SPECIAL REPORT
Business Mobility Solutions
Innovations in Business Mobility Solutions Going Mobile: The Changing Face of Business Mobility How We Are Learning to Share Creating a Greener Business Fleet The Future of Business Mobility
Published by Global Business Media
BUSINESS MOBILITY SOLUTIONS
SPECIAL REPORT
Business Mobility Solutions
Contents Foreword 2 Tom Cropper, Editor
Innovations in Business Mobility Solutions
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Dave Jones, Communications Manager, Alphabet Innovations in Business Mobility Solutions Going Mobile: The Changing Face of Business Mobility How We Are Learning to Share Creating a Greener Business Fleet The Future of Business Mobility
Published by Global Business Media
Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom Switchboard: +44 (0)1737 850 939 Fax: +44 (0)1737 851 952 Email: info@globalbusinessmedia.org Website: www.globalbusinessmedia.org Publisher Kevin Bell
Introduction Towards Business Mobility AlphaCity Advanced Corporate CarSharing Advantages Government Backing AlphaCity Case Study: Royal Borough of Windsor and Maidenhead Four Key Factors to Consider When Considering Advanced CarSharing Mobility is the Future
Going Mobile: The Changing Face of Business Mobility Tom Cropper, Editor
Editor Tom Cropper
The Impact of Technology Challenges and Obstacles A Time to Share
Business Development Director Marie-Anne Brooks
How We Are Learning to Share
Senior Project Manager Steve Banks
Jo Roth, Staff Writer
Advertising Executives Michael McCarthy Abigail Coombes
A Growing Economy Entrepreneur Driven Governments and Regulators
Production Manager Paul Davies For further information visit: www.globalbusinessmedia.org The opinions and views expressed in the editorial content in this publication are those of the authors alone and do not necessarily represent the views of any organisation with which they may be associated. Material in advertisements and promotional features may be considered to represent the views of the advertisers and promoters. The views and opinions expressed in this publication do not necessarily express the views of the Publishers or the Editor. While every care has been taken in the preparation of this publication, neither the Publishers nor the Editor are responsible for such opinions and views or for any inaccuracies in the articles.
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Creating a Greener Business Fleet
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James Butler, Staff Writer
Going Electric Alternative Fuels Telematics
The Future of Business Mobility 13 Tom Cropper, Editor
A Healthy Market Data and the Cloud An Autonomous Future
References 15
Š 2016. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner. WWW.CEOREPORTS.COM | 1
BUSINESS MOBILITY SOLUTIONS
Foreword A
SMALL business owner once told me he
companies to reassess their business mobility
preferred saving money to making money,
strategies, before Jo Roth examines the past, present
because saved money came with no tax. It’s a
and future of the sharing economy. This is something
slightly blinkered viewpoint, but he does have a
which has moved from the fringes into the mainstream
point. For businesses of all sizes looking to survive,
with remarkable speed and still has plenty of room
the choice often comes down to make more
for growth.
revenue or become more efficient. If you can’t do one, you must do the other. One way in which companies can improve their balance sheets is to make the best of their business mobility solutions and to unlock spare capacity. In our opening article, Dave Jones and Mark Gibson of car sharing company AlphaCity talk about how their model of advanced car sharing can save companies and public sector organisations a huge amount of money, while also working towards carbon cutting goals.
We’ll look, also, at the key advantages a new business mobility solution can bring to a company by examining some of the most cutting edge trends and developments. Finally, we’ll look ahead at the future. In an environment which is moving so quickly, it’s not easy to predict its future direction with a huge degree of certainty. However, with so many innovations in the pipeline, this is a key issue which companies would do well to examine.
The AlphaCity service is very much part of a rising trend known as the sharing economy and our next two articles will look into this in more depth. First, we’ll examine some of the key issues which are driving
Tom Cropper Editor
Tom Cropper has produced articles and reports on various aspects of global business over the past 15 years. He has also worked as a copywriter for some of the largest corporations in the world, including ING, KPMG and the World Wildlife Fund.
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Innovations in Business Mobility Solutions Dave Jones, Communications Manager, Alphabet
Introduction Businesses often manage the costs of moving people and delivering goods and services under separate budgets for travel and expenses, fleet, sales, operations, HR and so on. Companies also now have extra financial and regulatory obligations to comply with, such as mandatory carbon reporting rules and new regulations like the Energy Savings Opportunity Scheme (ESOS). Estimates of the financial drain on business imposed by these fragmentary travel and transport policies are hard to come by but two figures from the public sector are instructive. The Treasury’s 2015 spending review found that the MoD spends £115 million a year on taxis. And research by the industry journal Fleet News suggests that UK country, district and metro authorities spent around £0.5bn on ‘grey fleet’ travel (employees driving their own cars on business) last year. Of course, taxis and grey fleet are only two of many costs of keeping business on the move. Historically, most businesses have not dealt with all these costs as whole and, therefore, they do not have full visibility of what is driving their Total Cost of Mobility (TCM).
