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What is Telematics and How does it Work?

Maria Rosil
September 4, 2023
10 mins to read

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    Telematics has been of great help in a number of industries, especially fleet management and construction. Fleet management, in particular, benefits from the technology the most — telematics increases vehicle reliability, simplifies fleet management and makes driving safer. So what does telematics for fleet management imply? Let’s find out.

    A short overview on “What is telematics?” you can find in this video:

    What is a telematics system?

    Telematics combines two notions – telecommunications and informatics. It transmits computerized information over long distances. Telematics is also known as black box technology and is used for diverse purposes, like car concierge services or behavior-based car insurance. But it is mostly used in fleet management.

    Telematics allows asset and vehicle tracking and remote management. The technology helps gather information about the tracked asset and get an extensive overview of its behavior. Urban challenges are also resolved with the use of telematics — the rise of the smart city concept is maximizing the efficiency of urban infrastructure.

    Number of installed telematics units in the world

    What is a telematics device in a car?

    Telematics features in a car are represented by a GPS receiver that looks like a black box and is installed in a vehicle to collect telematics data. The receiver collects information on the location, performance, and condition of the car to store and further transmit it to other systems or devices via wireless networks. The information can then be visualized with software to analyze and enhance the car’s resource management.

    As a rule, telematics technology for vehicles combines cloud and custom IoT development services, along with hardware and software for GPS tracking, integrations with other systems, and real-time AI capabilities. The black box device is connected to an interface inside the vehicle to provide feedback on the driving, the vehicle’s performance, warnings, and various other notifications.

    How does telematics work?

    Telematics technology refers to the process of working with data, and it consists of 4 steps: data collection, storage and transmission, and fleet management software operations.

    How does telematics work, Euristiq

    1. Data collection

    A telematics system collects data via sensors, engine diagnostics, and GPS to share it further for fleet operators to be able to make decisions based on this data.

    2. Data storage

    The data from sensors, engine diagnostics and GPS trackers is sent to the telematics device in the vehicle. Then it is stored in the receiver and temporarily stays there until it is shared further.

    3. Data transmission

    From the black box in the vehicle, the data is transmitted to secure centralized servers via various networks. The system can rely on GPRS, satellite communication, or cellular networks like 4G. The receiving server processes the data to optimize it for further use. In detail, the data is interpreted and categorized for operations to access and use when it reaches fleet management software.

    4. Fleet management software

    From the centralized server, the optimized data reaches fleet management software. This way, data is visualized and translated into a user interface for fleet operators to understand easily. The software can be targeted to perform various actions depending on the team’s or company’s needs.

    Telematics example: video telematics system for smarter fleet management

    The challenge. The client, an insurance company from the UK, came to Euristiq with the idea of a solution that would accomplish three tasks: real-time fleet management, driver behavior monitoring and optimized vehicle insurance packages based on video telematics data.

    The solution. We created a fleet management solution that enables real-time fleet management with video telematics data. The features include driver behavior monitoring for safe transportation and optimized vehicle insurance packages to minimize insurance expenses.

    Video telematics data is collected, analyzed and displayed on a that shows all driving incidents over the last 24h. The interactive dashboard contains categories and filters that allow viewing historical data and driver statistics and scores. The data can be used to notify operators about issues with the vehicle’s condition and suggest improvements in the fleet’s performance. Using the platform, company administrators can send custom notifications to fleet drivers with warnings on safe driving behavior.

    Benefits of telematics use in fleet management

    Here are some of the benefits telematics brings to fleet management with real-life use cases.

    Benefits of using telematics system in fleet management, Euristiq

    Lower fuel expenses

    High fuel costs are a crucial issue in vehicle and fleet management, especially when it’s industry-based. However telematics technology helps reduce fuel consumption by tracking various metrics and acting accordingly. For example, planning routes more thoroughly, busy location bottleneck management, and poor vehicle condition alerting all help minimize the fuel used and pay less for it.

    Use case: Aggressive driving behavior or excessive idling significantly impacts fuel expenses. A telematics solution can give insights into fuel usage, and based on them, businesses can create driver training to incentivize good driving behavior.

    Better driver behavior and fleet safety

    Companies providing fleet operations need secure safety systems for proper fleet management. The technology, in turn, allows monitoring of the driver’s behavior and the vehicle’s issues to detect unsafe conditions. And when these are detectable, they can be addressed and dealt with in a short time. In addition, in case of an accident, emergency assistance can be directed to the location of the incident via a system’s notification.

    Use case: Telematics data can be used to generate reports on driver behavior to identify and correct poor driving habits as they are the cause of the majority of accidents.

    Improved insurance decisions

    With a telematics system, it is possible to receive accurate data on vehicle use. You basically get a full overview of each action the driver makes, like breaking and speed changes. So this data can be used for thorough driving analysis and more accurate damage estimates in case of an accident.

