….or – Everything you need to know if you are thinking about fleet cameras.
Benefits and ROI
So far we have looked at the cameras and their features and functions so now let’s look at how you get your money back. No, I don’t mean when they don’t work – I mean how will they provide you with cost savings that outweigh the outlay.
Before we move onto cost savings, we should briefly cover the purchase costs. In theory, it doesn’t matter if a system costs a million pounds if it saves you a million and one (providing you have a million in the budget to start with), but you do, of course, need to be aware of what the system outlay is going to be.
Let’s start at the lowest specification and as I said in the first article, you can buy cameras on the Internet for £10. However, a wise friend of mine always says, “Good, Cheap or Fast; choose any two”. This applies to everything in life and it has stood me in good stead – and t’s just as applicable to cameras.
You can have a Camera that is good and cheap, but it doesn’t perform well. You can have one that is Cheap and performs well, but the quality is rubbish and it will fall to bits, or you can have one that is good quality and performs well, but it won’t be cheap – so go ahead and work it out for yourself.
There is always reason for cheap. There is also often good justification for cheap or we wouldn’t be knee-deep in Poundbargainstretcherworldland’s. However, when you are buying a product that you are going to rely on to safeguard your company’s reputation, and possibly peoples lives, then you probably need to be looking at something with a good chance of working reliably throughout the period of your investment.
I am, therefore, going to discount the cheapo budget cameras and assume that, since you are investing your time reading this, you are willing to invest money in something of quality that is reliable and will have longevity. Therefore, I am also going to assume that you will buy from a reputable supplier who will provide a full service, including professional installation, setup, commissioning, testing and if required, a full service warranty.
This is probably a good time to set expectations and to say a word about installations.
I have been in the commercial telematics industry for nearly 20 years, which probably beats just about everyone else and I really can’t stress enough the need to avoid cheap installations.
Firstly, the supplier will setup and test the piece of equipment he is about to deliver, in this case a camera, for you. They will then get a certified installer in a vehicle, get him to drive to a site, check a vehicle before dismantling, dismantle it, usually the dashboard, professionally attach the camera wiring loom to the vehicle’s wiring loom, test everything, reassemble the vehicle, recheck everything is still working, complete all the paperwork and do all of this without invalidating your manufacturers warranty not to mention without leaving muddy footprints, bits of wire and cigarette ash in the cab before driving all the way back to base. This costs way more than the tenner most people expect to pay.
In fact, if anyone says they can do this, on a one-off basis for under £40 you should probably walk away. It’s possible that they are rolling some or all of the installation cost into the camera price, or that you are giving them a contract for multiple vehicles at the same site but be ready to pay between £50 and £90, depending on complexity of the equipment, for a quality service. That’s the first reason why Uncle Bob’s dream (see article one) is unattainable.
As for the cost of a camera, I can’t comment. I have seen cameras between £50 and £500 depending on quality, features and warranty and most are good. Just choose the one with the features you need (see article four), take up references and if you are happy with the provider then go for it.
If you are considering a remote access camera then you will also pay a monthly service charge. This will cover the cost of data (a video file can be a considerable size so, depending on how many videos are transferred and their resolution etc, the data tariff will vary). It will also cover the storage, mapping licences where relevant, customer support and warranty, so expect to pay between £10 and £30 per month for the service depending, again, on service quality and data usage. If you subscribe to a proactive monitoring service (see article three), you will pay even more.
As a word of warning, do check if there is a limit on the data tariff on these systems. Some providers limit the number of videos per month, which is fine, but just make sure you know what you are getting.
Return on Investment
The return on investment will depend on the functionality of the camera system you buy.
For stand-alone cameras the main ROI is evidentiary, i.e. it is there to provide evidence that proves or disproves liability after the event. Therefore, as soon as you are notified that one of your vehicles has been involved in an incident, you need to recover the video immediately.
This is because, as we have seen, a stand-alone camera records to an SD card which, when full, gets overwritten and sometimes auto-reformatted. Therefore if you need footage for a time when no accelerometer-initiated event was captured, you need to go to the vehicle and remove the card BEFORE it is overwritten. If you read the earlier articles you will know that this depends on many factors so work it out and know how many hours or days of footage is likely to remain on the camera and make sure that, if you get a call from someone accusing you of being in an unreported incident, you get that card quickly or at least call your driver and get him to remove it so that you have the evidence.
Providing that you have the footage from the camera and, of course, providing the information you need is there (remember it’s no good expecting a forward facing camera to show you what happened if your vehicle reversed into someone) then you will be able to validate the actual events leading up to the incident.
By doing this you can defend yourself against claims from third parties. I’m afraid that you have to do your own maths here. How many accidents do you have each year? How many results in claims? What are the costs of those claims? How many were unsubstantiated that you believe having camera footage would have allowed you to successfully defend? Calculate this and the answer is your main ROI.
As a by-product you would think that drivers would drive more carefully simply because they know there is a camera there and this is probably true. Therefore you should factor in some savings for reducing the number of accidents you will have and you can validate this over time. Add to this the fact that driving more carefully will reduce fuel usage and maintenance costs, together with protecting your company’s reputation and these are the benefits that a stand-alone camera will bring.
If you have a forward-thinking insurer/broker (or at least one who is keen to retain your business) then you may well be offered discounts simply for having cameras fitted. In reality, underwriters generally need to see proof of claims reduction (and, therefore, cost to them) over a period time, traditionally a little under three years, before offering premium reductions based on evidentiary risk reduction. However, speak to your insurer or look around for one who will look at reducing your premiums from the point you install the cameras, based on your responsible attitude to risk management. Some insurance brokers are even subsidising the cost of purchase of risk-reducing technology so it pays to ask around.
As far as ongoing safety improvements are concerned, however, be aware that simply having the camera in the vehicle isn’t enough. In our experience, drivers get used to them and forget they are there after a while (you would be amazed at some of the footage we see) so you must actively and demonstrably look at the videos so that drivers know that it is part of your safety process.
Remote Access Cameras.
These cameras can really provide huge return on investment if they are actively used as driver behaviour systems as a part of your business process. They will generate a higher ROI if they are used as a system that generates regular reports to manage drivers and debrief them on a regular basis.
In our experience we have seen them:
– Reduce accident frequency by up to 40% and
– Reduce the cost of accidents by a similar amount (because drivers drive more safely
– Provide fuel savings of up to 30% (this was high but we often see 10% plus
depending on the fleet type and use)
– Reduce wear and tear and so service and maintenance costs including tyres are
Of course, the benefit you will achieve is always based on how good (or bad) your fleet performed to start with so don’t assume that these ‘typical’ savings are achievable if you already have a well-managed, efficient team of drivers.
These potential savings are in addition to the Insurance based savings that are mentioned above to which these remote access cameras can add First Notification Of Loss (FNOL) which insurers are very keen on, so you should be able to start discussions about reducing your premiums further by using this type of system.
If you self insure, reducing claims is even more important, especially if you have a high volume of uncontested pay-outs that you can’t defend due to lack of evidence.
You should be able to fairly quickly put all of the above into your calculator and work out your ROI over the period of your investment and again, from experience, I’d be surprised if a system won’t pay for itself fairly quickly.
So, that’s just about everything covered now, I hope. Next time I’ll cover a simple maintenance regime for SD card based systems so that if you decide to go down that route, at least you will have a process to keep everything working smoothly.
PART SIX COMING SOON
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