Centralising Your International Fleet: 5 Key Ingredients for Success
The success of an international fleet centralisation process is closely linked to five major factors. Getting them right is key to paving the way for improved efficiency of your fleet.
So you’ve made the decision to centralise your international fleet, perhaps following a merger/acquisition or autonomous growth (see my previous blog for insights into when and why international fleet management could be the right approach for you) – but how should you go about making the transition? And what are the key ingredients for success?
All centralisation projects are complex, since they are essentially change management processes. To ensure your international fleet programme is implemented smoothly, it is worth bearing these five key success factors in mind:
1) Clear strategic objectives
Often, the ultimate objective behind strategic business changes is to maximise profit and – especially following a merger/acquisition – to optimise and standardise processes and policies. Fleet management can contribute to those goals by improving cost control over the new fleet, identifying cost savings and fostering harmonisation. To enable you to measure the results, it is necessary to first review the as-is situation. This forms the basis for making decisions on concrete targets – such as limiting the vehicle choice or re-assessing budget allocation – in support of your strategic objectives.
2) Solid business case
The overall objectives are often not sufficiently specific to create the right level of buy-in from the stakeholders group. For example, they want to know which cost savings can be achieved when, and in which areas of the fleet. What will be the impact on the business, the drivers and today’s fleet management employees? What will be the CO2 reduction, and how many accidents can be avoided – both in general, and specifically for each market and business division? Therefore, a solid business case is necessary to win the support of the international decision-makers and the local organisations alike. Many companies underestimate the amount of time involved in this process, which can easily take up to six months depending on the level of centralisation required and the number of countries involved.
3) Project management
As an intensive, complex and time-consuming process, the implementation of an international fleet programme needs to be carefully managed, so it is essential to have the right project manager in place. The key prerequisites for a successful international project lead are relevant knowledge (general management/project management/time management skills, an understanding of fleet management and the vehicle lease industry), personal skills (a can-do attitude and the ability to influence and motivate others) and a focus on results.
Communication is an essential tool in the international fleet centralisation process, because the project will only yield optimum benefits if the new approach is truly embedded at all levels of the organisation, from the top down. Therefore, ideally, about 90% of the project lead’s time should be spent on communication. Various stakeholders are sometimes overlooked in the centralisation process, or confusion may arise due to the use of different terminology by different disciplines. Remember that the departments of Human Resources, Procurement, Finance, Health & Safety, Legal and Corporate Sustainability all have some involvement in fleet management. Equally important are the vehicle users – the drivers – as well as the local business field. Company cars are a very emotive issue, plus international fleet management takes place within a multidimensional and multicultural environment and is inherently affected by (internal) politics. It is therefore important for the project manager to be aware of the political and cultural framework and to understand key market differences to ensure buy-in from all stakeholders.
5) A step-by-step approach
If you are moving from a decentralised model, it can be wise to focus first on those elements that are easiest to centralise. Some ‘quick wins’ for standardisation and harmonisation – and hence cost savings – include: outsourcing operational lease under a sole or dual-supply model; bundling services such as insurance, accident management and fuel cards with the selected leasing and fleet management provider(s); restricting vehicle choice to 4-6 brands; centrally agreeing contract terms and mileages; centralising CO2 emission thresholds to benefit from tax incentives as well as lower fuel consumption (although this must be done at a regional rather than global level). For an example of an optimum step-by-step approach, it is advisable to follow the example available in the whitepaper that can be downloaded below.
The success of an international fleet centralisation process is closely linked to five major factors: clear objectives, a solid business case, capable project management, strong communication and a structured approach. Getting these key ingredients right will help you to persuade the senior decision-makers of the benefits of centralisation, create a clear mandate towards the local organisations from the top down, and gain the necessary support for change among all stakeholders – paving the way for improved efficiency of your fleet.