Towards Business Mobility More than ever, organisations need an overarching strategic framework for achieving cost-effective and environmentally-sustainable business travel and transport. Increasingly, they are finding the answer in Business Mobility. It’s a concept that helps to reduce both operating costs and carbon footprint across the spectrum of business travel activities. A Business Mobility solution deals with the entire business travel needs of the organisation and each individual, and includes all the journeys they make across all modes of transport. Business Mobility addresses the whole picture: not just applying the right mix of funding solutions and fleet management services, but also by implementing innovative mobility solutions, precisely tailored to reduce the company’s TCM. These mobility solutions span from current fleet products such as Contract Hire and
risk management, to new concepts such as advanced corporate car sharing and e-mobility. Of these innovations, corporate CarSharing is one of the most exciting, with the potential to transform the productivity of mobile employees. If your business has a car park, look out at it. How many of the cars and other vehicles belong to the business? How many of those expensive mobile assets sit in the car park doing nothing from 9am to 5pm every day?
AlphaCity Advanced Corporate CarSharing Corporate CarSharing is essentially a smarter and more efficient alternative to the mixed bag of pool cars, taxis and daily rental that companies typically rely on for ad hoc business journeys. Alphabet’s advanced CarSharing solution, AlphaCity, is effectively a pool car, taxi and hire car all rolled into one vehicle. Unlike a public car club, of which anyone can be a member, corporate car sharing vehicles are leased to the business or organisation. This guarantees them exclusive use. Developed as a Business Mobility solution, not a conventional fleet management product, AlphaCity requires fewer assets than conventionally allocating individual leased cars to individual drivers. It is less expensive than taxis or/and more efficient than hire cars and it carries none of the widely-recognised risks attached to ‘grey’ fleet (drivers who use their own cars in return for mileage payments). Another feature of AlphaCity is that each multiuser car can free up several parking spaces otherwise needed for pool cars and spare fleet. The benefits for businesses limited by site constraints include easier access for customers and suppliers and less time lost for mobile workers. AlphaCity comes with an online reservation system operated by Alphabet that allows employees to self-manage their use of the car – on average, 27 employees use each AlphaCity vehicle. Drivers use a personal smartcard to access the cars – so there are no keys to keep track
More than ever, organisations need an overarching strategic framework for achieving cost-effective and environmentallysustainable business travel and transport
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car allowance users through Employee Car Ownership Schemes, to leased cars, vans and large commercial vehicles.
The benefits for businesses limited by
Government Backing
site constraints include easier access for customers and suppliers and less time lost for mobile workers of – and Alphabet looks after all the car’s routine needs such as maintenance, cleaning and fuel management. It’s essentially a turnkey solution for multi-user business mobility (except that there are no actual keys, of course!).
Advantages The advantages of corporate CarSharing go beyond productivity and cost savings. It requires almost no additional internal resource overhead and its modern, sharing, on-demand features appeal strongly to employees, especially Millennials. The specially-equipped, low-CO2 BMWs and MINIs used by AlphaCity are also a cut above the usual pool car since Bluetooth and SatNav are standard features. As well as exuding employee appeal, they present customers with a progressive company image and are equipped for business. AlphaCity offers an effective technologydriven answer to the problem of high-cost adhoc journeys. It sits within Alphabet’s complete spectrum of fleet and travel solutions, which ranges from tax-efficient net cash schemes for 4 | WWW.CEOREPORTS.COM
The UK government is strongly behind the idea of businesses turning to the emerging ‘sharing economy’ to boost their productivity. The Department for Business, Energy and Industrial Strategy began recommending two years ago that public bodies should investigate whether they would save money if they replaced their fleets with suitable car clubs. AlphaCity CarSharing is now in use with several private sector companies and local authorities. This year alone, AlphaCity cars will cover the equivalent of the distance to the moon and back – twice. As the following case shows, AlphaCity delivers exceptional savings.
