Digitisation going into overdrive?

The global smart fleet management market is estimated to increase from US$ 44,5 billion this year to US$ 82 billion by 2026 – at a compound annual growth rate of 13%. JACO DE KLERK takes a look at six myths that have to be busted.

Fleet safety has been a driving factor in the growth of the smart fleet market, according to the global market research store, ResearchAndMarkets.com. In its report “Global Smart Fleet Management Market (2021-2016)” it notes: “With the use of connected fleets, it is convenient to monitor real-time fleet data that can help in preventing cargo loss and deliver further insights about the cargo/vehicle.”

Another factor enabling the market’s predicted growth is the ability of smart fleet solutions to provide insights into predictive maintenance.

The report also highlights a number of key market segmentations. “[Segmented] by transport, the market is classified as roadways, marine, airways and railways. The roadways segment is estimated to hold the highest market share.”

By offering type, the market is classified as tracking, advanced driver-assistance systems (ADAS), optimisation, fuel cards, and automatic vehicle identification. “The ADAS segment is estimated to hold the highest market share.”

By connectivity, the market is classified as short range and long range. “Of the two, the short-range segment is estimated to hold the highest market share.

“By solution, the market is classified as vehicle tracking and fleet optimisation. Of the two, the fleet optimisation segment is estimated to hold the highest market share.”

And by geography, North America is projected to lead the market.

It won’t all be unobstructed progress, however. “The high costs of smart fleet management systems followed by data security concerns are restraining the market growth.”

But why should you care about the ebb and flow of the smart fleet management market? In its piece “A Fact Check on Six Myths About Digitisation”, MAN Truck & Bus examines what digital transformation means for businesses and how they can adequately react to the challenges. It offers a fact check that dispels six common myths about digitisation.

Digitisation primarily affects IT: Incorrect. The collation and evaluation of data is certainly an important condition for digital transformation. The programming of software also plays a significant part. And these are the skills that IT specialists possess. Yet the input from other departments is just as important as their skills.

Sales, after-sales and product management are in the best position to evaluate the innovative functionality that customers really need and want. The know-how from departments like development, engineering and production is required to integrate digital applications into vehicle technologies and production processes.

Quality assurance also plays an important role in ensuring vehicle safety, for example. The commercial vehicle sector needs to consider digitisation as an interdisciplinary challenge that involves all areas of a company.

Every company has to completely reinvent itself: This is only partly correct. Vehicle manufacturers will continue to produce vehicles. Transport companies will still convey goods from A to B. Public transport companies will continue to ensure the mobility of passengers. To that extent, many stakeholders in the commercial vehicle sector will not have to fully rebuild their business model.

But they will have to analyse it thoroughly and constantly adapt it as necessary, because digitisation has the huge potential to make transport and passenger transport safer, more efficient and more eco-friendly. It promotes developments like autonomous driving, digital logistics, digital fleet management and vehicle sharing. Trends like these are fundamentally changing the sector. Those who fail to grasp their opportunity could eventually disappear from the market.

Digitisation is just the introduction of new technology: This is far from being true. Above all, digital transformation requires a new way of thinking. It requires the preparedness and curiosity to try out new working models and to step away from “business as usual”.

This requires companies to consider: What are the needs of our customers? How can we better help them to achieve their objectives? And how must we organise ourselves to be able to do that?

Digital technologies supply the tools to advance the transformation. But, primarily, a digital mindset is required to use them sensibly. Those who combine new technology with innovative ideas will be successful in digitisation. There is also a need for new legal conditions relating to traffic, which are required to enable us to exploit digital technologies. Germany has, for instance, just become the first country in the world to pass a law enabling the driverless deployment of automated trucks and buses.

All processes have to be digitised at once: That is not quite true: digitisation is not a quick-fix undertaking, but a long-term process. Companies should set priorities in terms of their products and work processes for which digital solutions are most urgent and then introduce these preferentially. The decisive factor here is how your customer’s business and the company’s own activities can best be simplified.

Digitisation is occurring at different levels in the commercial vehicle sector: an increasing number of intelligent assistance systems within a vehicle are helping drivers. More and more digital services are becoming available to organise maintenance, workshop service and fleet management. There is also growth in the networking of a vehicle with its infrastructure. This is the prerequisite for autonomous driving, which is likely to be the most significant future development in transport. Digital transformation in the commercial vehicle sector is therefore continuing to progress.

Digitisation destroys jobs: This myth persists, but is not valid. Firstly, it is true that digitisation results in work processes previously performed manually by people now being automated. This does lead to the disappearance of jobs, particularly in the area of unskilled and mundane activities.

Secondly, however, digitisation opens up new tasks and entirely new vocational fields. Studies by organisations like Bitcom, Deloitte and the Institut der Deutschen Wirtschaft conclude that digital transformation even results in increased demand for personnel. They suggest that heavily digitised companies engage more additional employees than companies in which the internet plays a less relevant part.

Digitisation is therefore a driver in relation to the labour market. Above all, it is well-trained employees who are in demand, but people from other backgrounds also have a golden opportunity if they can continue their digital education and transfer experience from their previous job to new tasks.

The coronavirus has sharply accelerated digitisation: This myth is often repeated, but it is only valid in sectors where digitisation has been sluggish so far. Many professionals involved in administration, for example, first became familiar with remote working from home and the widespread use of digital communication tools during the lockdown. In the commercial vehicle sector, by contrast, digitisation has played a significant part for some time, both in the vehicles and in its work processes.

Digitisation projects in this sector were delayed by the coronavirus pandemic. For example, some were postponed owing to contact restrictions in field trials relating to automated driving and digitisation in container terminals. These trials have not been cancelled, though; they are rather being advanced in a manner that is adapted to the current conditions.

In summary, there is no doubt that digitisation is profoundly changing the economy, as new business models are prevailing in the market and threatening established revenue streams. But, while many companies in the commercial vehicle sector are also facing uncertainty, they should embrace the change and ignore the myths, as digitisation is going into overdrive …