Fleet Ownership Costs

The cost of running a fleet can be staggering and it is even more difficult when you don't know where your money is going. For many small business owners and family business there just is not enough time to trackdown all of the expenses. In some cases, I have been told if the cost to find the savings was more than the savigns then why bother.

Why bother you ask? Because the cost of saving money on your fleet operations are compounding, meaning that the savings over time will continue to pay for itself over time.

Technology can help you save money on determining your fleet's Total Cost of Ownership and as technologiy increases the investment need to determine how you can save money is less than ever before. So lets review TCO:

At its most basic level, Total Cost of Ownership (TCO) can be defined as both the direct and indirect costs incurred throughout the life cycle of an asset. These costs relate to acquisition, deployment, operation, support and the expiration date of a product's usefulness.

Direct fleet costs: Direct costs cover tangible and support-related investments and expenses, including hardware, software, technical operations, technical support, fully loaded labor costs, and various administrative departmental allocations such as finance, human resources, and procurement.

Indirect Fleet costs: Indirect costs are hidden costs that are dispersed company-wide and involve ongoing interaction between a company's employees and the training, troubleshooting and maintenance associated with operating a technology. Such indirect costs reflect the value of employee time taken away from their primary or planned duties.

Determining TCO To determine your Total Cost of Ownership (TCO) on an annual basis simply compile and compute all of your a particular technology investment's direct and indirect costs.
Studies have shown that some technology items such as a basic $200 company printer can easily have an annual TCO of over $1,000 or more when needed supplies and maintenance requirements are factored in. A single corporate desktop computer can average over $5,000 per year in TCO.

However, in some rare cases, like that of a FleetBoss GPS technology purchase, a business's TCO can actually be quickly exceeded by a substantial Return On Investment (ROI) and revenue generation due to an increase in productivity, efficiency and profitability.

Clients who purchase a FleetBoss GPS solution generally experience a complete ROI within six months. A typical FleetBoss customer sees a 15% savings in fuel costs alone within the first year of solution operation. Similar savings and revenue are generated from preventive maintenance and increased service calls.

Making TCO analysis a regular part of your technology investment purchase process is a valuable and essential tool for any successful business.

So how do you get a handle on direct costs and save money on fleet expenses? A GPS fleet management system that tracks time, speed, idling, and many other factors can help you get started. Even if you are not sure about whether you want such a system, it's worth the look so you can understand how you may be able to cut fleet ownership costs.