AlphaCity Case Study: Royal Borough of Windsor and Maidenhead Within months of replacing its pool car fleet with an AlphaCity advanced CarSharing scheme, Royal Borough of Windsor and Maidenhead council was already on track to achieve an annual saving of £100,000 on its staff travel costs. Making 13 keylessentry AlphaCity MINI Coopers available to its employees has also reduced grey fleet use and is helping the council deliver its air quality improvement plan. Recommended The council is advised by the Energy Saving Trust, which recommended in 2015 that it
BUSINESS MOBILITY SOLUTIONS
evaluate new mobility technologies that could reduce the costs and emissions from business journeys in cars. When Fleet Manager, Mark Green, looked at AlphaCity advanced CarSharing, with its hassle-free, fully-remote, keyless operation and lowemission car options, he felt that it could be the solution the council was seeking. Following extensive consultation with Alphabet, the council took delivery of 13 AlphaCity cars in January 2016. They replaced seven small diesel hatchbacks and two four-year-old electric vehicles. The reason for deploying a greater number of AlphaCity vehicles was that the council wanted to reduce grey fleet mileage. It expected – rightly as it turned out – that staff would prefer driving the high-tech MINI Cooper 1.5-litre petrol 5-door cars to using their own vehicles. More than 200 staff have already joined the council’s scheme. Administration reduced by 90% AlphaCity has cut the council’s administration overhead for car travel by about 90%, said Mr Green. Alphabet operate the keyless technology that enables staff to access the cars using only their scheme membership cards. The online booking system, which shows cars’ availability and restricts access to staff who have made reservations, is also managed by Alphabet along with maintenance and valeting of the cars themselves. “With both the booking system and vehicle on-board technology, pool car users do not have to come into the office to pick
up keys,” said Mr Green. “Employees can go straight to the cars, so it’s far more efficient than the system we originally had in place. This scheme is also really good for employees who walk, cycle or use public transport to get to work and back… A car is available, should one be required, 24 hours a day, seven days a week.” Working toward better air quality Royal Borough of Windsor and Maidenhead has five Air Quality Zones in its area, where it needs to reduce the level of diesel particulates and NOx emissions. By reducing the need for employees to use their own cars for commuting or work journeys, the AlphaCity scheme is contributing to its clean-up campaign. Air quality was also a key consideration behind the choice of petrol cars for the scheme, due to the absence of particulates.
Alphabet uses the ‘Business Mobility Roadmap’ to plan and implement a fully-tailored solution to suit each customer’s requirements with help from our growing suite of advanced solutions
Expansion planned There are no restrictions on staff using the scheme. Any of the council’s employees can become a member. Those who drive their own cars on business are encouraged to give AlphaCity a try, and the strategy is working. Having achieved its initial target for grey fleet cost-savings with just 13 cars, the council is considering expanding its AlphaCity fleet to 24 to make still greater inroads into its car travel costs. AlphaCity at Windsor and Maidenhead in numbers Annual saving on travel costs: £100,000 Reduction in pool car administration: 90% Average users per AlphaCity vehicle: 16 WWW.CEOREPORTS.COM | 5
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Four Key Factors to Consider When Considering Advanced CarSharing 1. Understand the opportunity Mention ‘CarSharing’ and many people think of lift-sharing schemes for commuters. Advanced CarSharing, where your staff join an internal ‘car club’ exclusively for your employees, is designed to be cheaper than employees using their own vehicles on business, or daily rental or taxis as it saves time, rentals and fares.
Future methods of getting employees from A to B will be more collaborative, efficient and cost-transparent than traditional fleet arrangements
2. Build a business case Obviously you need to see a business case for introducing CarSharing. This could be the opportunity to review the total cost and productivity impact of your organisation’s travel and transport activity – its Total Cost of Mobility in other words. A specialist mobility company will undoubtedly be able to identify potential cost savings across the spectrum, not only related to CarSharing. Set a broad scope for the review. Include vehicle funding and operating, other travel, modes, grey fleet mileage and fuel expense payments, environmental taxes, health and safety risks and productivity impacts of travel versus e-communication. What government support is available for upfront investment? For example, the UK’s Energy Saving Trust offers businesses tools and consultancy to tackle travel costs. Grants are available for installing charging infrastructure for electric vehicles, which are often well-suited to advanced sharing schemes. 3. Administration, access and control There is always a risk that a change in strategy will end up transferring costs within the business rather than actually reducing them. A key feature of advanced CarSharing is its almost negligible internal administration overhead. Conventional car pools are notoriously heavy on administration, as someone needs to handle bookings, keep track of keys and see that vehicles are cleaned and serviced. So too are hire car bookings and settling expenses claims for taxis and ‘grey fleet’ travel. AlphaCity’s technology overcomes these limitations by allowing users to self-manage bookings while Alphabet takes care of everything else down to cost-centred reporting and billing.
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4. The tax position There are no benefit tax implications of advanced CarSharing as long as the cars are genuinely used by more than one employee. HMRC will not demand any benefit-in-kind tax or National Insurance from users or the business as long as any private use is strictly ‘incidental’ and it does not account for more than 5% of the car’s total mileage.
Mobility is the Future It is becoming ever clearer that Business Mobility is the future for companies large and small. Future methods of getting employees from A to B will be more collaborative, efficient and costtransparent than traditional fleet arrangements. Early adopters of mobility solutions will gain a competitive advantage, especially as the logistics of corporate CarSharing also lend themselves to using electric vehicles. More and more organisations are using Alphabet’s holistic ‘Business Mobility Roadmap’, which begins with a complete 360o analysis of their mobility needs and travel costs, many of which may be hidden or going unrecognised. Alphabet uses the ‘Business Mobility Roadmap’ to plan and implement a fully-tailored solution to suit each customer’s requirements with help from our growing suite of advanced solutions. These tools allow organisations to ‘think beyond the vehicle’ and identify the most suitable mobility solution for each individual and journey. And, in doing so, they can boost employee satisfaction, increase productivity and shrink overheads. As efficiency and productivity become evermore decisive watchwords, and focus migrates towards broader benchmarks such as Total Cost of Mobility, rather than only on vehicle operating costs, Alphabet is positioned to help its customers deliver the so-called ‘triple bottom line’ of more productive services, strategic cost reduction and reduced CO2 emissions.
