654
Developing an Online Fleet Management Service
workplace safety. In hindsight, the brothers were
happy they stuck with their intuition and ignored
this advice.
We felt then that a proliferation of products would
spread our start-up resources much too thin. So
we decided, against the advice of our advisors, to
FRQFHQWUDWHRQWUDI¿FVDIHW\DORQH/RRNLQJEDFN
we see this decision as critical to the company’s
early survival and subsequent success.
Taking this focus one step further, they de-
cided to initially provide training for drivers of
passenger vehicles only (such as sales people,
managers, and others). They would not consider
the massive trucking market, as truck drivers (at
that time) were less comfortable with computers
and much less likely to have Internet access.
It took a year for the product to be brought
to launch status. Lesson scripts needed to be
developed, driving situations videotaped, voices
added to the lessons, and quizzes developed. Also,
the basic delivery structure, utilizing the Web,
had to be put in place. AlertDriving’s Web site
was developed to provide information about the
company and its products, to allow testing of a
sample lesson, and to provide access to training
modules for customer employees.
$VDQHZSOD\HULQWKHGU LYHUWUDL Q LQJDQGÀHHW
risk management business, AlertDriving needed
to establish credibility. One way they did this was

E\HQOLVWLQJ7UDI¿F6DIHW\0DUVKDOV²SHRSOH
with considerable experience as provincial police,
VWDWHWURRSHUVRUFLW\WUDI¿FRI¿FHUV7KHVHSHRSOH
provided advice on the initial product and allowed
AlertDriving to boast about their hundreds of
years of experience. Over time, the role of these
TSMs migrated to services concerning accident
investigation and reconstruction. They were paid
R Q D I H H  E D V H G E D VL V  V R S U RY L G H G V L J Q L ¿ F D Q W Y D O X H 
during the start-up phase, at relatively low cost.
In high tech marketing, the concept of the
³ZKROH SURGXFW´ LV ZHOO HVWDEOLVKHG 0RRUH
1999). Most potential customers are looking for
one-stop shopping, and a compelling reason to
buy comes when the entire package (the product/
service, training in use of it, after-sales support,
etc.) is made available. As Rob and Gerry Martin
talked further with potential customers and de-
veloped the initial training series, they developed
a better understanding of what AlertDriving’s
ZKROHSURGXFWVKRXOGEH7KH\IRXQGWKDWÀHHW
managers routinely checked the driver license
records of potential drivers and sometimes the
records of current employees. All aspects of a
SHUVRQ¶VGULYLQJUHFRUGVSHHGLQJWLFNHWVWUDI¿F
infringements, accidents, etc.) were available.
However, it wasn’t always easy to do this. The
brothers observed that a quick, user-friendly
means of accessing an individual’s MVR (motor
YHKLFOHUHFRUGZRXOGPDNHOLIHHDVLHUIRUÀHHW

PDQDJHUV6RWKH\HYDOXDWHGVHYHUDO¿UPVWKDW
provided access to such records and teamed up
with First Advantage Corporation, a Florida-based
EDFNJURXQGFKHFNLQJ ¿UP 7KH $OHUW'ULYLQJ
Web site was developed to interface with First
Advantage’s database. While the margin on this
business was low, it was a natural complement to
AlertDriving’s training product (which had much
higher margins).
In April 2000, AlertDriving had its next
major test at the National Association of Fleet
Administrator’s (NAFA) tradeshow. With an
entry fee of US$15,000 (equivalent at the time to
some $23,000 Cdn), it was an agonizing decision.
Gerry and Rob decided this was the best time
and place to showcase their new product. So they
put their marketing experience into high gear by
preparing an extensive preshow direct mailing
and telemarketing campaign. Results were very
positive — their booth was always busy and
WKH\VLJQHGXSWKHLU¿UVWFXVWRPHU&XPEHUODQG
Farms, operator of a U.S. gas and convenience
store chain). In addition, they came back with
a long list of prospects. Again drawing on their
marketing experience, they hired telemarketers
655
Developing an Online Fleet Management Service
to contact everyone on the prospect list, gauge
their level of interest, and encourage them to
look at www.alertdriving.com. Rob and Gerry

