Bring us up to date on ARI’s most recent global initiatives.
More and more, our clients are headed to new and different parts of the globe, and we have sought to help them meet the new challenges this kind of expansion presents even as we continue to help them in their existing day-to-day fleet needs. As part of that, we acquired one of the UK’s premier fleet management companies, Fleet Support Group – now known as ARI Fleet UK – in December 2011. We have also expanded our global consulting capabilities, opening offices in Paris and most recently in Hong Kong, and worked to enhance our global alliances as well.
What countries do you operate in?
Together with our global partners we operate in almost every country in the world – and certainly in any country where our clients need to be. We have, for example, coverage throughout all of Latin America except for Surinam, Guyana, and French Guiana. We cover large swaths of Africa, most of Asia and, through multi-supplier partnerships and our global consulting organization, Europe.
Do you provide leasing as well as management services?
It depends on the region. In the UK we currently only offer a full range of fleet management services – no leasing. Outside of the UK, many our partners have leasing groups which are available to our customers and some have standalone fleet management companies, as well. Ultimately, however, our customers know that no matter where in the world they may be, we will work to ensure that their leasing and fleet management needs are met.
Let’s talk about technology with your partners. What are some of the things that stand out?
For many years we have cooperated with our partners on global reporting. That has expanded over time to taking global data from almost any vendor in order to satisfy our customers’ needs. With our new technology offerings, we are able to take this data from multiple vendors and help our customers make sense of it all so that they are able to make fast, meaningful, data-based decisions about their fleets.
We also cooperate in terms of sharing best in class practices in terms of data, systems and reporting with our partners so our customers can benefit. We recently had a director’s meeting – we have two a year – and our partners traveled from all over the world to our headquarters in New Jersey. Part of the time was spent reviewing our latest technology solutions and how we are using them to benefit our fleet clients.
We also look to share our perspective on industry trends and they do the same. We find that by collaborating and sharing our knowledge and understanding of the marketplace, we are able to learn from each other and our customers benefit as a result.
With your global alliance, can a U.S. client expect the same level of service and reporting that they would get if they were a U.S. based client with just vehicles in the U.S.?
The reality is that things are always different globally. In terms of global reporting, our clients can expect that we will consolidate all of the data that is available, whether the data is provided by our partners or from others, and we will give them a sound and reliable global view of their fleet.
When you begin to talk about the delivery of services, however, you will begin to see variations from market to market because the reality is the maturity and sophistication of the technology and the systems vary from market to market, not to mention the skill and capabilities of the people on the ground. There are similarities between countries. I think if you looked, for example, at Australia and South Africa, you would find tremendous similarity between those two markets. You may also see similarities between Brazil and Columbia. But, if you compare Indonesia and Uruguay you are not going to see the same level of reporting capabilities or delivery systems. That is just the state of the global market, and the best approach is to partner with a knowledgeable provider.
If you were talking to a U.S. based client who had just been assigned the task of managing a global fleet, what advice would you give them to get started?
You want to focus on visibility, transparency and control. When I say visibility, what I mean is this: you can’t manage what you don’t know. Where do you and your fleet stand today? How much are you spending to run your fleet? How much are you spending on things like acquisition, maintenance and fuel? Are you getting those things at the best cost possible? Could you be doing better?
In addition to understanding where you are, you need to understand where you would like to be. That’s transparency. If you are interested in driving down the total cost of ownership, it’s not enough to just have an accurate snapshot of where your fleet stands – you need to identify and target those areas where you can create efficiencies and drive down costs.
The final piece is control. You want to consider your goals in light of the local market conditions and what is available to you there, not necessarily what may be available to you in the U.S. or any other market you may be in. Understand where you are, understand what is “doable” and understand what the capacity of that specific market is to handle your needs. Interview the right people, ask the right questions and take the time to structure a program that will meet your needs and goals successfully.
Of course, once you have done that, you will want to be able to measure the results, which requires a good global reporting system. You will want a system that will capture the information; but, you also need to have good, sound advice to be able to figure out what is right for the market. Frequently, you can’t implement something if the local conditions aren’t right, and it is often well worth the effort to find a competent advisor to help you navigate the market and understand the results that your reporting system eventually provides once you enter the market. That way, you have the flexibility to adjust if you need to, and the expertise to help you understand how to do it.
