Sunday 19th May 2019

Construction equipment telematics on the road to ubiquity

Published on January 17th, 2019

The overall outlook for the construction equipment telematics market is positive, especially for OEM solutions. As construction equipment manufacturers today largely include both the telematics hardware and software access for free with the machine purchase for many models, there is no question that the installed base of CE telematics will grow at a high pace in the coming years.

Given the strive for efficiency improvements in the highly competitive construction sector, the adoption rate among end users is also expected to increase and drive a greater degree of actual usage of the CE telematics systems on the market, says Johan Fagerberg, CEO of Berg Insight.

Examples of construction equipment types

The aftermarket for construction equipment telematics is expected to shrink as the CE manufacturers continue to introduce standard fitment on additional machine models and at the same increase the length of the free software subscriptions included with the machine purchase. Arguments such as the OEMs’ weak spot being the inability to adequately serve the needs of mixed multi-brand fleets are becoming less valid thanks to initiatives such as the AEMP telematics standard which makes it possible for a multi-vendor fleet to collect data from different brands and manage it all in its software interface of choice.

There are however promising opportunities for telematics players that partner with the OEMs, either as end-to-end full-service providers or – in many cases maybe more realistically – working alongside OEM personnel to optimise the telematics functionality. There are already several notable examples of partner-powered and co-developed offerings in the construction equipment OEM telematics space. In line with trends noted in adjacent markets such as fleet management for commercial vehicles, Berg Insight anticipates that the partner strategy will continue to grow in popularity among the CE manufacturers at the expense of in-house telematics development efforts.

This can especially be the case for equipment manufacturers that do not currently offer OEM telematics to its customers, and may be looking to catch up with the competition. An increasing number of players such as vendors focused on commercial vehicle fleet management are moreover expected to diversify into telematics for construction equipment and other off-highway vehicles and stationary objects driven by the popularisation of the Internet of Transportation Things (IoTT). This enables customers to monitor and manage a wide range of diverse assets on the same platform.

Mixed fleet telematics example enabled by the ISO 15143-3 (AEMP 2.0) standard

While telematics has for some time been perceived as a value-added service, these offerings are today largely seen as table stakes for the construction equipment OEMs in order to even be considered, at least by advanced customers. Telematics has simply become an important piece of the integrated product offering and an integral part of the machine. With the entry-level telematics features such as track & trace and basic access to machine data being taken for granted, OEMs will instead need to differentiate by offering more advanced functionality than the competition.

As most manufacturers have had telematics systems for quite some time, they also have considerable volumes of aggregated machine data. The richness of sensor data sets is at an all-time high and continues to grow. The current trend is to increasingly analyse the data and investigate what it can be used for beyond mere end-user reports – for example leverage predictive algorithms to intercept before incidents occur based on data mining and pattern recognition. Driven by the equipment OEMs and different types of specialised partner companies, the use of Big Data and sophisticated analytics is only expected to grow in the construction sector in the years to come.

The author of this blog is Johan Fagerberg, CEO of Berg Insight

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