then spent time following up on the more prom-
ising prospects and Gerry worked on closing the
GHDOV7KHHQWLUHF\FOH¿UVWFRQWDFWWRVLJQLQJD
contract) was usually several months, and it took
FRQVLGHUDEOHHIIRUW,QJHQHUDOPRVW¿UPVZHUH
quite reluctant to seriously consider this innova-
tive approach to driver training, but there were
S U R J U H V V LY H ¿ U P V Z K R X QG H U V W R R G W KH D G Y D Q W D J H V 
and cost savings.
AlertDriving also started using Web site data
to observe which potential clients were coming
to the Web site, how long they stayed, what they
looked at, and which test modules they tried. This
provided leads for them to pursue.
Once we knew who was looking at our Web site
and testing the sample modules, we knew who to
follow up with. We’d call them and ask if they’d
had a chance to look at our material, knowing
full well they had already worked through it. We
didn’t bother with people who came in and only
stayed a minute or two.
Gradually, it became clear that negligent entrust-
PHQWZDVDPDMRUFRQFHUQIRU86ÀHHWRSHUDWRUV
People injured, or simply involved, in an accident
ZLWKVRPHRQHGULYLQJDÀHHWYHKLFOHFRXOGVXHWKH
company owning the vehicle. The lawsuit would
be based on the argument that the company had
not exercised due diligence in hiring the vehicle
operator and properly training the driver. Courts
FRXOGPDNHDZDUGVLQWKHVHYHQ¿JXUHUDQJHZLWK

the largest judgment coming in at US$48 million.
Fleet managers needed to show that due diligence
had been pursued in selecting drivers, monitoring
their driving record, and ensuring that they took
appropriate driver training.
Besides mitigating the risk of negligent entrust-
ment, there were direct savings available to cus-
tomers. Driving records affected insurance pre-
PLXPVDOWKRXJKODUJHU¿UPVRIWHQVHOILQVXUHG
AlertDriving used this to show how successful
driver training not only paid for itself, but resulted
LQRYHUDOOVDYLQJVIRU¿UPV$OOÀHHWPDQDJHUVKDG
to do was use the services on the AlertDriving
Web site, which kept records of everything done
E\WKHÀHHWPDQDJHUDQGWKHGULYHUV
In 2001, the company incorporated. Originally
operating under Sonic Sales Aids (the old busi-
ness), the name AlertDriving.com now became
prominent. Growth continued, with an operating
GLYLVLRQRIDPDMRUSKDUPDFHXWLFDO¿UPLQLWLDWLQJ
a pilot program for 700 of their drivers. This led
to an expanded program for the division’s entire
ÀHHW WKH IROORZLQJ \HDU IROORZHG D \HDU ODWHU
by a contract for all its North American drivers
(some 13,000).
AlertDriving found that more and more large
clients (and prospective clients) were invest-
ing millions of dollars in their own Learning
Management Systems (LMS) to manage their
corporate training needs. Once this trend became

apparent to the Martin brothers, they moved
quickly to take the necessary steps to ensure
their driver training programs were compliant
with AICC and SCORM,
2
the industry standards
governing the delivery, tracking, and reporting of
Web-based training material in North America.
AlertDriving earned the distinction of being
WKHRQO\'RFHQWFHUWL¿HGFRQWUDFWRUVXSSO\LQJ
RQOLQH ÀHHW ULVN PDQDJHPHQW SURJUDPV 7KLV
ZDVDVLJQL¿FDQWFRPSHWLWLYHDGYDQWDJHEHFDXVH
Docent was the largest LMS software provider to
AlertDriving’s Fortune 1000 target market.
By 2004, AlertDriving had expanded their
product line further. Their driver training pro-
grams were now available for drivers of light
duty pickup trucks, as well as 15-passenger vans.
Other services were also provided (see Appendix
A for a complete list, as of December 2005). While
AlertDriving was based in Canada, sales were
almost exclusively in the USA. One reason was
the greater concern about lawsuits. Another was
656
Developing an Online Fleet Management Service
that American companies were more aggressive
in seeking savings and were more comfortable
with new technology.
Timmons and Spinelli (2004) discuss the
balancing act a growing business must walk.

Sometimes referred to as a three-legged stool, their
model of the entrepreneurial process is shown in
$SSHQGL[%$OHUW'ULYLQJ¿WVWKLVPRGHOZHOO
both in terms of meeting many key questions as-
sociated with each of the three major components
and in terms of the ups and downs a new venture
faces as it establishes itself.
SETTING THE STAGE
The Internet has changed the way many small
businesses operate and provided opportunities
for creating new types and forms of business.
AlertDriving.com is a recent Canadian e-business
start-up that utilizes the Web and information
technology to meet customer needs in a new, in-
novative manner. Using e-learning and e-business
D V D P H D Q V R I R Y H U F R P L Q J VL J Q L ¿F D QW H Q W U \E D U U L H U V 
LQDQHVWDEOLVKHGLQGXVWU\3RUWHUWKH¿UP
has developed a solid foothold in a traditional
industry. Furthermore, their product/service line
has expanded as they moved driving training and
ÀHHWULVNPDQDJHPHQWIURPWKHSK\VLFDOWRWKH
virtual value chain (Rayport & Sviokla, 1995).
AlertDriving’s Web site (www.alertdriving.com)
SURYLGHVDQLQWURGXFWLRQWRWKH¿UPVHH$SSHQGL[
C) and their services (see Appendix A).
AlertDriving has taken advantage of new
learning delivery methods available through the
Internet. E-learning is a rapidly growing market,
replacing traditional classroom education and
training in our knowledge economy (Brockbank,