BUSINESS MOBILITY SOLUTIONS
Going Mobile: The Changing Face of Business Mobility Tom Cropper, Editor A new generation of technologies, products and services promises to revolutionise the way companies manage their fleets.
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USINESSES ARE becoming more mobile. For evidence, just have a look at the growth of mobile technology in business. Estimates suggest that by 2019 there could be 3.5bn smartphone users around the world1. A report from IDC predicts worldwide cloud computing to grow at a CAGR of 19.4% between 2015 and 2019 to reach $141bn2. Spending on cloud infrastructure as a service hardware is predicted to reach $38bn by the end of 2016 and grow to $173bn by 2026 3. Businesses are becoming more mobile with employees breaking free from their desks and able to collaborate with colleagues in multiple locations.
The Impact of Technology This technology has ripple effects across a business’ operation. Cloud computing systems such as Amazon Web Services, Salesforce, and the Microsoft Cloud can be simpler to set up and less expensive to run than on-site accounting software packages such as Sage. A survey from Rackspace suggests the average cost saving for businesses is 23% - and 62% of those businesses reinvested the funds saved into their business and helped to increase profits4. They are more flexible and can easily be updated, allowing a company to ensure its systems remain at the leading developmental edge. Competition within this sector is high, which accelerates innovation as providers fall over themselves to introduce new features. By far the most important benefit, though, is the mobility such technology allows. Imagine a salesperson attending a meeting, for example. He can now update notes in real time rather than returning to the office to transcribe them manually into the system. This enables him to quickly put into action ideas which arise at meetings. Most chief executives understand the frustration of the gap between ideas and action.
By allowing people to take that first step quickly – even if it is just sending an email or posting a note on the client’s profile – they ensure events are set in motion more rapidly. This cuts down on the amount of time wasted during travel. A salesperson could attend several meetings on the bounce, updating them all in real time, rather than having to return to the office every time. They can go straight home and work remotely – it all adds up to a more productive day and lower fuel costs. Insert Image 1 – no caption
Challenges and Obstacles However, all these benefits create challenges for logistics, finances and compliance. Moving staff and products around can be expensive and, with increasing regulation and oversight, businesses are having to get creative. Companies come under increasing pressure both from the government and the public to manage their carbon footprints. The Energy Savings Opportunity Scheme requires qualifying organisations to carry out ESOS assessments every four years. Companies can take one of two views of this. They can see it as a statutory duty or they can realise the business opportunities it can bring. Unlocking opportunities to reduce carbon within a company can not only reduce emissions, but also energy costs. Businesses of all sizes are big users of energy and big wasters. Lights are left on overnight, vehicles are driven inefficiently, travel costs are too high. Reducing this waste is a great way to unlock hidden revenue. A report from Energy Forecaster points out that a company would have to generate £10 worth of sales to receive the same benefit as reducing energy costs by £15. These issues become all the more urgent given the uncertain nature of the economy. Slowing global growth, fears around Brexit and volatility in fuel energy markets put a strain on
All these benefits create challenges for logistics, finances and compliance. Moving staff and products around can be expensive and, with increasing regulation and oversight, businesses are having to get creative
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Across the entire scope of their operations, companies are looking to manage costs in a more proactive and innovative way
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profit margins. Recent surveys suggest that small business confidence still remains reasonable but, even so, costs are tigh6. Across the entire scope of their operations, companies are looking to manage costs in a more proactive and innovative way. This includes business travel, where a more unified business mobility strategy can bring together every aspect of a company’s travel arrangements to minimise costs and maximise productivity. A number of new developments and technologies hold the key. As mentioned earlier, the arrival of the cloud has increased employee mobility and enabled companies to be much more flexible. However, it also offers a range of exciting opportunities for fleet managers. The cloud, coupled with internet of things (IOT) technology, significantly enhances the amount of information that can come into a company. A fleet manager, for example, can monitor the real time location of employees when they are out on the road. They can see which routes they are taking and come up with ideas for more fuel efficient options. With the increasing use of devices such as telemeters, they can glean more details about how a car is being driven and offer advice on improving safety, and reducing fuel consumption.
