The Ultimate Guide to Fleet Digitalization

A growing number of fleet managers are doing away with traditional methods and embracing digitalization.

And it’s not hard to see why.

The fleet management software market size is booming, projected to grow from 27.55 billion in 2024 to a whopping 116.56 billion by 2032.

If you’re curious about this shift in modern fleet management, stick around.

We’ll give you a complete guide to fleet digitalization, covering everything from the types of systems available to the various technologies used.

We’ll also explore what to look for in a digitalization solution to ensure it fits your specific needs.

Benefits of Digitalizing Your Fleet

With the rapid market growth of fleet management software, it’s clear that digitalization offers some significant advantages driving these changes.

One of the biggest advantages is increased efficiency—something desperately needed in a sector often relying on outdated methods.

In fact, Gartner’s data reveals that most organizations still use manual methods or third-party software that lacks key features for effective fleet management.

Illustration: GoCodes / Data: Gartner

With one-third of organizations using spreadsheets in their fleet operations, they’re losing essential benefits like real-time fleet tracking and planning more efficient travel routes.

But, tracking vehicles is just one aspect of fleet digitalization.

As Javier Escalante, CEO of B’Smart, an Internet of Things (IoT) fleet digitalization company, explains, modern systems offer much more.

Illustration: GoCodes / Quote: LinkedIn

Instead of relying only on location trackers, modern solutions can pull data from various sources, such as cameras, IoT systems, fuel sensors, warehouse data, and more.

And, by leveraging powerful technologies like AI (artificial intelligence), ML (machine learning), and predictive analysis, these systems help monitor and optimize things like fuel consumption, driver behavior, and vehicle maintenance.

In short, digitalizing your fleet offers a range of benefits, from improved efficiency and real-time tracking to data-driven insights for optimizing every aspect of your fleet management operations.

Challenges to Overcome

Now, while the advantages of fleet digitalization are impressive, there are some hurdles to overcome.

First, switching from manual processes to digital solutions can be expensive.

You need to consider software licenses, hardware costs, buying trackers and sensors, and securing your digital systems.

In fact, according to Webfleet’s data, the cost of implementing and maintaining these systems is the biggest challenge, with almost half of respondents citing it as a major concern.

Illustration: GoCodes / Data: Webfleet

The second biggest challenge is finding ways to integrate the new processes and systems with existing operations.

After all, a big change in how things work can cause resistance among staff, making them less likely to adopt new systems and methods.

Even if you address this resistance with proper training and communication, you still need to ensure these digital technologies are used safely and securely.

As Richard Hipkiss, managing director at Fleet Operations, a fleet management consultancy, explains, cybersecurity is paramount here.

Illustration: GoCodes / Quote: Fleet Operations

With robust security measures, you protect sensitive information and personal driver data, maintaining compliance and avoiding legal or reputational issues.

Overall, acknowledging and proactively addressing these challenges can ensure a smoother and more secure transition to a digital fleet.

Types of Fleet Digitalization Solutions

Fleet digitalization can be implemented through different software systems, depending on your business needs, cost considerations, and feature requirements.

The main things we need to look at are how the system is deployed and how customized it is for your specific needs.

On-Premise vs. Cloud-Based Fleet Management

The first decision you need to make is whether you’ll use an on-premises solution or a cloud-based one.

As the name suggests, an on-premise system is installed locally on your company’s servers, while cloud solutions are hosted on the vendor’s servers and accessed via the Internet.

Now, if we look at the data, we can see that there is an overwhelming preference for cloud-based fleet management, with these solutions holding the majority of the market share.

Illustration: GoCodes / Data: GMInsights

This dominance is mainly due to lower setup costs, the subscription-based model, automatic updates, and greater scalability.

However, it’s still worth comparing the two types of systems for a more in-depth look at their upsides and downsides.

Aspect	On-Premise	Cloud-Based
Cost	Higher upfront costs for hardware and software	Lower upfront costs, subscription-based pricing
Scalability	Limited by physical infrastructure	Easily scalable to meet growing needs
Maintenance	Requires in-house IT team for maintenance and updates	Maintenance and updates handled by the vendor
Accessibility	Limited to on-site access	Accessible from anywhere with an internet connection
Security	Full control over data security	Relies on vendor’s security measures
Customization	Highly customizable to specific needs	Customization options may be limited by the vendor

For example, the level of physical control you have with an on-premises solution is higher, as the solution is physically installed at your location.

However, on-premise solutions typically involve higher upfront costs and often lack the mobility provided by cloud-based fleet management systems.

Overall, the best choice depends on your specific needs and priorities.

Remember to consider your budget, technical expertise, and specific requirements when making your decision.

Third-Party Software vs. Custom Solutions

An arguably more important decision is whether to use off-the-shelf, third-party fleet management software or invest in building a custom solution.

Let’s compare the two.

Source: GoCodes

Naturally, a third-party system is the better choice if you have time constraints or a tight budget.

While you might not get every specific feature your organization needs, the much faster implementation time of a developed and polished solution often makes up for it.

Plus, working with a reputable vendor usually means regular updates, system maintenance, and customer support—things much harder to manage with a custom solution.

However, this doesn’t mean a custom system is out of the question.

The benefits of a truly tailored system and having full control over new features, security, and updates are significant.

But you need to keep some cost factors in mind.

