28 May When should I consider outsourcing my company car fleet?

Does size matter?

In truth, the size of the fleet that you have and the spread across the world, only affects the decision to outsource in that, if it’s that insignificant, that it causes no draw on resources and is very easily managed, then you have no real need to address this.

If however, like many businesses, you find that Car Fleet is a constant distraction, and that the myriad of local legislation and practices is drawing an inordinate amount of focus away from your core business, then you might consider the available relief through outsourcing, even on a small number of vehicles across a handful of markets, a very worthwhile strategy.

Generally speaking, fleet size is an important feature, but not a pivotal one in this decision. Many larger fleets might retain some ‘dedicated’ internal fleet resource, tasked with managing the local supply chain and providing a service as local coordinator to the car driving community. In others, and most typically in the more contemporary ‘downsized’ fleets, this may have long since been outsourced to the local lessor and policy management and indeed supplier management may now be distributed to non-dedicated headcount within the local business.

In either case, Outsourcing will save you headcount and reduce the local burden on the business, whilst delivering professional control, so, in the vast majority of cases, size doesn’t matter!

What if I have different funding types?

It is not uncommon, particularly in growing businesses, to find different parts of the business in different territories, using funding and operating models that suit the local business, that become increasingly difficult to manage, particularly as core functions become centralized.

This can be a serious barrier to the effective management of the fleet as most businesses don’t possess the right systems and expertise to view and manage this effectively. Outsourcing brings everything into the same frame. Accounting for the core elements in the most appropriate way to provide full transparency of spend.

Ultimately, this allows you to make ‘no compromise’ decisions, based on your financial, commercial and operational goals, and not only driven by the need to simplify – albeit that can be a worthy goal in it’s own right.

Can outsourcing take over everything?

What outsourcing can achieve, is to remove all but ‘post room’ activities from your local businesses, distributing necessary tasks between the local suppliers and the outsource partner. For example, in most cases the local lessor will be able to liaise with drivers on vehicle choice and selection, however, they shouldn’t be signing off their own orders, so the ‘governance’ on those orders would sit with the outsource provider. Likewise, the outsource partner will provide an escalation point for supplier service issues

Best practice dictates that what the lessors can do, they can be engaged to do, what they can’t, the outsource partner will resource.

What about timing?

To a large extent it is irrelevant at what point in your fleet’s maturity or replacement cycles you choose to outsource the management to a partner, although if the idea is to deliver a positive return on investment through adopting this model, the sooner you call to action, the better for your business.

From a tactical point of view, the predicted activity spikes around vehicle replacements might be a good focus point for your business; If you’re going to get the most out of your outsource partner and avoid some heavy lifting work internally, going live before a large vehicle replacement period would certainly provide some early wins for your business.

Contact Graham Rees if you think it’s time to outsource your company car fleet.