In-house vs Outsource Fleet Management

In-house vs Outsource Fleet Management

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  • Post last modified:December 21, 2020
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Let’s start with the fact!

‘75% of the fleet managers need enterprise fleet management software to simplify their day-to-day operations’ states the data from Government Fleet’s annual benchmarking survey. 

Fleet management software is designed to offer greater visibility into operations, enhance productivity, assure safety, and ensure meeting road compliances. Now, the question arises is- ‘Is fleet management better executed in-house or should be outsourced to the specialists?’

To discover the answer, let us look at the pros and cons of the two (i.e. In-house and outsource fleet management) in detail, and decide which is the best approach to opt for your fleet business.

In-house fleet management

Benefits of in-house fleet management

  1. Enhancing fleet management processes is easy  

An external FMO (Fleet Management Organization) can never have complete access to your business’ entire information such as operational strategy, future plans, investment, etc.

Thus, understanding the bigger picture of business vision and goals is difficult for them. Consequently, negotiating for additional budget to enhance processes and update machinery seems challenging for external FMO.

Contrary to this, an in-house fleet manager has stronger hold on business data thus, demonstrating advancements and convincing the higher authority for upgradation is easy for an in-house fleet manager. 

  1. Reduced downtime 

An internal fleet management team knows the pulse of your business. It always has more understanding of business operations when compared to external FMO (Fleet Management Organization).

Because of which, identifying areas of concern, before they convert into problems, is easy and quick for internal fleet management team. Result: reduced unplanned vehicle downtime, ultimately decreased cost.

Disadvantages of in-house fleet management

  1. Increased capital costs

Spending money on getting suitable equipment to run an effective fleet management tasks like servicing and maintenance could be costly for businesses with smaller fleets when compared to the outsourced fleet management organizations.

  1. Difficulties in recruiting skilled staff

Hiring skilled labor to carry out specific fleet workshop tasks could be challenging and a costly affair.

Outsource fleet management 

Benefits of outsourced fleet management 

  1. Access to industry-wide specialists

Due to expertise in the field of managing fleets, an external FMO (Fleet Management Organizations) can help businesses to adopt best practices and introduce new approach to streamline and improve fleet processes. Definitely, it proves to be a valuable input.

  1. Ability to realign company’s focus

Outsourcing fleet management helps businesses to focus on their core operations, where the mission and vision of their business lies. Fleets may be just a part of those operations.

Thus, having a dedicated internal team to manage fleets may cost time and money to the company. In such a scenario, outsourced fleet management definitely proves beneficial.  

  1. Reduced risk

Frequently changing regulations makes it challenging for fleets to meet compliance. Outsourcing fleet management can address the challenge efficiently and reduce the risk to fail compliance.

  1. Access to a wealth of resources and knowledge

Outsourced fleet management organizations involve the use of latest technological tools and trending practices to help businesses run their fleets efficiently. Determining shortfalls and leveraging improvisations is easy for them.

Disadvantages of outsourced fleet management

  1. Loss of communications

Discussions with external FMO (fleet management organizations) regarding the incorporation of policies and procedures may take time to come in to action. It needs to go through several channels before being finalized. And, this time consumption may prove inefficient.

  1. Contract management

Once the contract has been signed up, then chances to negotiate for prices during trading difficulties becomes impossible. 

How to decide whether to opt in-house fleet management or outsource fleet management?

Here are the three major questions to ask yourself while deciding the best option for your business:

  1. What are the numbers of fleets? Count the number of your fleets and take into account all the expenses including maintenance, compliance, acquisition, etc. If the total cost seems high, then without a second thought opt outsource fleet management.
  1. How stressed is your staff? Are fleet management tasks distracting your employees from core business operations? Then, opting outsource fleet management can definitely help your business save time.
  1. How will outsourcing affect communication with employees and customers? If trusting external authorities for gaining control over your business operations is risky, think twice about outsourcing.

Key Takeaway – opt for best of both the worlds

A business with fleets may choose to outsource a part rather than all operations like servicing and maintenance.

Here, fleet management software proves to be of great help.

Irrespective of the size and type of fleets, fleet management GPS system optimizes the mapping, monitoring, and managing fleets.

And, all that in a cost saving approach. Besides, reducing the burden to administrate fleets, white label fleet management software also assures safety and compliance.

So, which option did you choose for your business with fleets, which approach suits the best? Would you like to tell us your experience? 

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