A Time to Share The sharing economy also holds potential. Companies such as Uber have revolutionised the consumer market, but there is a great opportunity for specialised corporate car sharing services. These can reduce the total cost of fleet strategies while offering a flexible range of services which truly cater to the requirements of any companies. Finally, alternative fuel sources offer a way to break the reliance on oil. All companies which use a sizable fleet find themselves subject to the fluctuations of the oil market. Electric and hybrid cars offer a way to reduce carbon consumption and fuel costs, although obstacles still remain in terms of infrastructure. Opportunities to recharge car batteries are still limited, which restricts their range. This should change in the future as the technology matures but, even now, some companies are finding that these developments suit their needs. Technology has advanced to a point where it offers significant gains over existing tried and trusted techniques. Those managers who are alive to the change and on top of the latest trends will be able to gain a crucial first-mover advantage. At several points they can make crucial savings which add up to a sizeable competitive advantage.
BUSINESS MOBILITY SOLUTIONS
How We Are Learning to Share Jo Roth, Staff Writer The sharing economy is big business, but having revolutionised the consumer market, can it do the same for corporates?
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E’RE ALL taught it at school: it’s good to share. Now that’s becoming the basis of a rapidly emerging economy which looks set to dramatically change the way we run much of our lives. Whether it’s using a car through Uber or staying in a flat via Airbnb its opening up new revenue streams and helping people to save money. Now it’s moving from the fringes into the mainstream with some predicting it could – in some areas – eclipse its more traditional counterparts.
A Growing Economy According to PwC “The rise of the sharing economy is changing the face of European business – creating opportunities for new entrants, challenges for incumbent players, and searching questions for all stakeholders.” Its report for the European Commission shows that activity in the sharing economy has grown rapidly over the past two years7. In 2015 alone five key areas generated revenue of nearly e4bn and facilitated e28bn worth of transactions. Looking to the future, PwC remains bullish about its prospects with many sectors expected to rival their traditional counterparts. Much of this growth has come from the consumer market with the likes of Uber and Airbnb making headline gains. However, it is in the world of business that some of the most intriguing opportunities for the future may well lie. As a report from the Boston Consulting Group (BCG) shows, the sharing economy is disrupting ‘markets around the globe’, particularly in business mobility solutions. Starting out from a very low level, with small urban car sharing clubs, it is now growing to become a multi-billion-dollar global phenomenon. BCG’s report suggests that by 2021, 35 million users could be booking 1.5billion minutes of driving time, generating revenues of e4.7bn8. Much of that growth could be supported by the fleet car market as businesses increasingly turn towards the
sharing economy as a way of reducing the cost of business mobility solutions.
Entrepreneur Driven Growth has been driven by entrepreneurs and small businesses who are willing to take high risks in pioneering new opportunities. As such, it benefits from all the plusses and minuses which come with an entrepreneurdriven sector. Innovation is ripe and moving fast. Small enterprises are cropping up by the week offering new solutions to businesses and individuals. Some will thrive; others will not. The downside of all this is that companies in this sector often need scale to fully deliver their goals. As the market grows, we’ve seen larger companies acquiring small businesses to access these new markets. The proliferation of players within this sector, though, adds complexity. As a business looking to the sharing economy to improve its business mobility strategies, it can be difficult to know which option would provide the best reward. Businesses need to match the right provider to their needs. In the rush to cater to this growing market, there is a certain amount of market cross-pollination as different businesses expand into new areas. In doing so they are hoping to capitalise on a market created by the specialists. The question is, which one should they use? Certain specialists can provide a level of service which others cannot. They are tailored to the corporate world and can more easily be tailored to suit an individual company’s specific requirements. Some, for example, provide detailed consultation services, assessing a company and using their experience and expertise to recommend the right approach. They might come up with a fully tailored car sharing scheme for your company, using models specifically designed for corporate use. The AlphaCity service, for example, uses
The rise of the sharing economy is changing the face of European business – creating opportunities for new entrants, challenges for incumbent players, and searching questions for all stakeholders
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It’s not only the attitude of businesses and potential clients that could shape the future of this industry. Governments and regulators have an important role to play
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BMW and Mini cars9, which use the latest fuel saving technologies such as Efficient Dynamics to maximise fuel efficiency.
Governments and Regulators It’s not only the attitude of businesses and potential clients that could shape the future of this industry. Governments and regulators have an important role to play and their reactions have certainly been mixed. In some instances, the authorities have been wary about the growth of the sharing economy or even how to define it. Austin Texas, for example, has reversed regulatory rulings to make it more difficult for sharing companies to thrive. The UK on the other hand has been much more welcoming. As the government’s own review into the sharing economy states, this market is seeing the “emergence of everyday entrepreneurs. They are the challengers, the innovators”10. It can solve social issues and drive growth. Their attitude is to remove barriers and create as friendly an environment as possible. As part of the government’s recommendations, it created an innovation lab for the sharing economy which could act as an incubator. Pilot schemes will be launched in Leeds and
Manchester to trial local sharing initiatives such as shared travel, public spaces, health and social care. It also believes more should be done to enhance public trust in online transactions and new companies. Measures such as Gov.uk Verify should be expanded to the private sector to help increase consumer faith. It all depends on how we view this resurgence. Is it creating jobs and revenue or is it simply replacing existing jobs with something far less reliable? Uber, for example, ran into controversy over how much it paid its drivers. Black cab drivers took to the streets to protest its rise. In some instances, regulators have adjusted their rules specifically to hinder the advance of the sharing economy. Whether one views it as a positive development or not, the sharing economy is here to stay. Some players are already well beyond the stage of scrappy start-up and are major companies in their own right. What matters is for businesses to understand the scope of this market, and how it can be applied to their own operations. In many ways it creates a snowball effect. Early adopters are the first to gain a competitive advantage. Their example encourages others to make the move. As they demonstrate gains, others will follow.