2002; Nagy, 2004). AlertDriving has focused on
DYHU\QDUURZQLFKHZLWKLQWKLVEURDG¿HOGHVWL-
mated at a market potential of US$600 million for
the North American market. Yet their approach is
WUDQVIHUDEOHWRRWKHUWUDLQLQJDQGOHDUQLQJ¿HOGV
providing a potential means of entry into a much
larger market.
$OHUW'ULYLQJRSHUDWHVZLWKLQWKHÀHHWPDQDJH-
ment services sector.
Fleet management refers to the discipline of
tracking, maintaining, and otherwise manag-
LQJ D ÀHHW RI YHKLFOHV LQ DQ RUJDQL]HG PDQ-
ner. In most cases, fleet management soft-
ware is relied upon to accomplish this task.
Fleet management software offers a number
of useful features. It can be used to schedule
Preventive Maintenance (PM) and inspections,
automatically generate fuel, mileage, tire, and trip
logs, organize all contact information on drivers,
employees, and customers, track all details on each
DFFLGHQWFODLPWUDI¿F YLRODWLRQ PDQDJH SDUWV
inventory and automatically generate and print
ZRUNRUGHUV(QWHUSULVHOHYHOÀHHWPDQDJHPHQW
VRIWZDUHVKRXOGRIIHUDVHWRIÀH[LEOHZHEEDVHG
reporting tools, and in general will be highly
customizable to any vehicle environment.
3
:RUOGZLGH ÀHHW PDQDJHPHQW LV D PDWXUH
business sector, with several large, well-estab-
lished and integrated competitors. Traditionally

DKDQGVRQ³ORZWHFK´DSSURDFKKDVEHHQWDNHQ
7KHÀHHWVHFWRUFDQEHVHJPHQWHGE\W\SHRIYH-
hicle (car, SUV, passenger van, cargo van, truck
(further segmented by GVW), equipment, off-
road, etc.) and type of organization (commercial,
QRWIRUSUR¿WJRYHUQPHQWODZHQIRUFHPHQWDQG
emergency, etc.). Fleets are further segmented
by size (<500, 501–2000, 2001–5000, >5000
vehicles). Organizations will have one or more
ÀHHWPDQDJHUVRYHUVHHLQJWKHLUÀHHWRSHUDWLRQV
and managing the associated risk. While the move
E\PDQ\¿UPVWRIRFXVRQFRUHFRPSHWHQFLHVDQG
outsource the context (Moore, 2003) is relatively
UHFHQWRXWVRXUFLQJRISDUWVRIÀHHWPDQDJHPHQW
has been common for several decades (e.g., leasing
DQG¿QDQFLQJ7RGD\PDMRUÀHHWPDQDJHPHQW
657
Developing an Online Fleet Management Service
VHUYLFH ¿UPV SURYLGH VXFK VHUYLFHV DV YHKLFOH
OHDVLQJÀHHWSROLF\DQDO\VLVDQGUHFRPPHQGD-
tions, benchmarking, vehicle recommendations,
ordering and purchasing vehicles, arranging for
vehicle delivery and administration of the title and
registration process, tax and insurance require-
ments, pursuing warranty claims and remarketing
used vehicles, fuel management, maintenance
management, road assistance, periodic inspec-
tion, accident services, driver training, and driver
SUR¿OLQJ
CASE DESCRIPTION

