Ready for Telematics to Transform Your Business?

By Guest Author  |  Posted 2014-10-09 Email Print this article Print
telematics transforms business

Telematics helps firms that can get value from monitoring, predicting and facilitating consumer behavior in real time via geospatial or motion-oriented data.

Getting Past the Roadblocks

Telematics is fostering all sorts of revenue-growing or expense-saving activities—and it’s just taking off. Research firm SBD has forecast that 600 million cars will be fitted with embedded telematics by 2025 ("2025 Every Car Connected: Forecasting the Growth and Opportunity"), a more than tenfold increase from today. And that doesn’t account for the anticipated growth of app-based, consumer-friendly uses via the ever increasing population of smartphones.

While the opportunities associated with telematics are many, so are the potential challenges. In fact, telematics-driven growth and profitability are encountering their share of roadblocks.

Privacy concerns include one noteworthy obstacle, as well as downstream impacts that shift the consumer’s value equation to a less favorable position. Beyond early adopters, will large numbers of consumers allow insurers to monitor their driving behavior when there's a potential for price increases and not just discounts?

Will millions of consumers be comfortable allowing retail marketers to monitor their activity out in the world to entice them to enter their stores? Is some level of privacy invasion worth a 40 percent discount at the mall—or not? What about 30 percent? 20 percent? 10 percent? 5 percent? Or will consumers fear that data collected may be sold or stolen or used against them?

Operational issues should also be considered before a company goes all-in on telematics. The company should ensure that it is operationally fit for telematics initiatives in order to provide return on investment. Operational considerations include the following:

· Network and data processing capacity to facilitate accurate, reliable and timely data collection and transmission via mobile apps or black box devices;

· Adequacy of data management, warehousing systems, storage capacity and advanced analytics capabilities;

· Capabilities to provide customer service support, especially for value-added, telematics-driven consumer applications;

· Sufficient privacy and security policies and measures to reassure both consumers and regulators.

As the telematics era moves out of its infancy, the technology’s long-term implications are largely unknown. While telematics has a lot of moving parts and support functions, the return on investment from the technology can be significant if some reasonable business predictions prove accurate.

Telematics is disrupting industry paradigms and offering possibilities for new business models. As telematics kicks into high gear, businesses and consumers should be ready to adapt to and capitalize on these rapid shifts.

John Lucker is the global advanced analytics & modeling market leader for Deloitte Analytics. Follow him on Twitter (@JohnLucker) or email him at

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