BUSINESS MOBILITY SOLUTIONS
Creating a Greener Business Fleet James Butler, Staff Writer Alternative fuels are one of the key new trends for business mobility, but how can a business assess if they represent the best option for them?
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HEN DELOIT TE’S Italy branch decided to take a look at their business mobility strategies, they could see plenty of technologies which could help them achieve their goals. The problem was, how could they be certain they would be suitable for their business? Their situation mirrors that of companies around the world. They’ve heard and read about next generation technologies which could change significantly their approach to fleet management. Ideas such as telematics, alternative fuels, cloud computing, mobile apps and sharing services all offer potential, but managers have been burned by new solutions in the past. So, what are these new ideas, and how can businesses ensure that they fit into their company?
Going Electric The technology Deloitte were looking at was electrically powered vehicles. Having sat in the realm of future development technologies for some time, they are now gaining acceptance. A recent study from EV Obsession found that the electric vehicle market had grown 42% year on year in the first quarter of 2016, with a total of 180,500 units being shifted11. That still puts it firmly in the realm of niche. It’s slightly lower than last year due to the removal of some incentive schemes, and full plug in electric cars still represent only a tiny part of the overall market as Steve Gooding, director of the RAC Foundation says: “Getting more clean vehicles on the road is crucial to help tackle both climate change and poor air quality yet while there are a record 31.6 million cars on the UK’s roads, just 0.2% are ultra-green12.” Clearly, there is room for development. The hybrid electric market is growing strongly. Figures from the UK’s Society of Motor Manufactures and Traders found that demand for plug in hybrid vehicles had increased by 133%, thanks partly to the government’s Plug in Car Grant
Scheme13. As companies such as Deloitte Italy show, companies are actively looking at plug in electric vehicles. The problem is knowing for certain whether it’s an appropriate option. To solve the problem, Deloitte turned to corporate car sharing company Alphabet to perform an electrification potential analysis. This analyses a company, assesses whether electric cars would be beneficial and, if they are, how they should be incorporated into operations. To make this assessment, real time loggers are fitted onto fleet vehicles to record data such as speed, acceleration, mileage, driving performance and even parking. This information is used to build a comprehensive fleet driving profile which includes total fleet energy consumption and CO2 emissions. This enables an assessment of which solution would work best. In the case of Deloitte, the analysis suggested that 30% of their fleet should be replaced with plug in electric vehicles. They are also now looking at incorporating new BMWi3 vehicles in their fleet and using a corporate car sharing service – also provided by Alphabet – to further reduce costs. The construction company Interserve have also used the consultancy service, which suggested they replace nine of their vehicles with electric cars. “We strive to keep our fleet on the cutting edge and our costs in check” said Jas Dhanda, Fleet Manager Construction at Interserve. “The EPA has provided us with an optimised and realistic proposal for achieving just that. The fact that it shows ways to reduce our carbon footprint is a welcome bonus.” By making this change, Interserve cut emissions by 27.8% per month and fleet costs by 15.5%14. The electric solution offered by Alphabet includes a range of plug in electric vehicles. Once they’ve made the assessment, they will select the solution they feel is most appropriate. This includes a range of plug in electrical vehicles and
The hybrid electric market is growing strongly. Figures from the UK’s Society of Motor Manufactures and Traders found that demand for plug in hybrid vehicles had increased by 133%
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seeking not only to take
a choice of charging infrastructure. In addition, they offer a selection of mobility solutions which can include rental, corporate car sharing and driver support.
advantage of insurance
Alternative Fuels
Fleet managers are
discounts, but also to harvest information such as driver location, driving behaviour, fuel consumption, routes taken and mileage
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Ass the two examples above demonstrate, the decision depends on the individual company and the way in which fleet cars are used. For example, a fleet which covers mainly inner city driving over shorter distances may be considerably more suited to electrical vehicles than one which covers longer distances. A hybrid electric engine, on the other hand, can work as an intermediate option while some companies, especially operators of long haul trucks, are also investigating liquefied natural gas. Gas is compressed to 1/600th of its original volume. As a result, LNG has a far greater density than compressed natural gas. It’s a cheaper, cleaner burning fuel than petrol and, with reserves currently outstripping oil, companies can work on the reasonable expectation that prices will be more attractive than oil for the foreseeable future. Looking further ahead, hydrogen power and fuel cells also have potential, as governments and industry search for more viable alternative fuels which can reduce significantly our reliance on oil. The government recently launched a £2million competition to encourage companies to switch to hydrogen fuelled vehicles as part of its drive to have every car in the UK producing zero emissions by 205015.