As of 2005, AlertDriving had a proven value
proposition for current and prospective custom-
HUVDQGDQHVWDEOLVKHGSUHVHQFHLQWKHÀHHWULVN
PDQDJHPHQW¿HOG:KLOHWKH\PD\KDYHHVFDSHG
notice by major competitors in the past, this is
no longer the case. Having proved the viability
for applying e-learning to this market segment,
WKH\H[SHFWHGWRVHHRWKHU¿UPVWDNLQJDVLPLODU
approach. Indeed, this has already happened, al-
though the competition could not match the current
quality and capability of AlertDriving’s products.
Appendix D lists many of the major competitors,
along with other sources of information.
AlertDriving’s customers had three reasons
IRULQYHVWLQJLQWUDI¿FVDIHW\PDQDJHPHQWSUR-
grams. Negligent entrustment suits were on the
increase and organizations needed to show they
had exercised due diligence. Insurance companies
PRQLWRUWKHLUFOLHQWVDQGJRDIWHU¿UPVZLWKKLJKHU
than average claims records — either increasing
their rates or dropping them. Finally, for self-
LQVXUHG¿UPVWKHFRVWRIDFFLGHQWVFODLPVORVW
WLPHUHSDLUVHWFFDQEHUHGXFHGVLJQL¿FDQWO\
through proper driver selection and training. U.S.
N a t i o n a l S a f e t y C o u n c i l d a t a s h o w t h a t b u s i n e s s e s
directly spend about $60 billion annually on traf-
¿F FROOLVLRQV DQG H[SHULHQFH DOPRVW  PLOOLRQ
lost workdays.
The customer value proposition comprised
three components: (1) a one-stop Web-based traf-

¿FVDIHW\PDQDJHPHQWSURJUDPDQHOHDUQ-
ing driver training program available anytime,
DQ\SODFH YLD WKH ,QWHUQHW DQG  VLJQL¿FDQW
cost savings compared to behind-the-wheel or
classroom training.
Appendix A lists AlertDriving’s products
DQG VHUYLFHV DQG WKHLU :HE VLWH EULHÀ\ GH-
scribes each. Internet-based learning accounted
for approximately 75% of AlertDriving’s 2004
revenues. Another 20% of revenues came from
vehicle record checks and the Motor Vehicle
Record checks program. Other products and
services accounted for the remaining 5%. Gerry
estimated AlertDriving’s share of their segment
at 80% to 90%.
Most of AlertDriving’s revenues came from
the U.S. market, but by the end of 2004, expan-
sion to Europe was contemplated. As of early
2005, AlertDriving planned to have their Internet
products available in 12 languages within a year.
Unlike some of their competitors, they would not
simply use translated voice-over versions of the
North American product to penetrate this market.
Instead, they would create a new, customized
package from the ground up. This represented a
substantial undertaking, since it included location
¿OPLQJLQWKHWDUJHWFRXQWU\HQVXULQJWKDWFRXQ-
WU\VSHFL¿FGULYLQJUHJXODWLRQVZHUHDFFXUDWHO\
presented, incorporating information from current
local driving manuals, and using a native speaker

to record all voice-over material. Dealing with
the language portion alone was estimated to cost
some $15,000 to $20,000, with the overall cost to
offer four to six modules in each of 12 countries
UHDFKLQJVL[¿JXUHV
Expansion to Asia was not currently contem-
plated because there were many more languages,
Internet penetration was much lower than North
America and Europe, and Gerry perceived that
scooters, not automobiles, were the dominant
form of motorized personal transportation. In
658
Developing an Online Fleet Management Service
addition, the legal environment governing traf-
¿FVDIHW\LVVXHVZDVXQIDPLOLDUWRWKHEURWKHUV
*HUU\VDLG³:HMXVWGRQ¶WNQRZKRZWRGR$VLD
at this time.”
HUMAN RESOURCES AND
ORGANIZATIONAL STRUCTURE
AlertDriving continued to be a lean organization.
Additional employees had been hired only as
necessary and as the company could afford them.
In the early days, there was no formal organiza-
tional structure and there were few employees.
Over time, more employees were added, and by
mid 2005 there were 21 in total (including one
co-op student). Appendix E shows the company’s
organizational chart.
Finding the right people, and keeping them,
KDVEHHQGLI¿FXOWDWWLPHV*HUU\VDLG

We put a lot of emphasis on the hiring process now
that we’ve come to the realization that we made
a few poor choices along the way. Some of our
hiring decisions proved to be extremely disrup-
tive and costly to the company. The new focus on
getting the right people has helped, but we still
need to be a lot better at attracting, hiring, and
training new personnel.
Training new employees was equally chal-
lenging, especially in the sales area. It could take
six months or more to get someone up to speed.
Gerry provided a recent example:
On the job training is often not the best approach
but practical considerations tend to dictate that’s
what must happen. Recently Rob and I had to put a
large amount of time and energy into training two
new salespeople on our products and the market.
We worked very hard to get them comfortable and
knowledgeable so they could stop being a drain
on our limited resources and start to contribute
to sales and to the bottom line.
$VDVPDOOHQWUHSUHQHXULDO¿UP$OHUW'ULYLQJ
had a strong bias for action. While an organizational
structure existed, everyone was more interested in
producing results than simply looking after their
particular job area. One employee said:
Nobody’s too proud to do anything around here.
I’ve seen Gerry and Rob pick up a broom and empty
the garbage when it had to be done, and unlike
my previous job in a highly bureaucratized orga-

