20 Mar 19

Welcome to the new fleet manager

As the vehicle fleet ecosystem is changing from individual and permanent to shared and on-demand, fleet management has started its transition to the new, brave world of mobility.

From a historic perspective, the job of the corporate fleet manager has forged a hybrid position within either the finance, human resources or facilities functions. Depending on the fleet size and corporate organisation, fleet managers are usually responsible for additional categories on top of their fleet duties.

The most common combinations are fleet plus (compensation and) benefits, fleet plus facilities, fleet plus travel and procurement plus fleet. Dedicated fleet managers usually take care of logistics rather than company cars or manage regional or global large size fleets. 

The hybrid model has positively contributed to Fleet Management: procurement experience has pushed the supply chain to maturity, HR impact has added the driver experience to the fleet equation. Nevertheless, it has also weakened the position of the fleet managers, abandoning them on middle management level with insufficient leverage. Ultimately, the hybrid model has worked against innovation and progressive initiatives. 

Tensions: travel and procurement

Travel and Fleet are in essence complementary; only distance or means of transportation distinguish both. Functions that combine fleet and travel do a better job integrating last mile solutions, such as short-term rental and agreements with taxi companies or ride hailers. These agreements land in the intersection between both categories.

When fleet meets procurement, commoditisation of fleet takes place; RFPs and RFQs as well as e-auctioning most often focus on upfront pricing and tend to pay less attention to intermediate cost generators, such as recalculations and end of contract cost generators, such as damages and mileage adjustments.

Both examples demonstrate that hybrid Fleet Management models have a built-in tension zone that needs to be solved via process or policy.

The new conflicts

Mobility looks at transportation from a different angle; the one-employee-one-car model disappears to be replaced by on-demand solutions, going from pool cars, pool bicycles, taxi services and ride hailing, car sharing to public transport. New potential functional conflicts arise:

  • Sourcing becomes fully commodifiable: service requirements and pricing of mobility solutions are transparent. The hourly rate of e.g. a shared bicycle can be easily compared between various suppliers, which is the core job of Procurement specialists
  • Employee benefits can be reduced to a mobility budget that the employee is free to fill in with a range of available solutions. HR owns Compensation and Benefit and will determine the value of the benefit 
  • Travel is mobility plus air and hotel. There are very few reasons left to compartmentalize both categories
  • Split between private and corporate mobility will fade away. The need for specialised functions within a company will be taken over by aggregators, platforms that allow for multiple mobility solutions to be consolidated on one application

Corporate digitisation

Mobility is not the only factor that will change Fleet Management; digitisation will have an even greater impact on the need for mobility. 

A good example is the pharmaceutical sector, traditionally owners of the largest corporate fleets. In the recent past, Medical Representatives (MRs) drove around the country to meet doctors, visit hospitals and convince wholesale agents to inform them and push the product. Digitisation however is transforming the marketing model of pharmaceutical companies and solving the issues linked to the decentralisation of the medical profession. Informing medical professionals today is done digitally and remotely. In addition, the complexity of the medical profession allows less time for MRs to come and visit. As a result, the mobility needs of a pharmaceutical company has decreased. 

This trend is not only noticeable in pharma, it is spreading across all industries. Eventually, the need for dedicated vehicles will fade away.

Saving the fleet manager

Regardless of a dystopic vision that annihilates the fleet manager, there is a window of opportunity for the fleet professional, but it requires a significant change of mindset and the learning of a new skillset. The future fleet manager will be:

  • An Influencer: the hybrid position of today’s Fleet Managers can be exploited at their advantage: being on the crossroad of functions allows them to consider the company’s needs from different angles.
  • A Moderniser: keeping an eye open for evolutions and technology developments are part of the Fleet Manager’s nature
  • A Contributor: where the Fleet Manager can truly excel is in translating the changes in business models into actionable recommendations for employee transport. 

All in all, the job of the fleet managers is not over yet, but they will have to demonstrate understanding of the mobility ecosystem, changes within their own companies and formulate recommendations that will contribute to the company’s goals.

Authored by: Yves Helven