Analyzing the Benefits of GPS Technology within the Commercial Environment

Written by Michael Grosinger and Chris Hackett

gps whitepaper img1Originally developed in the 1970’s Global Positioning Satellite (GPS) technology was not widely adopted until the 1990’s for a variety of reasons. Since the increase in adoption, large segments of the commercial economy have taken advantage of the benefits of GPS. GPS is currently deployed in a wide array of applications including Cell Phones and in vehicle navigation systems. This technology allows individuals and/or vehicles to be tracked to a level of accuracy within 4 meters. It has been reported by the GPS Innovation Alliance that the economic benefits of using GPS within a commercial environment are estimated to be over $67.6 billion per year in the United States. (GPS Innovation Alliance).

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One of the key benefits of GPS technology is the capability to track assets, which can include individuals or physical assets. The importance of knowing an individual’s whereabouts at any point in time can be extremely valuable to a business. Businesses are responsible for the well-being of their employees and the utilization of GPS technology provides employers with specific data on the location of their employees. The Federal Motor Carrier Safety Administration (FMCSA) reports that in 2012 there we’re approximately 371,000 crashes from large trucks and buses, with 3,702 fatalities. In about 30% of those cases, the driver of the commercial vehicle was found to be at fault. These numbers are alarming, and it makes us question the steps that fleet management companies can take in ensuring the safety of its drivers, along with others that are alongside the road with them. By leveraging the advancements in technology, the safety measures that can be taken will be significantly enhanced. (FMCSA).

Combining the basic functionality of GPS with a multitude of off the shelf software solutions allows employers to not only track the location of their employees but also determine the speed at which their vehicles were traveling as well as information on starting and stopping. This enhanced level of information allows employers to monitor their workforce to ensure that they are in compliance with local and national safety laws. Capturing this driver data offers the opportunity for the employers to counsel their workforce on appropriate driving behavior. This not only presents an opportunity for reducing fines associated with traffic violations but also helps to increase overall driver safety. Safer drivers will result in fewer accidents, lower insurance rates and decreased liability claims. (LiveViewGPS).

Cost Savings

The use of GPS technology also provides benefits in the area of cost savings and reductions. Employers implementing a GPS based solution have data on specific actions taken by their drivers. While tracking their fleets, companies can set up exception reports to determine idle time for each of the vehicles within the fleet. This provides management with data on the fleet as a whole and allows them to develop metrics around acceptable idle times. Employees who are exceeding these thresholds can be coached on how to minimize idling time and thereby reduce cost. This reduction in idle time will also help to reduce the amount of fuel the vehicles are burning, and will therefore provide an environmental benefit. Since GPS technology is readily available in cell phones and on vehicles, the implementation of a GPS solution is fairly inexpensive.

Potential unauthorized personal use of company vehicles can also drive up fuel and maintenance costs as well as create a potential non-business related liability. GPS tracking can help manage the efficient use of all company vehicle assets. Parameters can be set for the following:

  • Off hours movement report – identifies when and where vehicles are being used during weekends, after work or during non-official work hours.
  • Odd hours alerts identify unauthorized vehicle usage as it occurs so that immediate action can be taken
  • Geofencing capability allows for setting specific parameters around where a vehicle can be operated. Vehicles violating this policy can be immediately contacted to determine the cause of the violation and take corrective action. Once again this level of monitoring can reduce fuel and maintenance costs and reduce potential liabilities.

The use of GPS tracking technology can save significant amounts of money on commercial vehicle insurance. There are several factors that contribute to these savings. Insurance companies see theft of vehicles as a significant risk, but the installation of GPS solutions within commercial vehicles improves the odds of recovering those vehicles. The use of technologies such as geofencing, along with real-time alerts within a fleet management system could assist in recovering those vehicles as well. When drivers are monitored, it is proven that safer driving occurs, and insurance companies are attracted to safe drivers, as it reduces their risk. Additionally, many GPS technologies can track maintenance schedules for trucks, and when trucks abide by a proper maintenance schedule, insurance companies reward those customers.

