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What is Telematics and how does it work?

 What is meant by the term vehicle telematics, where did it originate, and how does it work? Join us as we answer these and other questions about telematics and the essential management tool it has become for many small and large fleet operations.

The history of telematics

Three decades ago, South Africa was faced with the challenge of increasing vehicle theft and other vehicle-related crimes such as hijacking. Factory-fitted car security systems were quite rudimentary, and this created a gap for after-market technology and service providers to step in to provide solutions that will enable the tracking and recovery of stolen vehicles. Most of the early systems were based on simple radio frequency (RF) technology that requires national proprietary RF networks and did not make use of the cellular networks. These basic devices were predominantly dormant and only activated once a vehicle was reported stolen. Recovery then took place using direction finding antennas deployed by ground or air recovery teams. Although the technology was quite crude, it was effective and was actively embraced by the insurance industry through premium discounts or mandated fitments to high-risk vehicles.

One could hardly refer to these early systems as Vehicle Telematics as it served a simple, singular but important purpose… the recovery of stolen vehicles. The game changer occurred when the cellular networks started to roll out ubiquitous mobile data networks (GSM). Almost at the same time, we saw global positioning satellite (GPS) technology becoming more accessible and affordable in consumer devices. This combination of GSM and GPS technologies, coupled with the introduction of various other sensors such as accelerometers to measure harsh events and detect potential crashes, has opened the door for some really useful vehicle telematics services. These services are rendered to the various stakeholders involved in the ownership and operations of vehicles, including not only the end-user, but also the insurance companies, banks, and more recently even the automotive manufacturers or OEMs.

Vehicle telematics technology is already quite entrenched in all the segments in the SA vehicle market, largely driven by the safety and security benefits of the technology. For years, large fleet operators have been deriving the commercial benefits of these systems such as route planning, fuel management, driver management and managing the efficient use of the fleet. Today, Small and Medium-sized Enterprises (SMEs) are fast adopting such technology for easy fleet visibility, increased efficiencies and cost savings.

What is telematics?

A telematics device is a highly intelligent computer consisting of a GPS tracking unit and various other on-board sensors that work together to monitor and report on the overall status and activities of the vehicle, including speed, idling time, fuel usage and more.

What does the typical telematics system comprise of and how does it work?

The purpose of a vehicle telematics system is to measure various parameters relating to the operation of a vehicle and then to transmit this data to a backend for analysis or use in application such as fleet management systems.

The new buzzword in the industry is ‘Internet of Things or IoT’ and this term usually applies to systems that allow ‘machines’ to communicate with other ‘machines’ or humans. Although the term IoT only recently came about, Vehicle Telematics can be considered as the early forerunner of this.

Looking at the various components required, we see that a typical Vehicle Telematic System can be divided into three groups:

  1. The vehicle-based units (VBUs)

VBUs come in many forms. In essence, they all comprise of a GPS module for positioning, a data modem, and sensors & sensor inputs such as accelerometers to measure harsh events and ignition inputs to detect start and end of trips.

More advanced VBU, especially those used in larger fleets may include a multitude of additional sensors such as:

  • Digital inputs to measure things like door sensors and other switches
  • Analog inputs to measure speed and RPM sensors
  • Pulse inputs to measure fuel flow monitoring pulses
  • Tag inputs to detect driver identification tags
  • Outputs to activate switches or relays such as ignition immobilisation
  1. The data communication network

For an effective telematic system, a reliable and pervasive real-time data network is an essential requirement. In South Africa, the most commonly used data networks are:

  • GSM Networks: Traditionally GPRS or 2G was the preferred protocol, but this is rapidly being replaced with 4G/LTE technology and possibly even 5G for high data volume applications in future.
  • Small Packet RF Data Networks such as the Sigfox and LoRa networks: These networks are very cost effective, but limited in the amount of data that can be transmitted.

The most advanced systems also measure vehicle data directly from vehicle systems such as the Engine Control Units (ECUs) and other vehicle sensors such as throttle controllers.

Although strictly not a VBU or black box, some basic telematic applications have been developed for Smart Phones. In these cases, the sensors in the Smart Phone is used to determine harsh events as well as the GPS in the phone for positioning. Smart Phone telematics have limited applications in any serious telematics application and currently limited to the use by insurance companies to do risk assessment on car insurance policy holders.

