate, and maintain the hardware, applications and services necessary to operate a vehicle telematics system.  The lack of economies of scale and scope simply prohibit the ability for smaller companies to logical advantages enjoyed by larger companies through vehicle telematics.  Conversely, the larger telematics providers do not have the time or inclination to deal with the unique needs of each individual small company with respect to basic and value-added service functions.

What is at stake?  Why is this important? Industry analysts forecast global demand for commercial telematics to account for revenue ranging from $ 14 to $ 24B by 2010.  While these are impressive numbers, these forecasts primarily extrapolate the growth and usage of the large business operators. With millions of small trucks, taxi’s, and delivery vehicles worldwide without telematics, there is a large underserved target market and great associated market potential, when the hundred’s of thousands of small business are considered in aggregate.

It is therefore the opinion of the author that there is a need for an ASP-based telematics service offering that includes equipment, software, and services to satisfy small business operators’ individual needs.  The system would include positioning equipment, communications equipment, and services such as reporting, diagnostics, and messaging (typically email).  The ideal solution would be completely “turn-key”, allowing the small business operator to focus on their business and logistical improvements rather than telematics systems.  The key for small business operations is to leverage economies of scale gained from a telematics ASP to reduce lifecycle costs, including hardware and monthly communications fees

While the future is bright for telematics as a whole, it remains to be seen the extent to which smaller companies and those with minimal fleet operations will be able to enjoy the benefits of telematics.

Gerry Christensen has over 17 years of experience in planning, engineering, and product management, and business development telecommunications network, applications and services. He has specialized technology and applications experience in the areas of mobile location services/technology, mobile messaging services, and prepaid wireless.

He is author of Data on SS7 and Yes 2 Prepay and is co-author of Mobile Positioning and Location Management and Wireless Intelligent Networking. 

The author may be reached at Telematics@MobileIN.com