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Telematics – what is it and how does it work?

Telematics systems have become an essential management tool for small and large fleet operations alike. But, what is it, how exactly does it work, and how can it benefit your operation? Let’s find out!

A brief history of telematics

Over 30 years ago, South Africa was faced with increasing vehicle theft and other vehicle-related crimes such as hijacking. Most of the early telematics systems were based on simple radio frequency (RF) technology that requires national proprietary RF networks and did not make use of the cellular networks.

One could hardly refer to these early systems as Vehicle Telematics as it served a simple, singular but important purpose… the recovery of stolen vehicles. The game changer occurred when the cellular networks started to roll out ubiquitous mobile data networks (GSM) and global positioning satellite (GPS) technology became more accessible.

This combination of GSM and GPS technologies, coupled with the introduction of various other sensors such as accelerometers to measure harsh events and detect potential crashes, has opened the door for some really useful vehicle telematics services.

Today, vehicle telematics technology is already quite entrenched in all the segments in the SA vehicle market, largely driven by the safety and security benefits of the technology.

What comprises a typical telematics system?

A telematics device is a highly intelligent computer consisting of a GPS tracking unit and various other on-board sensors that work together to monitor and report on the overall status and activities of the vehicle, including speed, idling time, fuel usage and more.

Looking at the various components required, we see that a typical Vehicle Telematic System can be divided into three groups:

1. The vehicle-based units (VBUs)

VBUs come in many forms. In essence, they all include a GPS module for positioning, a data modem, and sensors such as accelerometers to measure harsh events and ignition inputs to detect the start and end of trips. More advanced VBU, especially those used in larger fleets may include a multitude of additional sensors.

2. The data communication network

A reliable and pervasive real-time data network is an essential requirement for an effective telematics system. In South Africa, the most commonly used data networks are:

  • GSM Networks: Traditionally GPRS or 2G was the preferred protocol, but this is rapidly being replaced with 4G/LTE technology and possibly even 5G.
  • Small Packet RF Data Networks such as the Sigfox and LoRa networks

3. The backend system

A typical vehicle telematics backend consists of the following:

  • Data Gateways
    Data Gateways are the systems that connects to the data networks, whether GSM or any other data network. It establishes a secure connection between the vehicle device and the backend.
  • Data Storage
    Data Storage is fast becoming the most essential component of the backend. With the advent of cloud-based services such as Microsoft Azure and Amazon AWS, it is now feasible to create ‘Big Data’ infrastructure to ensure that all real-time as well as historical data can be stored.
  • Software Applications
    Software Applications are needed to present the data in a usable format. In a fleet environment, these software applications usually address a specific business need or a hybrid of needs including as Fleet Management Software, Route and Journey Management Software, and Business Intelligence (BI) and Dashboards.

Telematics installation

A major consideration during an installation of a telematics device is to ensure that it does not invalidate the vehicle warranty or interfere with any of the vehicle systems.

The good news is that most modern devices only require access to a permanently ‘on’ supply from the vehicle battery, and most car manufacturers already provide such access for aftermarket accessories.

Is telematics expensive?

It depends on the level of functionality required. Small or Medium-sized Enterprises (SME) that simply want a GPS tracking solution with basic fleet management functionality, can get it at an affordable price

For larger fleets that require a fully integrated fleet management solution with route planning, advanced driver management, dashcams and more – the upfront costs can be expensive, but it also provides a much bigger return on investment.

White transporter driving inside the city

Can my small or medium-sized fleet benefit from telematics?

In this tough economic climate with record-high fuel prices coupled with our stretched economy, consumers are continuously looking at ways to reduce vehicle operating costs.

  • Fuel Costs
    Vehicle telematics allows you to record, score and manage driver behaviour, including how they accelerate, slow down and other speeding habits. Adopting a smoother driving style and managing speed, you can save considerable fuel costs.
  • Insurance Costs
    Usage Based Insurance (UBI) that uses vehicle telematics to determine how much your vehicle drives and structures insurance premiums accordingly, have been around for over a decade. In addition, they may also reward you on your improved driving behaviour.

    With crime on the increase, Stolen Vehicle Recovery (SVR) remains a very high priority in South Africa and vehicle telematics with its pinpoint location accuracy, greatly enhances the probability of recovering a stolen vehicle, which usually results in insurance premium discounts.
  • Repairs and Maintenance Costs
    Many motor car manufacturers are now fitting vehicle telematics to all their vehicles. Amongst the many other benefits described above, the data from these systems are also used to assist the vehicle owner to schedule preventative maintenance that will save expensive repairs in the long run.

Other benefits of telematics

  • Improve fleet efficiency and customer satisfaction
    Through better route planning, drivers can avoid areas with heavy traffic to keep them on schedule. In instances where a traffic jam is unavoidable, customers can be informed earlier and their expectations suitably managed.
  • Set geofencing boundaries and keep drivers on schedule
    By creating geofence zones on the map, a telematics system can help you monitor when drivers depart or arrive a specific location, or even when they enter unauthorised areas. Doing this, you can more easily keep drivers on schedule, and ensure they stay on route.
  • Track trailers and assets
    Telematics is not just for your vehicles. Special battery-powered tracking solutions can be installed in trailers or other assets – helping to locate and recover these assets, if stolen.
  • Protect temperature-sensitive cargo
    Advanced telematics systems allow the addition of temperature sensors. When transporting cargo that needs to stay at a specific temperature, you’ll be notified if it changes, allowing you to act accordingly.

The future of telematics

One of the areas of rapid growth in vehicle telematics is in the field of video analytics. With the rapid advances in technology, especially edge-based Artificial Intelligence (AI), we are seeing more and more use of AI-driven video analytics that can monitor the drivers in real time for fatigue or distractions such as cell phone usage. It currently has an increasing adoption rate in larger commercial fleets, but we do believe that over time more SMEs will also start adopting this technology.

The telematics penetration in SA is already showing acceptance of the usefulness of this technology. We predict that it will probably go exponentially higher, especially with the increasing momentum from the car manufacturers to pre-fit such technology. This will provide many opportunities for all to continue to innovate on the services that we can provide.

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