    Use case: Euristiq has helped create an accident monitoring platform that collects driver behavior data which can be further used to optimize vehicle insurance packages for an insurance company that has fleets.

    Easier fleet maintenance

    The telematics system monitors the condition of each vehicle and provides timely notifications in case something is off. This allows for catching issues early and solving them before the problem affects the established workflows and operating processes. Besides, the diagnostics help plan maintenance works, which provides a steady vehicle performance and a longer lifetime.

    Use case: Using telematics companies can minimize long-term equipment damage, plan the maintenance of heavy-wear parts like brakes and tires and extend it in time, or even to benchmark the health of your vehicles and compare it with similar equipment from other companies with similar equipment.

    Effective team communication

    Connecting drivers with each other or logistics operators used to be a difficult task that is now simple and automated with telematics technology. There is a smaller need for human involvement in the communication — all drivers and operators get real-time updates on their location or statuses.

    Use case: Geotab, a global provider of telematics devices, has enabled a system for fleet operators to receive real-time information on drivers and communicate with them through in-vehicle alerts. Drivers can be reminded in such way to buckle up or to slow down.

    Increased job satisfaction

    Telematics allows for detailed overviews of drivers’ schedules and routines. For example, a driver can easily check how much time they have left until the end of the shift as well as plan their job effectively, including training. Operators, in turn, can see this data too and plan accordingly. The transparency and access to this data add to the convenience and predictability, hence increasing the drivers’ and operators’ job satisfaction.

    Use case: Telematics platform can ensure drivers are safe on the road, monitor their rest time rules and alert them when they need a break. This reduces fines and violations and results in more satisfied drivers.

    How can my fleet use telematics systems?

    Telematics technology can be installed in a variety of vehicles. These include fleet cars, light and heavy trucks, busses, tractor units, dump and tow trucks, and assets like mowers or cranes. So regardless of your vehicle, you’ll most likely be able to enable it with a telematics device and make the most use of the technology.

    Among the capabilities you get for your fleet with a telematics system connected, there are lots of those based on your needs. Here are some capabilities you can get listed next.

    How I can use telematics system in the fleet management

    Vehicle diagnostics

    You can get regular reports on your email with an overview of your vehicle’s condition. Or you can set up the frequency of diagnostics and have the data shared with your dealer so that you schedule your maintenance on time. So you keep your vehicle running, prolong its lifetime and save money by preventing breakdowns.

    Emergency assistance

    In case your vehicle breaks down or you run out of fuel and you get stranded in the middle of nowhere, telematics come to the rescue. Because the system is equipped with GPS technology, you can use the SOS button to share your location and get help. Besides, the system logs the reason for your vehicle’s failure, so you will be able to use the data for easy issue detection in case of a breakdown.

    Instant accident notifications

    The system detects a collision in case it takes place and sends out an alert to emergency services so that they can come to help you. Because the telematics system uses an antenna with a strong signal, the message is delivered instantly and reliably. This means that you can be sure you’ll be taken care of in case of a severe accident.

    These are just some examples of how telematics can be of great help to your fleet. These and other capabilities are available at the touch of a button — you can use them in real-time to get an ultimate driving experience with maximum safety and vehicle productivity.

    The future of telematics and fleet tracking

    Telematics technology is evolving and is expected to reach a global value of $179 billion by 2028 (compared to $59 billion in 2020). Here are the future trends in the industry:

    But with the development of technology, a new concern occurs too — the protection of data shared. Since more data will be logged in more vehicles and shared with companies for vehicle management and insurance, innovative data privacy and protection solutions need to be found.

    As a fleet owner, if you are considering a telematics solution, contact Euristiq for assistance or book a consultation. Our experts can help you implement a fleet management software that will put collected telematics data to a good use. Save costs on maintenance, boost the performance and increase revenue of your fleet business.


    What is telematics?

    Telematics is a technology that gathers, transmits, and analyzes data from remote objects like vehicles or equipment by combining telecommunication and informatics. It allows remote monitoring, tracking, and management of these objects via the use of sensors, GPS, cellular networks, and data analysis.

    How does telematics work?

    Telematics works by collecting data from different sources like vehicle sensors, GPS systems, and onboard computers. Transmitted wirelessly, the data goes to a central platform. After analyzing it, the platform provides insights and real-time tracking.

    Can telematics help reduce fuel consumption?

    Telematics can reduce fuel consumption by optimizing routing and providing insights into driving behaviors. Better driving habits and routing boost fuel efficiency.

    Can telematics help with maintenance management?

    Telematics helps with maintenance management by collecting data on performance and detecting potential issues in real time. It facilitates proactive scheduling of maintenance, reducing downtime and optimizing costs.

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