Outsourcing Outsourcing

There is nothing new about outsourcing. It is not unique to the UK fleet market. For example, many staff canteens/ restaurants have been run by specialist catering businesses for many years. The principle of outsourcing leapt to prominence in the fleet market in the early 90's, with one or two fairly spectacular deals. But in reality, the term "outsourcing" refers to a philosophy which has been used by fleet managers for many different parts of the fleet operation, for a long time.

The concept is simple. You, the fleet operator customer, pass the complete responsibility for a set of management functions to an outside Agency which has expertise and resource to deal with it. The process can involve full risk transfer, for a fee which reflects all the probable costs; or a management-only basis, where the charges are based on the actual costs incurred by the outside Agency, plus their fee.

For vehicle acquisition, there are brokers: businesses who have lots of connections with dealerships for different brands, and who can provide a tailored service across many makes and models. There is a charge for this, either as a direct fee per vehicle or as a percentage of the discounted price.

Maintenance can be handled by external service providers, who are generally larger specialist businesses with many garage accounts across the country, technically-qualified maintenance controllers and large capacity IT resources. Such organisations can bring vehicle maintenance down to a fine art, dealing with many hundreds or thousands of cars and vans for their clients. Generally work is controlled by purchase orders, and invoices carefully checked for unnecessary work or charges.

Together with the purchasing muscle of a large number of transactions, this can bring down the costs of maintenance including replacement tyres, roadside breakdown services and other functions that are less frequently required - and which may therefore be outside the scope of the in-house manager of a smaller fleet.

Accident repairs can similarly be outsourced to specialist operators who focus on just this function - and have the time and resources to make this an efficient process.

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