nization, formal job titles are almost irrelevant.
My own title varies with the hour. I’m supposed
to be an Admin Team Leader, which means I’m
responsible for helping the administrators in our
FOLHQW¿UPV¿JXUHRXWKRZWRUXQRXUSURJUDP
But I also answer the phone, support sales and
act as a receptionist. When something new comes
up, everyone gets involved, which means we all
grow and learn together.
This bias for action and focus on results,
plus the leading edge nature of the products,
was especially attractive to young IT graduates.
AlertDriving was able to offer greater challenge
and opportunity to recent grads than most other
¿UPV6RZKLOHWKH\ZHUHXQDEOHWROXUHQHZ,7
staff with higher wages and stock options, they
were able to offer comparable wages along with
an exciting work environment.
FINANCES
Up to the current time, AlertDriving has been
¿QDQFHG PDLQO\ E\ WKH 0DUWLQ EURWKHUV DQG
PRUHUHFHQWO\IURPLQWHUQDOFDVKÀRZ1RZWKDW
$OHUW'ULYLQJZDVVKRZLQJDSUR¿WPRUH¿QDQFLDO
resources were available for product development
and market expansion. Yet the brothers continued
WREHZDU\RIH[WHUQDO¿QDQFLQJSUHIHUULQJWR
continue their bootstrapping approach. On the
other hand, Gerry now wondered if their conser-
YDWLYHDSSURDFKWR¿QDQFLQJPD\EHKDPSHULQJ
growth of the business.

659
Developing an Online Fleet Management Service
5HO\LQJRQIUHHFDVKÀRZOLPLWVRXUDELOLW\WRDGG
staff, which in turn has a negative impact on our
capacity to develop new products and grow our top
line. We need to consider our options to overcome
this situation without giving away the farm.
Appendix F shows a common size historical
income statement for the past four years (the
company prefers not to disclose actual sales and
H[SHQVH¿JXUHV
MARKETING AND SALES
Gerry and Rob took a very systematic approach
to customer prospecting, making their pitch and
closing the sale. It was both labor and time in-
WHQVLYHDQGLWKDGSURYHQLWVHOIRYHUWKHSDVW¿YH
years. Today, clients included many Fortune 50
companies, state governments, universities, and
even churches (for 15-passenger van courses).
AlertDriving’s customer retention rate approached
100% and their user satisfaction measures con-
tinued to be very high. Gerry felt their focus
on systematic and structured sales techniques
was a competitive advantage in the industry. It
included such detail as always sending a thank
you note to a prospective customer immediately
after a sales presentation (and before leaving the
customer’s city).
One of the account managers provided an
overview of the current sales process:

)LUVW5RESURYLGHVDFDOOOLVWRIÀHHWULVNDQGVDIHW\
professionals that he generates using information
from the various industry associations that Alert-
Driving has joined. This list is passed on to our
telemarketing people, who contact the prospects
and ask if they’d be interested in having the demo
link to our sample training program e-mailed to
them, so they can play around with it. The on-line
activity of these demo trials is monitored using
our Web site tracking tools. The business day after
WKH\¿UVWORJLQDQGYLHZWKHGHPRDQDFFRXQW
manager calls to determine their level of interest
and qualify them while obtaining their feedback.
Although we already know they’ve looked at the
demo we ask them if they’ve had a chance to check
it out because it gets the conversation going, and
may even give us the opportunity to answer any
questions that the prospect may have. Our goal is
to get them to agree to have a free pilot program
VRWKH\FDQUHDOO\HYDOXDWHLWDQGVHHWKHEHQH¿WV
for themselves. The conversion rate on pilots is
very high.
Alternatively, if the prospect does not log in
within two weeks, our system automatically sends
them a reminder e-mail with their username and
password to access the demo. This happens every
week until the prospect either logs in or requests
to be removed from the demo reminder list. The
automated reminder is essentially a silent sales-
person that has proven to be extremely effective