What kind of support do you offer at ARI tech headquarters for the global client?
Our IT team provides support to our global clients in several different ways. First, from an operational perspective, they provide support and work together with our global clients’ vendors to ensure we are collecting all of our clients’ data and providing them with accurate reports. This team constantly collaborates with vendors, so they can also operate as efficiently as possible and together, as a team, we can provide the best in terms of customer service to our clients.
We also have a team managing the integration of all of that data, because it’s not enough to just collect the data – you need to provide clients with meaningful insight on the overall operation of their fleet. You need to integrate all of the data and offer the fleet manager a picture of their fleet that they can rely upon. I think one of the biggest things we have learned over time is that in the global arena, you have a lot of variation from country to country – you can have different systems, many of which have different capabilities and different levels of sophistication. Systems can also vary in how they deliver data. We had to be able to develop systems and processes that accounted for all of that and were still capable of delivering a comprehensive view for a fleet manager. Things you might think would be simple are not so simple, depending on what part of the world you are in. So we developed a much more integrated, systematic approach with regard to how we collect data and we have a whole team that oversees that process, from collecting the data, to checking it, and then integrating it into actionable information for our customers.
In addition to all of that, we have a separate global fleet administration group that handles international fleet management support. This group offers support to our clients with regard to oversight and control over their global fleet operations. Depending on what country they are operating in, we help them or work with one of our partners to meet their operational needs.
What trends are you seeing in the industry with respect to global?
I think growth is a very real trend, particularly in Asia and the Far East. Historically, the global economy has The gone through phases. Consider the Industrial Revolution in Europe, which occurred many, many years ago. Eventually, industrialization supported the evolution of a market economy, which subsequently evolved into the consumer society that we are familiar with in the West today.
That same evolution is starting to happen in China and India. The middle class in those countries is growing and they are beginning to demand many of the same goods and services as middle class Westerners. The economies of these countries are both still very, very active in terms of exports – but there is a growing domestic market in both countries as well. That growing demand domestically, particularly among the middle class, will lead to the desires for other things that we take for granted in the western nations. Things like pharmaceutical deliveries, food deliveries and other services and conveniences will drive businesses to grow their fleets, which will drive the need for fleet expertise. The same model holds true for Latin America and you can expect those markets to grow in the same way, even though growth has slowed slightly in the past year, especially in Brazil.
And, even though there has been talk recently of a slowdown in the Chinese and Indian markets, leading economists estimate that by 2015, China’s growth rate will be around 7.9 percent and India’s will be around 7 percent. As the middle class continues to grow in each of these markets, and the demand for consumer goods increases, I predict you will see an increased need for fleets, fleet maintenance, and general fleet expertise. And, global fleet professionals will be challenged to meet the needs of these markets – which may be different in unusual and complex ways when compared to the markets we have been operating in. We will have to find new and different ways to meet the needs of these new markets, so we can support our colleagues who may be there and support the businesses that are seeking to meet the growing demand of the empowered consumer.
You talk about Asia, what about Eastern Europe? Is that a mature market?
I think the Eastern European market still has a long way to go in terms of growth. If you talk to any of our European colleagues they will acknowledge that while there has been tremendous growth in terms of sophistication, Eastern Europe is simply not to the level of Western Europe yet. The Eastern European market is still lacking in terms of certain services that Western Europeans or Americans take for granted. That market has expanded dramatically, however, and I think it will grow over time.
And what about Africa?
I think Africa is still lagging behind the other regions and countries we have discussed. You have a mixed bag in Africa. On the one hand, you have South Africa, which has a fairly healthy economy, even with the recent difficulties they’ve experienced related to the labor market. To the north, I think there is tremendous potential all the way up to the Mediterranean. Botswana is seeing tremendous growth as of late. Over time, I think the African market will grow like we have seen many of the other developing markets grow and develop, but the market is not there now. It is certainly not near the level that Latin America or Asia is in terms of growth.
In addition to Africa, I think the Middle East has potential and presents an interesting challenge. Right now, there is on-going instability in that region, which is an indication that those markets could go either way at this point. But, if the Middle East starts to stabilize, there is a lot of capital there so there is always the potential that that region could present opportunities for our industry in the future.
If I am a new fleet manager and I have a global fleet how should I be evaluating fleet management companies? What should I be looking for?
