Alphabet: Why business mobility is a true cost saver – Ed Frederiks and Christian Steiner
The management of employee travel and fleet mobility can be an expensive business. Alphabet International's CEO Ed Frederiks and head of mobility services Christian Steiner explain why their company's innovative and cost-effective approach to both could put 'business mobility' on every finance director's agenda.
How do you define 'mobility management' and why should finance directors be interested in the concept?
Christian Steiner: 'Mobility management' is a relatively new term. It is comprehensive in that it involves everything that makes an employee mobile, including mobility substitutes such as video conferencing, teleworking and virtual meetings. At Alphabet, we call this 'business mobility'. The basic idea of business mobility, however, is to combine fleet management with travel management. Finance directors should be interested in mobility management because it helps cut costs.
Ed Frederiks: Let me add that, as yet, mobility has never really been analysed as a whole. It can actually be the second or third-largest expense of a company and mobility management is the key to reducing this cost.
In addition, in booming areas, facilitating mobility through innovative solutions serves as an incentive for finding new employees. So it involves cost management on the one side and good employee management on the other.
How embedded is mobility management in Alphabet's vision and why?
EF: Mobility management is a tangible and fundamental part of Alphabet's vision. We offer outstanding business mobility by providing solutions for today and devising answers for tomorrow. We are constantly communicating with our customers to find out exactly what they require.
Also, the automotive market is about to change fundamentally - namely by moving away from traditional combustion engines to engines running on electricity or alternative types of energy. This means people's
mobility needs will also change. As we develop comprehensive mobility solutions, we take all of
these factors into consideration.
CS: We manage a huge number of customers and we listen to what they want and need. One result of this is AlphaCity, our corporate car-sharing solution (CCS). AlphaCity was initially quite different, but with input from the markets it has gone on to become the successful business mobility product it is today.
How can companies effectively coordinate and handle mobility management?
EF: It all depends on the companies' size and what they do. Consulting companies, for instance, are different from manufacturing companies. Our customers are all unique so it's important that we sit down with them and understand their specific needs.
CS: It is fair to say that mobility management requires a change in people's opinions. They should think of travel management and fleet management as belonging together. Some enterprises have already recognised this and grouped all their mobility under a single roof because this is a good way to lower costs.
How does the traditional total cost of ownership (TCO) metric compare with the new total cost of mobility (TCM) metric, and how should companies go about optimising their TCM?
EF: TCO is traditionally about whether you own the car or not. TCM refers to all forms of mobility. With TCM, you analyse your actual mobility needs and what they cost.
Our business is about convenience: companies are keen to offer convenience to their employees through attractive mobility solutions and we are keen to offer our customers convenience in the shape of a single, itemised and transparent bill at the end of the month.
In a nutshell, our solutions are 'glocal'. We have global expertise and local adaptation. We adapt to individual countries' conditions and criteria in order to assess the individual TCM of every single customer. This customer-centred approach is Alphabet's speciality.
CS: TCO is outdated; it is becoming more and more integrated into the comprehensive thinking of TCM. In the past, people focused on TCO and the prices of leased cars. We realised, however, that our customers need transparency in their mobility costs - they know exactly what each car costs annually, but they lack information about how much they pay for rental cars, taxis or private car use each year. This sort of comprehensive mobility budget thinking is becoming ever more popular as technology evolves, facilitating new solutions such as our CCS model AlphaCity.
When and where is the AlphaCity 2.0 car-sharing scheme due to be launched? What lessons were learned from the 2010 test phase in France?
CS: We just launched AlphaCity in Germany and the UK. By the end of the year, AlphaCity will be available in the Netherlands and a couple of other European countries. The international roll-out proved to us that AlphaCity is the right concept. When we started developing this business mobility scheme, we listened to our customers. They told us their specific needs and we then came up with this solution. They are really thrilled with the results.
Having recently acquired ING Car Lease, how is the group positioned to develop and roll out innovative, timely and useful mobility services across an increased number of geographic markets?
EF: Alphabet is not an inward-looking company. We don't want to concentrate on ourselves or the merger that lies behind us. We want to focus on our clients, for whom we bring together the best of both worlds. What energises us is that we have so many visionary concepts.
We believe that geographic spread is simply necessary to realise these visions - we could not make do with less. We have a great variety of customers in all these countries; some are big economic players, others smaller. This puts us in a very comfortable position. I think that the mobility services approach will become even more important to our customers in the next few years.
CS: We are committed to fulfilling our promises and delivering quality to the customer. Rather than slowing us down, as some might think, the merger of the two companies has accelerated things. It has made us grow faster in terms of geography, skill sets and the like.
Where is the mobility management industry heading in terms of innovation and what is Alphabet most excited about?
EF: There is no such thing as a mobility management industry yet, and this is what makes Alphabet so unique and pioneering: we are the first ones to use the term 'business mobility'.
We combine what we currently have in hand with future developments. If you want to call this the mobility management industry, that's great. Such an industry would definitely be good for both society and existing customers.
Either way, I believe that we need to innovate constantly and to do that we require an open door. I can tell you this: in services, you never know where you will be in five years' time. But if you take a clever approach, if you deliver quality to your customers, if you keep talking to them, listening and then applying their needs to the business, you will be at the forefront of the industry. And you will want to make investments in that direction.
CS: I would like to mention that the mobility management industry is at a formative stage. From the perspective of innovation, it is very much about integrating various services and offerings. From a technical perspective, we need to make it easier for the customer by, for instance, providing them with a single mobility card that offers them access to multiple services. This is just one aspect of innovation. We are most excited about being the frontrunner and innovation leader. We have proven this in our segment and will continue to do so.