at getting our training in front of a large number
of prospects.
5HÀHFWLQJ EDFN RQ WKH GHYHORSPHQW RI WKLV
approach and its importance, Gerry acknowl-
edged:
In the beginning it was easy to concentrate on
the sales process since there were no clients to
service. However, as our customer list grew some
of our selling efforts were diverted away from lead
generation, prospect-qualifying, and closing new
business to ongoing account management. But
given the length of our sales cycle, the upstream
end of the pipeline is critical to our continued
success. Consequently, at the beginning of 2005
we rededicated ourselves to our successful pros-
pecting system.
To support this initiative, AlertDriving hired
WKHLU¿UVWLQVLGHVDOHVSHUVRQ+LVMREZDVWRFXOWL-
vate relationships with prospects before handing
660
Developing an Online Fleet Management Service
them over to the outside sales team. His other as-
signment was to build relationships with existing
clients to ensure annual repeat business.
INFORMATION TECHNOLOGY
Information and communication technology
(ICT) has played a pivotal role in the development
of AlertDriving. While not an entirely virtual
company, they had many characteristics of one.
As a Web-based e-learning business, technology

remained crucial to both running and growing the
company. Much of their marketing and adminis-
tration relied upon various software applications.
Consequently, their Technology Group was large,
second in size only to Sales. At start-up, Alert-
Driving had a single developer. Now there were
six people, including four developers. Additional
hires were planned.
AlertDriving’s initial software platform
evolved over a period of years, with new ap-
plications appended from time to time. This
led to an unstructured, dated system that was
LQFUHDVLQJO\GLI¿FXOWWRH[SDQGRUWRFXVWRPL]H
for client needs. Consequently, in late 2004, a
complete redevelopment was undertaken. Termed
DIIHFWLRQDWHO\ DV WKHLU ³$ERPE´ SURMHFW WKLV
was to provide a springboard for future growth,
enable AlertDriving’s global initiative, and pro-
vide clients with more customization ability. A
developer explained:
2XUSDVWRQHVL]H¿WVDOODSSURDFKGRHVQ¶WZRUN
anymore. Customers want customization. While
we now do this through hard coding, the new
platform will have a sophisticated “plug ‘n play”
preference system, allowing customers to select
the look, feel, and features they want.
$VLGHEHQH¿WRIWKLVFDSDFLW\WRFXVWRPL]H
was the potential for customer lock-in, making it
less attractive for customers to move to another
competitor. If switching costs, or at least perceived

switching costs, became high, there would be
little incentive for a customer to leave, as long as
current costs and services were not excessively
different from a competitor’s.
As AlertDriving matured, a more systematic
approach to IT projects developed. Standards
and best practices were introduced to software
development. Where once the approach was to
start coding and then go back to add additional
IHDWXUHVRU¿[DQDSSURDFKWKDWZDVQRWZRUNLQJ
well, now a formal development process was in
place. Industry practices were followed for both
IT project planning and management. This was
paying off in terms of product quality and delivered
functionality, and projects were much more likely
to be completed on time and on budget.
From start-up, the company went with com-
mon system and application software. As much
as possible, open source software was used (e.g.,
Linux,
4
PHP,
5
CVS,
6
and MySQL
7
). Initially,
the reason for going the open source route was
solely to save money. However, these products

were found to be robust, with improvements
regularly forthcoming. Their operating system
was Redhat Enterprise Linux, so there was the
EHQH¿WRIUHJXODULPSURYHPHQWVIURPWKHRSHQ
source development community, along with the
security and other enhancements and ongoing
technical support provided by Redhat. MySQL
suited AlertDriving’s needs, and they had no plans
to replace it anytime soon with any larger, much
more expensive proprietary database management
system such as Oracle or DB2. The business would
KDYHWRJURZE\RUGHUVRIPDJQLWXGH¿UVW
On the hardware side, AlertDriving was lean.
Everyone had the ubiquitous desktop microcom-
puter (with more powerful platforms for their Tech-
nology Group). Web site and other development
work was done on an off-line in-house server. This
had several advantages. First, developers were not
delayed by a slow Internet connection. Second,
the system was physically isolated and hence
661
Developing an Online Fleet Management Service
secure from external attack. Third, it prevented
WKHEDGSUDFWLFHRIPDNLQJFKDQJHV³RQWKHÀ\´
to the live production system. Finally, installing
and maintaining development tools (such as the
volume control system) was much more easily
handled on site.
Rather than host and maintain their own
Web site server, they outsourced this to IBM.