A fleet manager new to the global marketplace should evaluate the available fleet management partners on a number of factors. First, what are their reporting capabilities? Are they comprehensive? Will they be able to provide you with the data you need to be able to have a transparent view of your fleet operations? You want a provider that is open to talking about their capabilities and their systems, so you can truly evaluate if they will be able to meet your needs and expectations. You also want to consider how they serve the market. Will they have the breadth and depth of experience you need to ensure that you will be able to control your fleet operations and be able to respond to changes in the marketplace or in your business? A new global fleet manager should find a partner who has the systems, knowledge and experience that will allow them to have a comprehensive, transparent view of their fleet and have the capability to help you control operations so you can get the most value from your investment.
It is also important for a new global fleet manager to keep an open mind. Culturally, you can’t expect other markets to be similar to the North American market. So, a fleet manager facing the challenge of managing a global fleet for the first time would be well served to let go of any preconceptions they may have and go into it with an open mind. For example, the way business is done in North America is not exactly the way it is done in Europe – both markets are very interesting, but I had to keep an open mind as I was learning the European market, because there were differences between the two and I had to open to the opportunities that were available in the European market, even if they were not the same kinds of opportunities I was familiar with. Taking on a global fleet is really a chance to learn and gain a better understanding of how things may be done in other areas of the world. Be curious and ask a lot of questions. More often than not, people are happy to share their knowledge and happy to help people who want to learn. Reach out to as many people as you can, ask questions and seek out knowledge.
The other thing a new global fleet manager should do is to work on developing relationships with people in the market you are looking to target. Don’t go in with the expectation that just because you have been empowered to do something that you are going to be able to get it done. I am a strong advocate of talking with people face to face, because I think ultimately success in any market comes down to relationships. Reach out to all of the stakeholders, reach out to potential customers, understand their challenges and listen to their concerns. By doing this – by visiting the market you are looking to target and by talking to the people you hope to develop into customers – you will gain more insight and understanding than you would by doing anything else. And I think you will find you will have a far better chance at a successful outcome as a result.
What are some of the most common cultural misconceptions that you would say that North Americans have?
There are a couple of things – among many – I think that they struggle with. Americans are used to an economy where, for the most part, new vehicles are abundant. If you want to purchase a certain make and model, you are likely to have little trouble doing that normally. But, in some other countries supply is not as abundant. In places like Argentina, you can wait nine months to a year – in Venezuela you can wait a lot longer. Our perceptions on how the market works, particularly with regard to things like the supply chain, are very different than the reality in many other markets.
Obviously the structure of leasing in many other markets is different. We are used to a fairly transparent product that allows for an easier comparison of one offer versus another. This is not the case in many markets. Comparisons can therefore be far more complex.
Taxation impacts on the value of leasing can also vary significantly country by country. Understanding leasing versus buying outside of our home market can consequently be a challenge. In North America, culturally, a vehicle is seen as a tool to help support a business function for the most part (with some exceptions) – it isn’t a compensation issue. In a lot of other parts of the world, a vehicle is considered one part of a larger compensation package and is a necessary and effective one, depending on that country’s taxation structure.
Also in North America, pricing for services is basically “a la carte” and are bundled or unbundled as desired by the customer. That is not the case in every part of the globe. Frequently you are offered a product bundled with all services and you cannot unbundle the services. Understanding and getting to the different drivers of TCO is very difficult – if not impossible – in these cases.
Finally, local rules, which are often very different from what an American may be used to, can be mystifying. For example, in Turkey, you cannot get a fuel card through a fleet management company – by law, you must get a fuel card from a different company. And in Korea, you are not able to lease certain kinds of alternative fuel vehicles due to laws protecting one industry from another. Different parts of the globe have different nuances and you need to be aware you will run into these when you decide to go into the global marketplace.
BIO
Rob Hill is the Director of Global Sales and Consultation for ARI. In that role, he leads the ARI Global Consulting team with practices in Asia, Europe and the Americas. He also maintains and evolves ARI’s global partnerships with leaders in Africa, Asia, Australia, Europe and Latin America, and oversees ARI’s placement of vehicles in emerging markets. He has a BA in Accounting from the University of Washington and an MBA from Thunderbird School of Global Management. He has been with ARI since October 1996.