Source: GoCodes

The more complex you want your system to be, the higher the cost and development time, regardless of whether you use an in-house team or outsource.

Additionally, even when the system is created, you still need to factor in the long-term cost of data storage and servers.

So, for many, the third-party option will usually be preferable, although the decision should ultimately be based on your own needs and goals.

Key Technologies Powering Fleet Digitalization

Next, we need to explain the two types of fleet digitalization technologies you can expect to encounter.

The first type is the data sources for fleet management systems, while the other is the algorithms and AI functionalities that make use of all this data.

Let’s explore them further.

Telematics and IoT Sensors

The explosion of fleet digitalization wouldn’t be possible without the wealth of data provided by trackers and sensors.

One key technology is telematics, which uses GPS and onboard diagnostics to track vehicle location, speed, and other performance data—transmitting it in real-time to a central system.

Let’s look at some of the capabilities of fleet telematics.

Source: GoCodes

As you can see, these seemingly simple trackers unlock many efficiencies.

They range from basic fleet tracking to monitoring driver speeding, optimizing routes, and even enabling systems to trigger maintenance alerts based on performance data.

This means you can identify and address issues proactively, reducing downtime and improving overall fleet efficiency.

We should also discuss Internet of Things (IoT) sensors, which are small, connected devices that collect and transmit data about various aspects of the vehicle and its environment.

There are many types of IoT sensors available for fleet management.

For example, some IoT sensors are designed specifically for cargo, providing real-time video tracking and temperature monitoring to protect sensitive goods.

Another example is the following ORBCOMM fuel sensor.

Source: ORBCOMM

This sensor allows fleet managers to monitor fuel levels constantly, with instant low-fuel alerts, fuel efficiency optimization, and even maintenance alerts if a vehicle consumes excessive fuel.

While these are just a few examples, they hopefully illustrate the power of telematics and IoT sensors.

AI and Predictive Analytics

Artificial intelligence and predictive analytics are transforming industries across the board.

If you think fleet management is an exception, you’d be wrong.

In fact, according to Webfleet’s 2024 Fleet digitization report, one-third of 1,800 global fleet decision-makers say that AI and ML will have the biggest impact on their operations in the coming years.

Illustration: GoCodes / Data: Webfleet

Going into specifics, 34% of surveyed professionals already use AI-enabled dashcams, and another 36% plan to implement them within the next five years.

These dashcams work by securely tracking drivers and outside traffic with a camera. AI then monitors factors like driver focus, vehicle speed, and the behavior of other drivers.

Source: Motive

If a potential safety issue is detected, the AI triggers real-time alerts, protecting the driver and others on the road. And this is just the beginning.

Consider UPS’s ORION route optimization algorithm.

Illustration: GoCodes / Source: Best Practice

This system, while initially difficult to deploy, now saves UPS time and money daily.

It predicts the most efficient routes, learning from historical data and capturing over 200 real-time telematics metrics from trucks.

Plus, with features like Dynamic Routing, this AI-driven solution adapts to changing conditions like traffic conditions, road closures, and delivery priorities—all in real-time.

This example shows that AI and predictive analytics technologies are already widely used in fleet management.

As they continue to evolve, they promise even greater savings and efficiencies.

Essential Features of Fleet Digitalization Tools

So far, we’ve talked about a number of fleet digitalization tool types and technologies.

Maybe you’ve become interested in these systems and are considering digitalizing your fleet.

Well, it’s worth ensuring that any tools you end up using have some essential capabilities, with key ones being the following:

• Real-time vehicle tracking
• Automated maintenance alerts
• Fuel management & optimization
• Driver performance monitoring
• Regulatory compliance features

Whether you choose a third-party or custom solution, these features maximize the benefits of tracking and AI technologies.

In fact, even simple GPS trackers can sometimes provide more than enough data for a robust system to offer real-time tracking and insights into fuel consumption, driver behavior, and more.

A great example is a tool like Tourmo, an AI system that aggregates metrics from telematics, video, fuel, maintenance, and other fleet-related data and derives insights from them.

For instance, it can monitor eco-efficient practices, such as tracking your fleet’s carbon footprint and fuel efficiency, and generate regulatory reports you can use to ensure compliance.

Source: Tourmo

Or, consider a solution like GoCodes.

GoCodes is an asset-tracking system used for everything from heavy equipment and fleet vehicles to small tools.

A big plus is that GoCodes offers our very own trackers, including real-time GPS trackers.

These trackers can collect metrics such as fleet location, vehicle speed, engine hours, acceleration, hard braking, and more.

Our cloud-based system then accesses all this data, providing useful insights, such as monitoring vehicle location, speeding events, and other driver behavior.

Source: GoCodes

So, instead of relying on third-party trackers and different systems, you can consolidate and use a single provider for everything.

As you can see, there are a lot of powerful fleet digitalization platforms on the market.

But whatever system you choose, make sure it provides all the essential features to be the most effective for your operations.

Conclusion

In this article, we explored the growing trend of fleet digitalization, covering its benefits and implementation challenges.

We looked at the different kinds of fleet management tools available, the tracking technologies they use, and how AI and predictive analytics are driving better fleet performance.

Finally, we even included a few great examples of solutions you can try out.

By now, you should have a better idea of what fleet digitalization is and how it can change your fleet operations.

With this knowledge, you can start looking at your current processes, find areas to improve, and explore the digital tools that fit your business goals.