Under the arrangement, AlertDriving paid a
¿[HGPRQWKO\IHHIRUDEDVHOHYHOEDQGZLGWK
service, plus an additional variable amount for
DQ\:HEWUDI¿FYROXPHPHDVXUHGLQJLJDE\WHV
per second) that exceeded this base.
8
The pricing
was such that it was in AlertDriving’s interest to
periodically adjust the base level upward as the
average monthly demand increased. Yet they did
not have to forecast and pay for potential demand
peaks that were subsequently not needed. This
was important, as there were usually sudden,
large increases in Web site demand whenever
a new client was signed up – typically many of
WKHFOLHQW¶VHPSOR\HHVZDQWHGWR³FKHFNRXW´WKH
Web site. After a few days demand leveled off to
a new steady state point.
Applications developed by the Technology
*URXSSURYLGHGRSHUDWLRQDOHI¿FLHQFLHVIRUWKH
administrative side of the company. AlertDriving
needed no full-time accounting department with
an account receivables clerk, as client billing was
done automatically each month using a Web-based
system. While minimizing the amount of effort
UHTXLUHGLQWKHRI¿FHWKLVV\VWHPZDVDOVRDS-
preciated by customers, many of whom preferred
(or even required) EDI or Web-based billing. So
this billing system also provided competitive
advantage over competitors without such capabili-

WLHV$QRWKHUDGPLQLVWUDWLYHHI¿FLHQF\FDPHIURP
outsourcing the payroll work to Ceridian.
Sales and marketing relied on another impor-
tant application – the lead tracking system. Sales
used this to see who visited the Web site, how
long they stayed, and what pages they looked at
(as described previously in this case by an account
manager). Knowing which prospects had viewed
the Web site, and which, if any, demos they tested,
sales personnel knew with whom to concentrate
their sales efforts. AlertDriving did not believe
any of their competitors had such a sales tool in
place yet. And there were other custom applica-
tions used by sales to assist in managing an ever
increasing customer list.
Still other applications had been developed
by the Technology Group for their own use. The
new client setup process, which used to require
extensive personal effort, had been streamlined.
Now standard scripts were run, with particular
options enabled. Compared to the past, the time
requirement now was small. Of great assistance
was the Incidence Log used for technical support.
This was a database of past customer problems
and solutions, along with a user tool set. Quickly
searchable, a Help Desk person could immediately
identify whether or not a particular problem had
KDSSHQHGEHIRUHDQGLIVRZKDWZDVGRQHWR¿[
it. New problems and solutions were added as
they occurred. Overall, with the improvements in

application design and practice, there were fewer
customer launch problems and less maintenance
of applications. And with the Incident Log, not
RQO\FRXOGPRVWSUREOHPVEHTXLFNO\¿[HGEXW
IUHTXHQWFOLHQWSUREOHPVZHUHLGHQWL¿HGDQGVXE-
sequent improvements made to the system. While
the number of IT employees continued to grow,
this was in decreasing proportion to the increase
in sales and number of clients supported.
CURRENT CHALLENGES/
PROBLEMS FACING THE
ORGANIZATION
Wanting to continue the growth rate of their
¿UPWKH0DUWLQEURWKHUVIDFHGERWKH[WHUQDODQG
internal challenges. They felt AlertDriving was
clearly the leader in Web-based driver training
DQGÀHHWULVNPDQDJHPHQW<HWWKHFRPSDQ\ZDV
still small, and there were several older, much
larger, competitors in the market space. How
662
Developing an Online Fleet Management Service
fast should the company continue to grow, how
would this growth come, and how could internal
resources be added or better utilized to support
such growth?
Growth could come from greater penetration
of the current market, from geographic expansion,
and/or from new products and services (to either
current or new markets, or both). The development
of online training for European countries came

about as a result of requests from current custom-
ers. Yet, to really capitalize on this, new European
customers would need to be found. This would
require considerable resources, and the Martin
brothers were not yet comfortable with whether
or not to proceed, or how to proceed. While the
U.S. market seemed to be driven to a considerable
extent by negligent entrustment concerns, this
was not expected to be a major selling factor in
Europe. Even the initial approach used to gain
credibility in the U.S. seemed to be inappropriate
for Europe. Gerry explained:
/DVW\HDUZKHQZHZHUH¿OPLQJRYHUWKHUHZHZHQW
into a local pub for lunch. While we were there,
WZRWUDI¿FSROLFHRI¿FHUVFDPHLQKDGDFRXSOH
of beers, and then left. Rob and I looked at each
other, and said, “This sure isn’t North America.”
:HFDQ¶WWDNHWKH7UDI¿F6DIHW\0DUVKDOODSSURDFK
there, as we have here. Europeans seem to place
more admiration and respect on racing car driv-
ers than they do on police. Maybe that’s one way
we gain credibility. I don’t know.
Even servicing European customers in their
own language would present major challenges.
While AlertDriving now had their training avail-
able in a dozen languages, they did not have in-
house employees who could speak any of these
languages (other than English). Bringing a new
client onboard, or even setting a prospect up for
an online demonstration, required communication