  1. The backend system

A typical vehicle telematics backend consists of the following:

  • Data Gateways
    Data Gateways are the systems that connects to the data networks, whether GSM or any other data network. It establishes a secure connection between the vehicle device and the backend. Data privacy and data security is essential in any reputable telematics service and data packets are thus usually encrypted. The Gateway thus will decrypt such messages and it also decodes the data protocol being used into a usable format.
  • Data Storage
    Data Storage is fast becoming the most essential component of the backend. The amount of data being ingested is massive and is in excess of 200 million data records per day for a typical large telematic system provider. Up to recently, it was not cost-effective to store such large volumes of data but with the advent of cloud-based services such as Microsoft Azure and Amazon AWS, it is now feasible to create ‘Big Data’ infrastructure to ensure that all real-time as well as historical data can be stored. This then allows telematic service providers to provide useful business insights into the operation of a fleet based on the huge amount of historical data. The truism that ‘data is the new oil’ is indeed true for vehicle telematics.
  • Software Applications
    Software Applications are needed to present the data in a usable format but it also incorporates and manages the business rules applicable to the specific software application. In a fleet environment, these software applications usually address a specific business need or a hybrid of needs and the most common of these are:

Telematics vs. GPS tracking

As explained above, a GPS unit is simply one part of a telematics system. While the GPS unit is responsible for tracking the location of the vehicle using satellite technology, the telematics devices will transmit that location data to the cloud in real time, together with various other sensor details.

Installing a telematics device

One of the major considerations during an installation of a telematics device is to ensure that it does not invalidate the vehicle warranty or interfere with any of the vehicle systems. In the early generation of devices, this was a problem as it was required to cut and splice into the vehicle harnesses, especially to find the ignition wire.

The good news is that most modern devices are ‘two-wire’ installations that only require access to a permanently ‘on’ supply from the vehicle battery, and most car manufacturers provide such access for aftermarket accessories. The telematics system then monitors the car battery voltage and some systems have intelligence to then ‘self-learn’ the alternator behaviour within the first few trips following the initial installation. Based on this ‘learned’ behaviour, the telematics device can then sense whether the engine is running or not and even sense if you left your lights on while the vehicle is parked.

For more advanced installation where vehicle bus data such as CAN data is required, the manufacturers of large trucks provide an FMS (Fleet Management System) interface where such vehicle CAN bus data can be safely harvested. Similarly, such data on smaller vehicles and passenger cars can be obtained by plugging into the OBD II (On-board diagnostics) port of the vehicle. Usually a ‘Y-harness’ is added if the OBD port is used so that repair centres can still plug in their diagnostic machines without having to unplug the telematics device.

For Stolen Vehicle Recovery services to be effective, it is also important that the device must be installed in an obscure position in the vehicle to ensure that the thieves cannot disable it easily.

Is telematics expensive?

It depends on the level of functionality required. Small or Medium-sized Enterprises (SME) that simply want a GPS tracking solution with basic fleet management functionality, can get it at an affordable price.

For larger fleets that require a fully integrated fleet management solution with route planning, advanced driver management, dashcams and more – the upfront costs can be expensive, but it also provides a much bigger return on investment.

Is telematics and fleet tracking expensive

How can my Small or Medium-sized Enterprise (SME) benefit from telematics?

In this tough economic climate with record-high fuel prices coupled with our stretched economy, consumers are continuously looking at ways to reduce vehicle operating costs. Fuel, insurance and repairs & maintenance are probably the three most significant cost drivers in owning a vehicle.

  • Fuel Costs: Vehicle telematics allows you to record, score and manage driver behaviour, including how they accelerate, slow down and other speeding habits. Adopting a smoother driving style and managing speed, you can save considerable fuel costs. Most vehicle telematics systems allow you to set your own goals and thresholds that will trigger alerts in real time if exceeded.
  • Insurance Costs: Usage Based Insurance (UBI) that uses vehicle telematics to determine how much your vehicle drives and structures insurance premiums accordingly, have been around for over a decade. The ‘work from home’ realities that the Covid lockdowns and movement restrictions enforced on us, made consumers more aware that they are possibly paying for insurance that is no longer relevant to the way in which they are using their vehicles. More and more insurance companies are now offering UBI products. In addition, they may also reward you on your improved driving behaviour. These Pay How You Drive (PHYD) schemes have already gained great traction in Europe and the USA and several SA insurers are now offering the same. With crime on the increase, Stolen Vehicle Recovery (SVR) remains a very high priority in South Africa and vehicle telematics with its pinpoint location accuracy, greatly enhances the probability of recovering a stolen vehicle. Many insurance companies offer significant insurance premium discounts and even guaranteed SVR services, provided such an advanced vehicle telematics system is fitted.
  • Repairs and Maintenance Costs: One of the sensors in a vehicle telematics system is used to determine the detection and severity of a possible crash or accident. This data is sent to the insurer that enables them to render immediate roadside assistance, not only with the facilitation of a speedy claims settling process, but also to ensure that your vehicle correctly towed to an approved and cost-effective repair facility. Probably more important, monitoring and managing your driving behaviour will result in less accidents and claims.

