Bring up GPS to a field service decision maker, and another 3-letter acronym is certain to follow in that conversation: ROI. It doesn’t make sense to invest in technology just to have some shiny new toys; there has to be a proven benefit before any manager with his or her office provides employees with technological devices that aren’t exactly inexpensive.

Electric Compass, as a “leader in GPS navigation and tracking products for enterprise mobile computing,” clearly has a vested interest in pumping up the value of GPS for obvious reasons. However, the numbers they recently reported were interesting and worthy of discussion.

Gas Savings

According to “research from a large digital map supplier,” GPS users saved an average of 12% on fuel. Here’s how Electric Compass calculated the money savings that would lead to for an average driver.

  • 400 miles traveled per week
  • 12 mpg per vehicle
  • $2.66/gallon for Diesel (9/17/09)
  • Yearly fuel cost savings per vehicle: $532

Time Savings

This time, according to “research by a major mobile computer maker, fleet operators reported an average savings of 54 minutes a day per field worker,” which Electric Compass rounded down to 45 minutes. Taking that into account, here’s where most of the savings come from in terms of GPS:

  • $26.00 hourly labor rate
  • $19.50 saved per day (using the 45 minutes of time saved benchmark)
  • $97.50 in labor costs saved per week
  • $4,875.00 saved per driver per year

Total Savings

Add up the gas savings ($532/yr) and money saved on labor ($4,875/yr), and GPS would save a field service company $5,407 per year. In fairness to Electric Compass, gas/diesel prices as low as $2.66/gallon don’t exist in the United States these days, and they did round down the amount of labor time saved from 54 minutes to 45.

But return is only one part of ROI. Depending on how much a GPS solution costs, ROI could change wildly. Since many smartphones come with free GPS navigation, ROI could conceivably be quite high. With other solutions (the cost of Electric Compass’ GPS offerings aren’t available on their website), the ROI could be less. Just another tough decision for field service managers to make, although with the savings GPS can bring, the tough decision isn’t whether or not to utilize location-based technology, but which solution they should choose.

Read more about GPS on The SmartVan