Telematics In analysing their business mobility strategies, companies can rely on a piece of equipment which is fundamental to the Alphabet service. Telemetry devices can provide fleet managers with a huge amount of information available to managers. These started as a location finder to help owners locate stolen vehicles, but the technology has developed considerably. Insurance companies will now offer discounted premiums for those customers who install telemeters on their vehicles. Fleet managers are seeking not only to take advantage of insurance discounts, but also to harvest information such as driver location, driving behaviour, fuel consumption, routes taken and mileage, which would previously have been impossible. This can help manage the way the entire fleet is used to reduce the total cost of fleet ownership, but it can also help to analyse the needs of a business. Managers can decide how many vehicles are in use at any one time, they can see how much capacity is being wasted within the fleet and they can decide which vehicles and types of fuel would be the most cost efficient. Fuel is crucial to any fleet management strategy. The arrival of new technologies and types of fuels is creating a range of opportunities to make savings. Accurate assessment of these opportunities and how they can be integrated into the company’s operations can lead to substantial savings which, in turn, can create a key competitive advantage.
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The Future of Business Mobility Tom Cropper, Editor Business mobility is changing. Here are some of the things we should expect.
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IG CHANGES are on the horizon for fleet management and business mobility. Advanced technology, fresh thinking and new challenges have the potential to change the nature of the game and how it is played. So, what developments can we expect to see over the next decade?
A Healthy Market Looking to the future, the market looks healthy. A report from Markets and Markets suggests the fleet management industry will be worth $27.9bn by 202116. Companies will be looking to secure greater operational efficiency to cope with rising maintenance costs, uncertainties around the price of oil and increasing focus on environmental impact. The environment is likely to be a growing factor. As the government ups its game on cutting carbon emissions, technologies which promise to do just that are likely to attract favourable treatment. The green fleet market has hitherto been able to draw upon substantial government subsidies and grants. However, the recent trend has been to roll some of these grants back. Much will depend on whether or not governments are willing to continue this support, and if the market can break away from this dependence.
Data and the Cloud The cloud will continue to make itself felt across business. Indeed, it is likely that the growth seen so far will prove the be the tip of the iceberg. As this technology develops, we can expect to see more business functions added to the system, including fleet management. This could dramatically increase the amount of information at the hands of fleet managers. They will be able to achieve a higher degree of integration and system management to plan accurately processes such as vehicle replacements. Mobile devices are already becoming ubiquitous in cars offering the ability to synch music, emails and the entire contents of the
phone to the car. Businesses will be able bring in data such as mileage reports, vehicle health checks, performance and even driver behaviour. Telematics is already making itself felt in fleet management. Markets and Markets expect the commercial telematics industry to be worth $47.58bn by 202017. These devices deliver a huge amount of data on factors such as driver behaviour, fuel consumption, mileage and route choice. They can be used to secure better deals on insurance policies and to train staff to drive more safely and efficiently. For example, staff can be offered training on more economical methods of driving and GPS data can be used to plot more fuel efficient routes. With more data available about vehicle condition, managers will be able to proactively manage maintenance schedules to minimise the cost and time of repairs. This is, then, the age of big data when managers will bring in an ever increasing amount of information to improve their productivity and efficiency. Data on fuel transactions come from chip and pin cards, information on routes and mileage can come from telemetry devices, all of which can be reported back to a central base of operations for real time analysis. What are the advantages? A system might be able to monitor fuel usage and predict when a driver will need to fill up. Using GPS information about local services, it will then be able to send a text to the driver reminding him to fill up and showing him where the cheapest local filling station can be found. Information on how a car has been driven can be used to secure a better deal on insurance policies, and to cut fuel. A manager can draw up a profile of each driver’s style to see instances of high braking and excessive acceleration which could push up fuel consumption. Just as important as how this information is gathered will be the way in which it is analysed. The more technology and telematics systems evolve, the richer and more detailed the
This is, then, the age of big data when managers will bring in an ever increasing amount of information to improve their productivity and efficiency
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Everything will be connected and automated allowing businesses to quickly see how fleet management fits into all aspects of operations
information they will be able to deliver. That’s all to the good, but it’s of little use if that data can’t be analysed and put into action. Alongside the development of telematics, fleet management software packages are evolving to become more intuitive, flexible and easy to use. To provide value, these software packages will have to be compatible with existing business systems. The future belongs to the concept of the internet of things in which objects, machines and software communicate seamlessly to one another. Managers will want information about every aspect of fleet management to be incorporated and folded into existing reports. They will need something which is open and accessible, and can be used by everyone within the organisation. Increasingly, they will also want to make this information mobile. Companies are already developing an increasing range of fleet management mobile phone apps. These can deliver information and services to drivers such as: • The location of the nearest petrol stations. • Calendar alerts which tell drivers when it’s time to go to another appointment. • Suggested routes. • Information on mileage. • Quickly connect drivers to support service. They will also be connected to central business management systems so any information, from meetings and events can rapidly be entered into the correct database. Everything will be connected and automated allowing businesses to quickly see how fleet management fits into all aspects of operations.