Many motor car manufacturers are now fitting vehicle telematics to all their vehicles. Amongst the many other benefits described above, the data from these systems are also used to assist the vehicle owner to schedule preventative maintenance that will save expensive repairs in the long run. An exciting new development that is still in its infancy, but is already in use in specialised cases, is the concept of ‘on condition’ maintenance schedules. In other words, your service intervals are not fixed, but based on the way you are using your vehicle as measured by the vehicle telematics system. This saves the owners that drive their vehicles responsibly significant amounts of money by preventing unnecessary maintenance.

Other ways telematics can benefit you

  • Improve fleet efficiency and customer satisfaction
    Through better route planning, drivers can avoid areas with heavy traffic to keep them on schedule. In instances where a traffic jam is unavoidable, customers can be informed earlier and their expectations suitably managed.
  • Set geofencing boundaries and keep drivers on schedule
    By creating geofence zones on the map, a telematics system can help you monitor when drivers depart or arrive a specific location, or even when they enter unauthorised areas. Doing this, you can more easily keep drivers on schedule, and ensure they stay on route.
  • Track trailers and assets
    Telematics is not just for your vehicles. Special battery-powered tracking solutions can be installed in trailers or other assets – helping to locate and recover these assets, if stolen.
  • Protect temperature-sensitive cargo
    Advanced telematics systems allow the addition of temperature sensors. When transporting cargo that needs to stay at a specific temperature, you’ll be notified if it changes, allowing you to act accordingly.
  • Resolve service disputes
    Data is power. With service times and delivery routes & locations all recorded, a telematics system can assist you in resolving or clearing up service disputes with customers.
  • Improve maintenance schedules
    Using alerts and reminders, a telematics solution can help you stay on top of service schedules – helping you ensure that vehicles are serviced at the correct intervals.
  • Optimise vehicle lifecycles
    A telematics system can help you better optimise vehicle lifecycles by tracking each one’s age and identifying the best time to replace it to ensure a high resale value.

There is probably no single silver bullet that will keep all the rising vehicle operating costs fully in check. As a relatively affordable investment, having your car or light delivery van fitted with a telematics system and making sure you put it to good use, should and will yield a healthy return on your investment. Apart from the savings benefits, you will also get all the other useful features that such systems provide such as peace of mind for your fleet or better customer services for your small business fleet.

The future of telematics

The future of telematics

One of the areas of rapid growth in vehicle telematics is in the field of video analytics. Dashcams have been around for a while and has largely remained a novelty and not seriously considered as a fleet management tool. With the rapid advances in technology, especially edge-based Artificial Intelligence (AI), we are seeing more and more use of AI-driven video analytics that can monitor the drivers in real time for fatigue or distractions such as cell phone usage. It currently has an increasing adoption rate in larger commercial fleets, but we do believe that over time more SMEs and private drivers will also start adopting this technology or variations thereof to manage their drivers, or in the case of private vehicle owners to manage their own safety and that of their loved ones. It is a known fact that driver fatigue or distraction are large contributors to accidents.

Electric vehicles, or EVs, are also becoming a rapid reality worldwide. We are often jokingly asked if this will be the case for SA too, given our current power generation challenges. It is interesting to note that several large fleet operators have done studies and have determined that they can erect their own solar-based charging infrastructure along their frequently used routes and that the fuel saving payback can be achieved within a few years. Private vehicle owners in SA may have to wait a bit longer, but there’s no doubt that EVs are going to play a significant role in the future… even in SA! From a telematics perspective, the requirements remain similar, as theft and hijacking will also apply to these vehicles. In fact, all the benefits and value of telematics to the other stakeholders we described earlier will still be relevant.

