Just as an experienced driver keeps an eye on the road and slows down for difficult bends, a savvy fleet procurement manager needs to anticipate potential risks, know how to prioritise them, and come up with smart plans for mitigation.
A holistic approach to risk management in fleet procurement means ensuring your organisation is not caught unprepared by several different types of risk. The AfMA 2024 Corporate Fleet Insights Report found that increasing driver and vehicle safety is a priority for many respondents in a survey of over 300 fleet managers. 50% were focused on driver safety, 41% on vehicle safety, and 54% said they have driver education programs in place.
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Risk management, however, goes well beyond the risks of driver and vehicle accidents. Market uncertainty is a key concern, with 39% of larger fleets increasing forward planning to navigate uncertainties like vehicle shortages. According to AFMA’s report, over 50% of businesses say ensuring compliance with regulatory requirements is their second-biggest priority in 2024, including alignment with new mandatory sustainability reporting. Finally, cost control is an ever-present risk, driving the need for continuous improvement in operational efficiency. 63% of organisations use technology to track key metrics like vehicle utilisation and maintenance costs, while 52% rely on software to automate fleet operations and management.
Why does it matter? The impacts of neglecting risk management can be severe, including risk to life, injury, liability claims, loss of productivity, revenue decline and reputation damage.
Anthony Perri, General Manager – Sales and Customer Relations at Interleasing, says organisations need a more sophisticated approach to understanding, identifying and prioritising risks. “Generally, most companies that approach Interleasing are primarily focused on the risk of a vehicle accident without considering other sources of risk. When we speak to someone who may have not conducted a risk analysis, we make it our priority to support and guide them through the process."
A comprehensive approach to risk is essential. But how do we identify and prioritise risks in a complex category like vehicle leasing? We suggest beginning with the following steps.
1. Define vehicle and fleet objectives
Ensuring that procurement aligns with overall business objectives is crucial for building a relevant and fit for purpose fleet strategy. Rather than focusing narrowly on procurement KPIs, it's important to consider how fleet procurement strategies can support broader company goals.
These may include cost reduction, operational efficiency, and protecting the organisation’s brand and reputation. More organisations are moving towards sustainability initiatives which include greener fleets and preparing for transition to electric vehicles (EVs).
It's helpful to minimise guesswork or assumptions regarding business goals. Familiarising yourself with your organisation’s high-level objectives and conducting a business needs analysis can be beneficial, ensuring that each objective in your fleet procurement strategy is clearly aligned with a business goal. Since organisational goals and priorities can be fluid and may change at any time, it’s important for objectives to remain dynamic and adaptable.
2. Gather data
Gathering data is essential to establish a baseline, identify gaps, and build a solid, data-driven foundation for an effective risk strategy. Collecting relevant information—such as vehicle performance, maintenance records, fuel consumption, and driver behaviour—enables the identification and prioritisation of risks.
There’s no place for managing fleet data with a spreadsheet. Having a simple and efficient platform for sharing data is crucial, as it boosts efficiency, streamlines communication and creates a single source of truth for fleet data.
Fleets are using analytics and BI applications to manage costs (68%), safety (65%) and inventory (59%). Challenges include turning data insights into actionable strategies and having expertise in-house to analyse and interpret data.
3. Conduct risk assessments
Uncover your blind spots. With access to relevant and up-to-date fleet data, work with your peers to conduct a SWOT analysis as part of your business needs analysis. This will help identify both internal and external risks that could impact your procurement decisions. There are several risk analysis tools and matrices available, often integrated into risk management software. Interleasing has created a handy risk checklist for fleet and finance managers.
4. Engage Stakeholders
Attempting to identify fleet risks without first talking to the people behind the wheel will limit your view. Involving subject-matter experts—such as fleet managers, drivers, and maintenance staff—ensures a comprehensive understanding of the unique challenges and risks associated with vehicle leasing. Their firsthand insights and experiences can uncover potential issues that may not be immediately apparent, leading to more effective risk management strategies and a culture of shared responsibility.
5. Categorise risks
Beyond simply creating a long list of risks, it can be helpful to sort risks into different categories. Remember to look beyond your KPIs and speak to your peers to engage with higher-level objectives – these categories could be based on your organisational goals (see step one) to help ensure alignment and relevance.
Interleasing’s guide to Managing Fleet Risk suggests classifying risks into financial, reputation, HR, and legal. Here is a snapshot of the contents of this guide.
6. Analyse and Prioritise Risks
Particularly useful in terms of risk prioritisation, a risk matrix is a visual guide that plots the probability of a risk occurring versus the severity of the outcome. Doing so by category will help you focus on the most critical risks first.
Engaging with experts is an important step. Speak with your FMO (Fleet Management Organisation) or seek the advice of one when prioritising risks and how they can be best managed (and practically so).
Australian Red Cross, for example, came to Interleasing for advice on strengthening their compliance management and ensuring their clients, volunteers, members and drivers were safe. Interleasing brought products to the table that were able to capture compliance needs such as induction, driver training, licenses, and support. Watch Australian Red Cross talk about their experience with Interleasing here.
7. Document everything with fit-for-purpose software
Documenting all risk-related information in fleet management can help ensure compliance, accountability, and inform better decision-making. Using a dedicated fleet management software platform that includes a risk register tailored to this area is often the most effective approach, as spreadsheets can only take you so far.
8. Monitor and review
Risk management is not a set-and-forget exercise, so it is best to stay proactive. Monitor and review risks to maintain safety, ensure compliance, and drive operational efficiency. Regular assessments help identify emerging risks and evaluate the effectiveness of existing mitigation strategies. On a final note, risks constantly evolve and need ongoing monitoring and review, as do organisational goals and priorities.
Use fit-for-purpose fleet technology to achieve this through continuous data collection, performance analytics, and feedback from drivers and maintenance staff. Implementing routine audits and risk assessments allows fleet managers to adapt to changing circumstances, ensuring that risk management practices remain relevant and effective.
Next step: Risk mitigation
Now you have identified and prioritised risks in fleet procurement, the next stage involves mitigating these risks. Download Interleasing’s risk checklist and holistic guide to managing fleet risk to learn more.
Other resources
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