Buying criteria and guidance:
CAN-based telematics for the Off-Highway industry

In today's era of digitalization, companies are increasingly embracing telematics as a crucial component of their digital transformation journey.

However, for many organizations, integrating telematics into their core business operations or expanding into new product lines and services requires significant time, effort, and resources. Additionally, with finite resources, companies may not always have the capability to develop all manufacturing technologies in-house.

Therefore, when considering the adoption of telematics as a catalyst for change in their business practices, organizations often face the decision of whether to build or buy solutions. Considering the diverse range of telematics applications, it is essential to consider various criteria when selecting vendors to ensure cost-effectiveness and alignment with organizational goals.

Total Cost of Ownership
Completeness of the telematics solution
Connectivity
Scope of the telematics coverage
Technical ownership
Bi-directional communication
End-to-End security
Edge computing
Flexibility
Transparency of Cost
Processing of data
Time-to-market
Mobile contract management
Service tool integration

Total Cost of Ownership

The total cost of ownership (TCO) is the purchase price of an asset plus the costs of operation. Assessing the total cost of ownership represents taking a bigger picture look at what the product is and its value over time.

When assessing different solution options in a purchasing decision, buyers should not just look at an item‘s short-term price, known as the purchase price (in this case, the hardware), but also at the long-term expenses (monthly recurring charges), which is the total cost of ownership. When evaluating comparable solutions, the one with the lower total cost of ownership is the better value in the long run.

Completeness of the telematics solution

When searching for telematics solutions, you will encounter various options, including:

Vendors specializing in hardware exclusively
Vendors focusing solely on cloud solutions
Vendors offering comprehensive telematics solutions
Vendors collaborating to provide complete telematics solutions

For organizations that choose to “Make” instead of “Buy”, the criteria below still apply but should instead be considered as requirements to help define the scope of work for internal projects.

Connectivity

The amount of use cases you can address with your connectivity solution is heavily dependent on the connectivity type. There are three types:

Physical “wired” connection
Local wireless connection via Wi-Fi or Bluetooth
Global wireless connection via the mobile network (suggested based on the least amount of limitations)

In theory, there is a 4th option that includes satellite connection, but given the high operational cost, this option only applies to certain edge cases.

Scope of the telematics coverage

By the scope of the telematics coverage, we refer to the involvement of additional entities. For example, an OEM may want to include dealers and machine owners in the telematics solution to include value-added features in their existing products. Each of these entities will have different use-cases that are important to them. A dealer, for instance, could be interested in fleet management capabilities and data that enable usage-based billing. On the other hand, a machine owner would focus more on insights that will improve machine efficiency.

Depending on the inclusion of new entities, organizations need to think about the permissions they will grant to these entities. In short, who can see/do what?

Some telematics vendors offer white label solutions that help organizations to structure these permissions.

Technical ownership

The purpose of a telematics solution is to log data constantly so that your organization can draw insights from it to change how you do business. But what happens when issues arise in a solution environment where different vendors source parts of the solution? Is the technical ownership clearly defined, and what role does your organization need to fulfill?

Additionally, think about how product changes are announced, implemented, and rolled out and who will do the orchestration.

If your organization expects everything to work as a black box, you are more likely to lean towards vendors that provide a complete telematics solution or vendors who collaborate to do so.

Bi-directional communication

Depending on your use cases, you either want one-way communication or bi-directional communication.

If you only want to log data to derive insights, one-way communication is enough. However, if you plan to change your machine's settings and perform configuration/firmware updates over the air, you will need bi-directional communication.

When assessing your use cases to determine your need, consider your future needs as well to avoid limitations further down the line.

End-to-End security

Depending on the type of communication, security becomes increasingly important. Regardless of one-way or bi-directional communication, you do not want any data being intercepted and read. Having the ability to change the parameters of your machine through bi-directional communication increases the need for security as safety is at risk when outsiders can read your data and send unauthorized signals to your machine.

Edge computing

“Edge computing” is a type of distributed architecture in which data processing occurs close to the source of data, i.e., at the “edge” of the system. This approach reduces the need to bounce data back and forth between the cloud and the device while maintaining consistent performance. While the monthly charges from cloud providers are based on high volumes of data, you should also consider the band-width of the cellular network. Edge computing requires less data to be transmitted, which can make a big difference when signal strengths are limited.

Flexibility

In today’s world, businesses must have the ability to adapt quickly. Therefore, the solutions you have in place must be able to support your current and future needs flexibly. As your organization matures in telematics, you will identify new use cases that can improve the way you do business. Your telematics solution should not be a limitation to your increasing need for further insights.

Transparency of Cost

When assessing the monthly recurring charges for cloud-based solutions, it is essential to have clarity for all costs. Some payment models are based on low monthly fixed costs but include additional fees for report generation. While such models appear cost-efficient at first, as your need for insights grows, such price models may end up being more expensive (and result in a higher total cost of ownership) than price models with a higher fixed fee per month.

Processing of data (API-First approach)

Today, both humans and machines are consuming data. Humans consume data through applications, often from many different devices – smartphones, laptops, tablets, and desktops. Many different types of devices mean many different screen sizes. Organizations must build apps that look good and work well across all devices. A powerful platform is crucial for this task, as it allows organizations to adopt an API-First approach.

APIs allow companies to break down capabilities into individual, autonomous services (aka microservices), ensuring a seamless user experience across all devices. Building applications based on microservices can ensure a good user experience (UX) on all devices. An API-first strategy allows organizations to build APIs that serve all forms, and applications can be developed and maintained efficiently for all devices, platforms, and operating systems.

Time-to-market

The increasing recognition of the need to exploit insights from modern telematics to gain a competitive advantage should trigger organizations to consider what time-to-market they allow. A telematics solution involving multiple vendors could mean more ramp-up time is required before machine data can be consumed to improve business processes.

Mobile contract management

When machines are located in different countries, mobile contract management becomes more challenging. You should ask if your organization is willing to spend this effort internally or considers this a service from your vendor.

Embedded SIM cards (eSIM) make mobile contract management a lot easier as you do not have to replace SIM-cards physically, and you can switch carriers faster through roaming features.

Note: Exchangeable SIM-cards pose challenges as these can be replaced by the machine owners and may cause “settings” issues, resulting in device communication failures.

Service tool integration

Companies that have existing service tools should consider service tool integration to avoid the complexity of adding new tools and the associated learning curve of using these tools.