And just as a last word on the future of telematics technology… We all know that technology giants are investing huge amounts into the development of autonomously driven vehicles. Very advanced, accurate and reliable vehicle telematics will be required as an essential component of such systems. Not only will these vehicles have the need to have reliable data communication with central control systems, it will also be required that vehicle-to-vehicle data links will have to be in place. Such inter-vehicle communication will enable automated accident-avoidance systems to be deployed… and perhaps this is where we should start?

Vehicle telematics has evolved into a technology that creates as symbiotic value proposition for all the stakeholders in the vehicle ownership and fleet management value chain. The telematics penetration in SA is already showing acceptance of the usefulness of this technology. We predict that it will probably go exponentially higher, especially with the increasing momentum from the car manufacturers to pre-fit such technology. This will provide many opportunities for all to continue to innovate on the services that we can provide to our respective customers, thereby creating the means to manage fleets more efficiently whilst also creating a safer and more affordable driving experience for all.

  • Telematics: The technology of sending, receiving, and storing information using telecommunication devices to control remote objects. Telematics is a combination of two words: telecommunications and informatics. It is often defined as “the blending of computers and wireless telecommunications technologies, with the goal of efficiently conveying information over vast networks to improve a variety of services.”
  • Radio Frequency (RF): A radio frequency (RF) signal refers to a wireless electromagnetic signal used as a form of communication, if one is discussing wireless electronics. Radio waves are a form of electromagnetic radiation with identified radio frequencies that range from 3kHz to 300GHz.
  • Mobile Data Networks (GSM): GSM stands for Global System for Mobile Communications. It’s a standard that specifies how 2G (second generation) cellular networks operate.
  • Global Positioning Satellite (GPS): The Global Positioning System (GPS), is a satellite-based radio navigation system owned by the United States government and operated by the United States Space Force. It is one of the global navigation satellite systems (GNSS) that provides geolocation and time information to a GPS receiver anywhere on or near the Earth where there is an unobstructed line of sight to four or more GPS satellites.
  • Internet of Things (IoT): The Internet of Things, or IoT, refers to the billions of physical devices around the world that are now connected to the internet, all collecting and sharing data.
  • Original Equipment Manufacturer (OEM): An original equipment manufacturer traditionally is defined as a company whose goods are used as components in the products of another company, which then sells the finished item to users.
  • Engine Control Unit (ECU): An electronic control unit, also known as an electronic control module (ECM), is often referred to as the ‘brain’ of the engine. It is essentially a computer, a switching system and power management system in a very small case that controls one or more of the electrical systems or subsystems in a car or other motor vehicle.
  • Controller Area Network (CAN): Controller Area Network is a serial network technology that was originally designed for the automotive industry, especially for European cars. The Controller Area Network – CAN bus is a message-based protocol designed to allow the Electronic Control Units (ECUs) found in today’s automobiles, as well as other devices, to communicate with each other in a reliable, priority-driven fashion.
  • On-board Diagnostic (OBD): On-board diagnostics is a term referring to a vehicle’s self-diagnostic and reporting capability. OBD systems give the vehicle owner or repair technician access to the status of the various vehicle sub-systems.
  • Proprietary RF Protocols: In telecommunications, a proprietary protocol is a communications protocol owned by a single organisation or individual.
  • GSM Networks: GSM stands for Global System for Mobile Communications. It’s a standard that specifies how 2G (second generation) cellular networks operate.
  • 4G/LTE Technology: 4G LTE is short for “fourth generation long-term evolution.” It’s actually two terms combined. First, 4G represents the fourth generation of mobile technology, the next big advancement after 3G. And “long-term evolution,” or “LTE,” is industry jargon used to describe the particular type of 4G that delivers the fastest mobile internet experience. Long-Term Evolution (LTE) is a standard for wireless broadband communication for mobile devices and data terminals, based on the GSM/EDGE and UMTS/HSPA standards. It improves on those standards’ capacity and speed by using a different radio interface and core network improvements.
  • Small Packed RF Data Networks: A network packet is a basic unit of data that’s grouped together and transferred over a computer network, or a Radio frequency (RF) network.
  • 5G Technology: 5G is the fifth generation of cellular technology. It is designed to increase speed, reduce latency, and improve flexibility of wireless services.
  • Message Queuing Telemetry Transport (MQTT): MQTT is an OASIS standard messaging protocol for the Internet of Things (IoT). It is designed as an extremely lightweight publish/subscribe messaging transport that is ideal for connecting remote devices with a small code footprint and minimal network bandwidth.
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