Is fleet management a cost and risk nightmare or an opportunity to utilise big data for a competitive advantage? That was the topic of an intimate dinner gathering of CFOs on 11th November 2015 at The Marion On Nicol hotel in Johannesburg, made possible by risk management and insurance firm Aon.
Find reports on our previous cfo dinners here!
Cameron McCulloch, chief operating officer of OneLogix had been invited to share his thoughts on the topic from a company that has made great strides and overcome severe challenges in the transport and logistics space. OneLogix recently achieved 10th place in the Sunday Times Top 100 survey which, for a business that nearly went belly up a decade ago, is a measure of the people and the leadership to pull in one direction. Cameron's message was simple:
"The devil is in the detail and you need the measurement tools to get into the details effectively".
In cab cameras, engine monitoring, gps, load tracking - these are all technologies that have accelerated dramatically over the last decade and with the parallel development of wireless telecommunications hubs vehicle telematics is shaping the future of transport and logistics.
After Cameron's introduction, discussion shifted to the use of these technologies in other jurisdictions and in particular the oil and gas sector. In regions like the US and the Middle East the firmer regulatory environment means that this type of technology is a necessary part of operating costs which ensures ongoing development. In South Africa there is less regulatory or commercial pressure to utilise this technology but operators who have used the technology are generally on the same page and agree it has the ability to drastically impact the bottom line.
People are often the difference between good businesses and great businesses, the CFOs agreed. None more so than in transport and logistics where, despite the vast network of people and machinery, the driver is his own MD once he gets behind the wheel. The ability to guide and influence his behaviour is key to managing both risk and cost. The technology goes a long way by providing benchmarks for driver behaviour but sharing in the spoils of success (in the case of some equity schemes for drivers) the technology is fully leveraged.
Technology is a threat if you feel it invades your privacy or can be used against you, the executives acknowledged during the dinner. They agreed that how the technology for fleets is "introduced and then used practically" is an important consideration when implementing. This probably goes for all technology implementations across any sector, but the scarcity of skill and unionised work force make this far more acute in the transport and fleet management sector in South Africa.
Southern Africa's relatively well developed road network, coupled with vast resources, has created a fertile space for the development of vehicle telematics technology and fleet management businesses. Finance teams are playing a critical role and CFOs are quick to admit that although many of their teams are at the coalface or very close to it, there is always more they could do to get closer to business and learn more about customers.
Aon's Deon Grobbelaar shared his thoughts on how technology would couple with insurance in the near future to drive deeper value for clients who own or manage fleets. But businesses with the right technology can already manage their own risk if they are financially big enough to create their own fund, he said.
Whether they owned fleets, leased fleet services or were in the business of providing technology for fleets, the consensus among the CFOs was that fleet management by it's very nature presents cost and risk challenges. With the right information tools (they need not be complex) and a culture that is built on using the information for positive and negative reinforcement you can not only overcome those challenges but carve out a significant competitive advantage.
Attendees:
- Megan Pydigadu, CFO at MiX Telematics
- Ramesh Katte, CFO at United National Breweries
- Warren Prinsloo, CFO at Jasco
- Lauren van Zyl, CFO at Eqstra Fleet Management & Logistics
- Geoff Glass, CFO at OneLogix
- Patrick Malaza, CFO at Scaw Metals
- Cameron McCulloch, COO at OneLogix
- Deon Grobbelaar, Retail Head: Sales at Aon
- William Juta, Finance Executive at Aon
- Graham Fehrsen, MD CFO South Africa
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