An innovative approach for Telematics Service Providers (TSPs) — Asset Management and Tracking


The key to penetrate to new vertical markets in the MRM & Telematics industries achieving lasting differentiation with better gross margins.

Mobile Resource Management (MRM) market status

“17M vehicles and 800,000 companies worldwide use telematics to manage and monitor their vehicles, drivers and assets: 32M vehicles by 2016.
8% penetration of the worldwide 200M commercial vehicle park will reach 14% by 2016.”

“The global MRM market will grow across all geographies but BRIC and N11 will represent 50% by 2016.”

“By 2020 the MRM market could achieve 50% penetration.”

Source: Licht & Associates

The above estimations and the tangible field results show that we are moving from the introduction phase to growth in Telematics Solutions and MRM. The different markets are already aware of these types of services and they are being widely implemented, either because the customers already understand that it’s worth to optimize their resources or due to local regulations.

The evolution of Telematics Solutions

Nowadays we can see a high level of specialization in almost any country that has Telematics Solutions implemented. Companies have local software development capabilities, offer innovative solutions and the awareness level of the customer itself and local regulations has increased. A company based in Europe, North America or Latin America has similar capabilities to provide high level solutions adapted to the local needs.

Another fundamental factor that helped companies or entrepreneurs turning very fast into TSPs is the existence of software companies that provide “white label” location solutions for TSPs. This software developers are highly specialized in this field and the solution is personalized according to the TSPs needs.
The most popular model under this modality is paying a monthly fee per active vehicle/asset, this means that it’s not necessary to invest large amounts of money in technology to launch a company and start providing services.

The tracking hardware is also a fundamental component in Telematics Solutions. This hardware has a wide price range and the main reason is quality and functionalities. Consolidated companies in the market prefer using high quality hardware to preserve and improve their reputation, while smaller companies or startups prefer implementing cheaper hardware till they become bigger and consolidate their operation.
The risk of this low-cost hardware strategy is better understood when the company evaluates its operational costs, returned hardware and the harm caused to their customers. It’s highly recommended to invest in high quality hardware solutions from day one to build a good reputation.

The entrance barriers to become a TSP are minimal, this means that consolidated companies compete with small ones or startups with lower operational costs. As a result of this situation we experience mainly lower prices in the entire supply chain (Software — Hardware — Services), competitors fighting to install the next available vehicle, selling the hardware almost at cost or providing a cheaper software.

So… How can companies continue growing? How can a solution stand out from the rest and differentiate in the provision of services?

The answer is offering innovative, specialized and differentiated services targeting segments other than vehicles. One of the high growth potential alternatives to study is Asset Management and Tracking.

Asset Management and Tracking

The majority of TSPs offer vehicle tracking and fleet management solutions. Some of them also offer Asset Tracking, but almost any of them deal with Asset Management and Tracking.
An Asset is any element subject to influence the customer’s business; it can be either a refrigerated container or an electric generator.

Asset Tracking basically is showing “dots on a map” and providing some basic indications such as movement for example. Asset Management and Trackingbesides showing location and status provides the customers with a powerful tool -data, which is the key to productivity and decision making to optimize their business.

The element of “Management” mainly comes from the hardware which should include certain characteristics that enable these kinds of solutions. Among them we can mention:

  • Long lasting battery (unlike hardware for vehicles which is always connected to the vehicle battery, Assets could be subject to long periods without energy supply.)
  • Impermeability protection (IP code) against water and dust, since the hardware could be installed in exteriors.
  • I/Os (digital/analog inputs and outputs), 1-wire interface, serial communication and more. All these options enable the connectivity of external accessories to the hardware to transfer data and information for the customer’s decision making.
    For example: Fuel and temperature sensors, magnetic sensors to control if a door is open or closed, identification methods, electronic locks controllable from distance, immobilizers and more.
  • Fast and easy installation.
  • Movement detection for a smart battery management.

The software module should be able to support all these applications as well, delivering alerts and reports based on the customer’s needs.

Some applications examples:

-Different types of containers – subject to long periods without energy supply and the need of measuring environmental factors.
-Light airplanes and helicopters – as a stand-alone tracking system independent from the electronic systems.
-Maritime applications – either close to the port or at the sea without cellular coverage to control the activation of satellite modules.
-Trailers & Tankers – subject to long periods without energy supply, notifying the pairing with the truck and/or data of additional sensors.
-Construction and agriculture machinery – subject to harsh environmental conditions and controlling I/Os from distance.
-Power generators – control working hours, fuel consumption and/or theft.
-Trains, ATMs, vending machines and more.

Any Asset, either fixed or mobile, is a potential candidate to develop tailored made solutions delivering valuable information about its operation for the customer’s decision making.

The next level in Asset Management and Tracking: Monitoring and Sensing

The next generation of solutions in the field of Assets is currently in its introduction phase and starting to be implemented. It’s based in hardware capable of connecting and interacting with different wireless sensors, which at the same time “monitor and sense” the conditions of the Assets, such as: temperature, humidity, pressure, impact, light, movement, presence and more.
This new market segment targets among others: logistics solutions, food transportation, cold chain management, pharmaceutics, high value goods, warehouse storage and more.

Conclusion

The MRM and Telematics market is currently in a growing phase with many TSPs of different sizes providing standard solutions, but only a few of them specialized in untapped areas with high revenue potential like Asset Management and Tracking.
Over time we’ll experience a migration of TSPs from standard to advanced solutions. Till this happens, the first TSPs striving for innovation and differentiation will be consolidated in this market segment.

=================================================================

Daniel Zloczower
Sales, Marketing & Business Development executive | Telecom, Telematics, Automotive, M2M, GPS, Security | LATAM, EUROPE
https://www.linkedin.com/in/danielzloczower
https://twitter.com/DaZloc

Related topics: TSP, Telematics Service Providers, GPS, GNSS, Security, Tracking, Fleet Management, Asset Management and Tracking, Wireless, Mobility, MRM, AVL, M2M, LBS, IOT.