Saturday, June 25, 2022

For Fleet and Transport Professionals

Defending your fleet budget

A major part of the job description in fleet management is to control budgets. For example, in a recent job post with a major contractor this is described as to: “Control costs to achieve company budget goals”. This is an obvious requirement After all fleet assets are a significant cost to any business, so it is vital that unnecessary expenditure is avoided and that those assets are protected.
 

Controlling costs is one of many pressures faced by fleet professionals, but it can lead to conflict with other departments in a way that, for example, organising the maintenance scheduling will not. This is often due to rising costs year on year, getting negative attention from the Finance Department and other competing parts of the business wanting their fair slice of the pie! Others in leadership roles may see any rising costs as a failure in the fleet department and this is why it is crucial that fleet is involved in budget discussions, to ensure that understanding is built around the value that the department brings to the overall objective of the business. A great deal of expenditure associated with a large, mixed operational fleet is dictated by ever increasing standards in safety and environmental standards and by legal compliance, so defending fleet budgets can be a daunting exercise in educating other departments.
Overall, the solution is to communicate between departments to build understanding. If the Fleet Manager is to expect clear understanding from Finance, it must work the other way around. No utility or large contractor exists to operate vehicles, it is a necessary part of the overall business. Also, utilities are unique in as much as unlike any other business, customers are encouraged to spend less money so the Fleet Manager must demonstrate a grasp of these factors if favour is to be won.
In accepting these pressures, the Fleet Manager can use that empathy to argue for the “correct” levels of investment that assist in driving down the pressure on other parts of the business. Systems and processes that require short term investment may provide long-term savings and enhancements to the company risk profile. This is especially true of asset management systems, where overall fleet efficiency is better managed, but those efficiencies can contribute hugely to corporate image and therefore customer retention. For example, reduced vehicle downtime resulting from sophisticated asset management systems will contribute to the speediest repairs to the infrastructure reducing customer frustration.
Once regular communication is established, there is an on-going opportunity to explore other opportunities that may involve an initial capital outlay, but savings overall. This may be working towards a lower emission fleet with obvious medium and long term savings and other benefits. Tracking and telematics suppliers will often claim percentage reductions in fuel use and some will offer trials to allow the Fleet Manager to build data and support the case for employing the system. There are few better ways to get a Finance Department on-side than raw figures!
In summary, “defending” the fleet department budget is a question of understanding the nature and priorities of the wider business, creating empathy and demonstrating how expenditure contributes positively to the business’s financial performance, corporate responsibility and corporate image. This is all the more vital, when businesses such as utilities operate with customers who do not have the choice of not buying the service.

Sponsored links

spot_img
spot_img

In the news

Sponsored links

Supplier Insights

FLEETS IN FOCUS

Legal Updates

Stay Connected

4,350FollowersFollow