between the two organizations. AlertDriving cur-
rently did all its business in English and provided
support during regular North American business
hours. Expanding the business to Europe would
require changes.
Channel development could be used to in-
crease current market penetration through the
use of resellers and third-party distributors. Even
insurance companies were possible partners.
AlertDriving had made two unsuccessful attempts
in the recent past to develop relationships with
RWKHULQÀXHQWLDOFKDQQHOPHPEHUVEXWKDGEDFNHG
away in each case because they became appre-
hensive about losing control over their business
to these much larger partners. Nevertheless, any
such initiative could have the effect of changing
the industry dynamic, and if AlertDriving could
remain in the lead, competitors would be relegated
to follower roles. As Gerry noted:
We don’t just want to be a cute little company do-
ing something unique. We are diligently working
on changing the industry paradigm.
New product development was another option
to consider, both in existing and new markets.
:LWKLQWKHWUDI¿FVDIHW\PDUNHWWKLQJVOLNH
background checks, drug testing, tracking, and
truck driver training could be introduced. Beyond
AlertDriving’s current market, other e-learn-
ing programs (hazardous goods training, work
safety programs, etc.) could be introduced. Each

would involve a substantial development effort,
and there was a real risk of failure if the product
was not accepted in its market. Perhaps product
development programs should be restricted to
those made at the request of existing clients,
which would seem to enhance their likelihood of
success. One new enhancement AlertDriving was
already developing was the capability to provide
WUDI¿FVDIHW\PDQDJHPHQWWUDFNLQJDQGUHSRUWLQJ
on a global basis for clients, along with custom
components as required.
$OHUW'ULYLQJFHUWDLQO\GLGQRWKDYHVXI¿FLHQW
resources to pursue all growth opportunities. Nor
was it in the company’s best interest to spread
LWVHOIWRRWKLQ<HW¿QDQFLDOUHVRXUFHVZHUHDNH\
663
Developing an Online Fleet Management Service
constraint on growth and the brothers wondered
ZKHWKHU RU QRW WKH\ VKRXOG EULQJ LQ ¿QDQFLDO
partners. If so, how much should be raised, and at
what cost (in terms of giving up ownership)?
An immediate challenge was the foreign
exchange rate between Canada and the United
States. As a Canadian company, reporting results
in Canadian dollars, and yet realizing almost all
sales in U.S. dollars, the soaring Canadian dollar
hurt. A few years ago, the exchange rate differen-
tial hit a high of Cdn$1.62 to US$1. Now, as the
Canadian dollar had rapidly increased in value,
it was close to a two decade low at Cdn$1.16 to

US$1. This year’s sales would have to grow by
some 20% just to maintain the 2004 level.
Finally, the hands-on style of Gerry and Rob,
which was such an integral part of AlertDriving’s
past success, was now potentially an impediment.
The brothers recognized they needed to move from
doing to managing, and had started this process.
It was not easy giving up what they knew so well
DQGZHUHVRJRRGDW$QGLWZDVYHU\GLI¿FXOWWR
¿QGDQGGHYHORSVDOHVSHRSOHWRWKHSRLQWZKHUH
they could reasonably approach Gerry’s closing
ability. Furthermore, if the Martin brothers’
growth aspirations were attained, within a few
years they would need to be capable of manag-
ing other managers, removing themselves even
further from day-to-day operations.
REFERENCES
Brockbank, B. J. (2002). E-learning, the emerging
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Moore, G. A. (1999). Crossing the chasm: Market-
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Moore, G. A. (2003). Living on the fault line:
Managing for shareholder value in the Age of the
Internet (Rev. ed.). New York: HarperBusiness.
Nagy, A. (2004). E-learning. ACTeN e-content re-
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acten.net/uploads/images/423/e-learning.pdf

Porter, M. E. (2001). Strategy and the Internet.
Harvard Business Review, 79(3), 62-78.
Rayport, J. F., & Sviokla, J. J. (1995). Exploiting
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ENDNOTES
1
All quotes in this case are taken from in-
terviews conducted by the case writers with
the owners and employees of AlertDriving.
com.
2
AICC and SCORM were acronyms used to
refer to the leading industry standards for
interaction between an online course and a
Learning Management System (LMS). The
Aviation Industry Computer Based Training
Committee (AICC) standard dated to 1988,
and had been used as a standard for Computer
Based Training since that time. While it was
created by the aviation industry, it had always
been intended for use across all industries.
The Shareable Content Object Reference
Model (SCORM) was a standard built upon
the work of several organizations including

AICC, IEEE, and others targeted directly at
the Web-based training market. (Retrieved
December 16, 2005, from e-
safety.com/public/library_aiccscorm.asp)
3
Retrieved December 12, 2005, from
/>HQF\FORSHGLDÀHHWBPDQDJHPHQWKWP