Should we consider outsourcing our fleet’s management needs or keep the work in-house?
This conundrum often leads to tire kicking without action. To make that decision, we offer some convincing reasons to consider the options.
Reasons to Keep Insourcing
Fleets look at insourcing fleet management based on maintaining:
- Control. Many firms enjoy having all functions performed in-house. Often, a bad experience with a third party partner is the core of this sentiment. Finding a great internal resource with fleet management experience is a possibility.
- Services. In-house staff may be able to buy or subscribe to fleet management software and services. Nothing speaks louder than experience. Software can’t take the place of experience. It’s critical to form buying agreements and fleet accounts with all potential vehicle manufacturers such that your in-house fleet manager may evaluate all brands. Personal biases toward vehicle brand, colors, and options are typical of a person in the fleet management role. Be mindful of this. Fleet management is primarily a quantitative exercise to select vehicles and equipment. It is then a test of logistics, project management, financing prowess, and management of registration, maintenance, fuel, and upfitting.
- Familiarity. When it comes to maintenance, scheduling, routing, budgeting, and overall business efficacy, managers whom you have trained are more familiar with daily operations than an outside fleet management firm. Every fleet management company needs an in-house contact to provide the valuable insights and personal information necessary for fleet management. Most of the best fleet management relationships utilize a third-party fleet management firm that’s an expert and has the processes, experience, and systems to manage your fleet — paired with an in-house resource that knows the needs, the people, and the details. That’s a fleet dream team.
Reasons to Consider Outsourcing
There are some rather attractive benefits from using an outsourced management partner:
If you function as a fleet manager, outsourcing can free up resources. The cost of a fleet manager is far less than it is for a full-time employee! Leverage this free time to your advantage by growing your business, opening new centers, or concentrating on marketing functions. Fleet management firms are experts at managing a fleet efficiently and will likely be able to save you a significant amount of time and money. Fleet management companies establish proven processes, timing, and best practices. You’ll feel more in control and organized and have the benefit of a fleet management firm with hundreds of clients like you.
- Time and Cost-efficiency. Thanks to relationships with dealers and OEM’s, fleet management companies get large fleet and dealer incentives that are not available to your business. Fleet management companies also have the resources to search nationwide for in-stock vehicles as needed, can sell vehicles at auction where the financial results are much greater than trade-in and have extensive reporting systems and safeguards. In short, all facets of business efficiency are well known to outsourced fleet management teams, and when you select a fleet management company as a partner, your business gets all their solutions on a silver platter (customized to your needs).
- What You Win. Work days are a fixed length. The more your firm and your people can focus on work, on sales, on productivity, and rely on proven experts in their field to provide the rest, your firm grows. Fleet management companies also bring with them financing capacity. Rather than relying on your corporate bank for all borrowing, fleet management companies are a one-stop-shop for fleet strategy, acquisition, maintenance, fuel, management, disposition and more. They open your eyes to new ideas, make sure you are staying in-phase with the market for new/used vehicles and technologies, and point out shortcomings in your fleet that deserve attention. You win with a fleet manager by your side.
For Further Consideration
Here are more things to consider in your decision-making process:
- Cost. Would outsourcing be as cost-effective as paying salaried or hourly managers? Crunch the numbers account for maintenance, fuel, payroll, everything! Add in the things that you just can’t handle in-house or premium prices you would pay that fleet management firms can capture, this will give you an immediate answer. Also consider that fleet managers can find ways to reduce unnecessary expenditures, maximize resale value, and update reporting, so you feel in control but not burdened. Fleet management companies exist because they save money, time, and stress. They specialize in driving value to your business and others.
- Staff Stress. Could an outsourced company help alleviate unneeded overtime? Are employees taking up roles they’re loosely qualified for to just “plug holes?” Subject matter experts are the present and future of productivity. Bringing experts onto our team and pick great partners that make us better. It goes back to the business mindset that 1+1=3 (if you have the right 1+1).
- Life After. Imagine hiring a fleet management company partner, establishing strategy and tactics for your fleet, priorities and set the plan into motion together. The team is stronger, so you’re not tasked with finding the right system, taking the costs, and risk of implementing, testing, and failing. You have a proven system that works for hundreds of firms just like yours. You have a fleet management firm that works with all of your competitors in your market and nationally and can give you best practices, cost savings measures, and processes that work! Life after selecting a fleet management firm is calmer, lower-stress and feels much more controlled. If a vehicle is totaled in an accident, you know the process and can focus on your role as CEO, CFO, sales manager, director of operations, while the fleet management firm solves the problem! You just give the nod of acceptance when they present the choices to you! How refreshing is that?
Make no mistake; fleet management is vital for numerous reasons. You’ve built your fleet from the ground up, are realizing nice profits, and would like to expand. Considering the many benefits of each, the decision whether you outsource for the many cost benefits and efficiency or keep your current crew depends on your ability to delegate control, listen to their feedback, and give them clear direction, and pick the right partner.