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Construction Success Story: General Contractor Profits from “Telematics” Technology

by: Smith and Howard

July 19, 2016

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For the first time in years, a general contractor recently visited a construction equipment show. Exhibitors were promoting the benefits of new vehicles and equipment equipped with “telematics.” The word, they explained, refers to the transmission of information from machine parts to a central database.

Fleet and equipment owners, the exhibitors trumpeted, can use this data to save money on maintenance, repair and fuel costs. The contractor had to admit his company’s profitability was suffering because of project delays caused by mechanical breakdowns and high fuel costs. Still, skeptical of the exhibitors’ claims, the contractor asked his CPA about whether telematics might be worth his time and money.

Basic info

His CPA confirmed that, in a telematics system, sensors attached to key vehicle or equipment parts collect information about the asset’s usage and maintenance, and send it to a modem that’s also attached to the machine. The modem then transmits it to a database via a cellular or satellite network. The owner can then access the database to generate detailed reports about the equipment.

Basic telematics systems gather information about the location, running time and fuel usage of a compatible vehicle or piece of equipment. With location monitoring, the CPA explained, you can be alerted by phone or email whenever an asset moves outside a prescribed area. These alerts can prevent unauthorized equipment use or theft. Location data also can help service technicians find equipment needing field repairs.

Running time monitoring indicates when an engine is turned on and off. Besides alerting you to unauthorized use, the CPA pointed out, this data pinpoints the actual machine hours needed to complete a project and, thus, can help you craft better bids.

Advanced functions

More advanced telematics systems, the CPA continued, provide even more data points. For example, “fuel burn” info allows you to develop an oil-change regimen based on more than just operating hours. This can reduce repair costs and boost fuel efficiency.

Some systems build in “fault codes” that raise immediate red flags regarding certain problems. So you can pull a vehicle or piece of equipment out of service before a minor problem becomes a major breakdown.

Careful investment

Like any technology initiative, the CPA warned, investing in a telematics system should be approached carefully. The contractor could hurt his profitability further by overinvesting in a system that he and his staff weren’t prepared to fully use.

In this case, the contractor decided to retrofit some of his newer machines with telematics. As he and his managers become comfortable with this influx of information, they’ll consider shopping for new telematics-equipped vehicles and equipment.

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