An Autonomous Future Fleet managers may also have to prepare themselves for a range of more advanced and, in some cases, rather fanciful sounding technologies, such as self-driving cars. Autonomous vehicles are only just now becoming 14 | WWW.CEOREPORTS.COM
available on the market, but they could have a considerable impact on fleets in the future. A driverless LUTZ Pathfinder was recently tested on the streets of Milton Keynes18. To the surprise of bystanders, it managed to drive a total of two kilometres through the busy town centre streets. Built by Transport Systems Catapult, these use virtual maps of the town to navigate themselves through the streets. A driver was on board to take over in case of emergency. Uber and Google also have conducted tests in the US and the technology looks set to become increasingly common over the next ten years. Here in the UK, the government has already launched a consultation into changes to insurance rules and the Highway Code which could pave the way for driverless cars to be on the road by 202019. Ford has announced its intention to have a fully autonomous car in production within the next five years. The transition to full automation will not come overnight. Instead it’s likely to happen in incremental stages. Drivers could find themselves adopting a form of autopilot which takes over basic operations during long journeys. It’s a way of reducing the strain on drivers and enabling vehicles to travel for more prolonged periods. This will also raise a number of key questions such as how they affect risk management and insurance policies. These are questions fleet managers must be prepared to answer when the time comes. The future is full of possibilities and uncertainty. Technologies such as telematics offer clear benefits, but are not yet widely used. Self-driving technology is exciting, but unproven, while the rise of sharing services can also open up new ways of operating. Fleet managers need to have a foot in the present and in the future – they must stay up to date with the latest technologies available to them today while also looking at the development of technologies which could prove critical to the future.
BUSINESS MOBILITY SOLUTIONS
References: 3.5billion Smartphone users:
1
2
https://www.forrester.com/report/Forrester+Research+World+Mobile+And+Smartphone+Adoption+Forecast+2014+To+2019+Global/-/E-RES118252 IDC Report: https://www.idc.com/getdoc.jsp?containerId=prUS40960516
3
Cloud Computing Roundup:
http://www.forbes.com/sites/louiscolumbus/2016/03/13/roundup-of-cloud-computing-forecasts-and-market-estimates-2016/ 4
Making Cloud Computing Pay: http://www.forbes.com/sites/louiscolumbus/2013/04/10/making-cloud-computing-pay-2/#7379c516513b
5
Business Energy Consumption: http://www.rapidinsurance.co.uk/business-energy-consumption.html
6
Small Business Confidence: http://uk.reuters.com/article/uk-britain-eu-companies-survey-idUKKCN11D2TH
7
PwC Report: http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/future-of-the-sharing-economy-in-europe-2016.html
8
BCG Report: http://www.bcg.de/documents/file206078.pdf
9
Alpha City: https://www.alphabet.com/en-ww/alphacity
10
Independent Review of the Sharing Economy: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414111/bis-15-172-government-response-to-the-independent-review-of-the-sharing-economy.pdf
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Electric Car Sales Increased: https://cleantechnica.com/2016/06/05/electric-car-sales-increased-42-globally-q1-2016/
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Outlander Plugin Hybrid Remains Biggest Seller:
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http://www.am-online.com/news/new-car-news/car-model-news/2016/09/14/mitsubishi-plug-in-hybrid-maintains-position-as-most-popular-electric-vehicle Demand Soars for Electric and Hybrid Cars:
https://www.theguardian.com/environment/2016/jan/07/uk-demand-soars-for-electric-and-hybrid-vehicles 14
Analysis Identifies Companies’ Potential to Go Electric: https://www.alphabet.com/en-ww/article/analysis-identifies-companies-potential-go-electric
15
Government Launches Competition to Promote Roll Out of Hydrogen Fuelled Fleet Vehicles:
https://www.gov.uk/government/news/government-launches-2-million-competition-to-promote-roll-out-of-hydrogen-fuelled-fleet-vehicles 16
Fleet Management Industry: http://www.marketsandmarkets.com/PressReleases/fleet-management-systems.asp
17
Telematics Report: http://www.marketsandmarkets.com/PressReleases/commercial-telematics.asp
18
Self-Driving Car Tested for the First Time:
https://www.theguardian.com/technology/2016/oct/11/self-driving-car-first-uk-test-milton-keynes-driverless-lutz-pathfinder 19
Self-Driving Car First Test: https://www.theguardian.com/technology/2016/oct/11/self-driving-car-first-uk-test-milton-keynes-driverless-lutz-pathfinder
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Notes:
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