Pros and cons of outsourcing fleet management
Handling a fleet is not a simple job. It requires professional help to cater to all its aspects effectively. Some companies choose to outsource to meet their desired objectives, while others rely on fleet management systems to do it. However, this decision should not be rushed. It must be taken by carefully considering all the aspects in detail.
Outsourcing vehicle management has become a common practice. Many businesses prefer it over the in-house team as it offers more convenience. However, its effectiveness is debatable as it works for some companies and fails for others.
In this blog, we will discuss both positive and negative aspects of outsourcing vehicle management in detail.
Pros:
Better Expertise:
It is hard for businesses to find an effective solution to manage fleet operations. Even if they find it, creating an efficient management team is pretty hard. As service providers have better expertise in this field, they are more likely to perform the job better. They have extensive experience and have technical knowledge about management needs. Due to this reason, they can cater to all the requirements better.
Availability to Latest Technologies:
The latest telematics technologies are pretty expensive and require technical support to operate them. With the help of an outsourcing partner, the companies can save themselves from both problems. The service providers are up to date according to the latest trends in the industry. They deploy modern fleet management systems to perform the job providing a better probability of achieving desired outcomes.
Increased Business efficiency:
Managing a fleet is a huge task that requires a lot of time and effort. By outsourcing it, the company can concentrate on other aspects of the business like core management. With a lesser workload, the business can get better efficiency out of all the other departments. It results in more profitability in the long run.
Cost-efficiency:
Fleet management is not only a time-consuming job, but it is also very costly. Companies spend a large portion of their budget on it. From vehicle maintenance to tools cost, there are various aspects that require money. However, with outsourcing, the businesses have the luxury to avoid all such expenses. They do not have to worry about accident resolution, driver support, and operational requirements, saving a lot of cash.
Satisfied Employees:
The outsourcing helps the businesses direct their resources on core business tasks. As the companies have to pay a fixed amount of money to outsourced partners, they can better manage their budget. They can invest in employee development that can prove beneficial in the future.
With efficient vehicle management, drivers also feel comfortable. They tend to work with more efficiency and be more productive. With a more satisfied pool of drivers, the employee retention rate also increases.
Read Also: Leasing vs. Buying Fleet Vehicles: The Pros and the Cons
Cons:
Communication Gap:
An in-house manager is available to address the concerns of the drivers throughout the day. They can communicate their problems directly to the manager through for their instant solution. This open communication line is difficult to maintain in outsourcing. Although the service providers have a support team for problem-solving, they can only be contacted for significant issues. Therefore, the drivers miss the personal connection with the management team.
Lack of Adaptability:
When there is an in-house management team, they are fully aware of every business detail. They get updates on the evolving scope and future vision of the company. This information compels the managers to adapt their strategy according to the growing business needs. In addition to that, they also know the personal details of drivers like their attitude and work ethics. It helps them in better management of the operations.
With outsourcing, the service providers are disconnected from all such insights. They are also unaware of a company’s dynamics and hierarchy. It can lead to operational hiccups at times.
Lesser Accountability:
Accountability is an essential factor for the success of a business. The managers monitor every action of the drivers through a fleet management system. In case of any undesirable move, they can demand answers immediately. It keeps a strict check on the drivers, and they try to be vigilant during trips. This level of check and balance is missing in outsourcing. As there is a communication gap between the outsourcing partners and the drivers, there is lesser accountability.
Maintenance Issues:
Maintaining vehicles holds great importance for achieving better productivity. The in-house managers remain conscious of the maintenance requirements through fleet management systems. They anticipate service needs to keep the vehicles healthy. However, this vigilance is hard to find in outsourcing. Outsourced partners tend to maintain vehicles whenever there is a significant need for it. Due to this approach, the vehicles wear and tear a lot increasing their downtime.
As the outsourced management team is unaware of vehicles’ discreet details, they cannot understand the actual maintenance needs. For example, at times, an unnecessary repair can be done, resulting in more maintenance expense.
Making a sweeping statement about the effectiveness of outsourcing fleet management is hard. It is beneficial for some businesses and fails for others. However, by keeping the guidelines mentioned above in mind, a company can make an informed decision.
