Fleet Management Outsourcing
Fleet management outsourcing has grown in popularity in recent years and, in this time of austerity, is being seen by businesses and government departments as a method of reducing the costs of providing fleet.
What is Fleet Outsourcing?
Fleet Outsourcing is the contracting to a third party provider the management of some or all of the fleet processes currently being delivered in house. Some outsourced arrangements involve the delivery of all fleet related processes whereas others involve a finite list for example, accident management or driver licence checking.
Benefits of Fleet Management Outsourcing
Outsourcing fleet activities allows the organisation access to expert fleet resource which helps manage the fleet in an effective and efficient manner. There will be economies of scale through engaging a range of subject matter experts without the fixed resource cost, or the risk, of employing people. Customers are then free to focus on their core areas of operations without being distracted by non-core functions.
Stay in Control
Whilst there are many benefits to the outsourcing of fleet management processes, there can be some pitfalls in practice. The scope of service needs to be agreed to make sure it meets the customer’s individual requirements. The transitional or implementation phase, which moves the service from the internal functions to the external provider, needs to have a strong governance structure in place to manage the project effectively. Toll gates should be put in place where both parties can measure progress against the agreed scope. A customer senior level sponsor should regularly review progress with the outsourced provider ensuring timely decisions are made where appropriate.
Once the service provision has gone live, the delivery of the service should be effectively monitored through effective key performance indicators (KPIs) and service level agreements (SLAs). The KPIs inform the customer how important facets of the outsourced arrangement are running against set criteria. Service level variances should be followed up by the client and service provider, ensuring corrective actions take place. Should any KPIs be consistently broken then the SLAs should provide a framework for restorative action either in the form of financial penalties or other contractual concessions.
Organisations that outsource their fleet processes should ensure they frequently benchmark the costs and benefits of service provision. Customers should ensure the supplier focuses on the continual improvement of fleet through innovation and process enhancements.
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