Driver Productivity

Implementation of a GPS based software solution can assist in increasing driver productivity. Utilizing GPS for the development of the most efficient route to customer locations will minimize driver time in route as well as the amount of fuel consumed by the fleet. Drivers who spend less time traveling to assignments will have increased bandwidth to perform additional tasks and therefore generate more revenue per driver for the company. Increased driver productivity across the entire company will result in a cumulative increase towards the overall productivity of the company fleet. In addition, knowing where drivers are during the course of the day allows management to reallocate resources based on driver/worker location. This not only minimizes travel time from job to job but also gets the closest worker to the client location in the least amount of time providing for a superior customer experience.

Another way to bring driver productivity up is to engage the drivers in the implementation process of the GPS tracking systems. This will allow them to more comprehensively understand how the system operates. As drivers familiarize themselves with the technology, they will realize the importance of it, as they will begin to rely on it for work verifications, data, and roadside assistance, amongst other features. It is important for managers to stress that the system is not a tool for micro-managing its drivers, it simply is a tool that will contribute positive elements to their performance, and it will also help business growth. Since GPS can track various forms of driver data, it can be portrayed to the drivers as a way to monitor their good habits, which can lead to a rewards program for the drivers that will keep them motivated. When the system is implemented and presented with the proper approach, dramatic increases in productivity will occur. (Verizon).

Software Solutions

In the initial wide-spread adoption of GPS, systems were often hardwired into vehicles. As technology evolved, and as the smartphone revolution saturated the consumer mobile space, customers are now finding it highly simplistic to install GPS on their handsets, or radio systems. In addition, the explosion of applications supporting GPS functionality has continued to expand.

There are a number of off the shelf software solutions available to assist companies in the implementation of a GPS based tracking solution. The implementation of these software packages is fairly simplistic, with the solutions providers offering technical support for training and implementation. As a result, companies implementing these solutions don’t need to have internal Information Technology organizations. These software solutions can be deployed in fleets as small as 2 users or across a large enterprise organization. The benefit to the smaller companies is that they have access to the same quality tools that their much larger competitors are deploying in an attempt to develop a competitive advantage.

The user experience within GPS solutions will continue to improve, as technology continues to advance. This will encourage many more companies to implement solutions of this nature to their respective businesses, bringing enriched business processes and efficiencies, while improving the bottom lines.

Cost Benefit

The cost of deployment of off the shelf GPS solutions has dramatically decreased over the past several years. The prevalence of the technology combined with competitive market forces has helped to significantly reduce the costs of these solutions. Furthermore, the positive return-on-investment associated with these solutions (through increased employee productivity, reduced fleet costs and overall customer satisfaction) alters the economic equation for the level of increased adoption. Many GPS based software solutions that are deployed today embrace cloud technology, thereby further reducing the operational complexities and costs associated with deploying a GPS based solution. These turn-key solutions allow small businesses to swiftly and easily deploy GPS based solutions that will provide them much greater management control over the assets within their organizations.

Deployment of an off the shelf GPS solution is a way for companies to increase worker productivity, fleet utilization and customer satisfaction. At the same time these solutions allow for the reduction of operating costs as well as diminished potential liabilities. The development of a cost benefit analysis in this environment is far more simplistic than it was several years ago when there were limited options available on the solutions side of the GPS equation.

Works Cited

Driscoll, Ryan. “The Top 5 Most Common Objections to GPS Tracking.” Insight Source. GPS Insight, 4 Aug. 2014. Web. 14 Nov. 2014. <>.

Pham, Nam D. “The Economic Benefits of Commercial GPS Use in the U.S. and The Costs of Potential Disruption.” GPS Innovation Alliance (2011). Print.

“2014 Pocket Guide to Large Truck and Bus Statistics.” Federal Motor Carrier Safety Administration, Office of Analysis, Research, and Technology (2014). Print.

“GPS Tracking Saves Money on Commercial Auto Insurance.” LiveViewGPS. 29 Aug. 2013. Web. 14 Nov. 2014. <>.

“Improve Fleet Performance by Changing Driver Behavior.” Verizon, 17 Sept. 2014. Web. 14 Nov. 2014. <>.