Zonar Systems Award Write Up

2018 North American School and Transit Bus Telematics
Company of the Year Award
2018

BEST PRACTICES RESEARCH
© Frost & Sullivan 2018 2 “We Accelerate Growth”
Contents
Background and Company Performance ........................................................................3
Industry Challenges..............................................................................................3
Visionary Innovation & Performance and Customer Impact........................................4
Conclusion...........................................................................................................7
Significance of Company of the Year.............................................................................8
Understanding Company of the Year.............................................................................8
Key Benchmarking Criteria ....................................................................................9
Best PracticesAward Analysis.......................................................................................9
Decision Support Scorecard ...................................................................................9
Visionary Innovation& Performance ......................................................................10
Customer Impact ...............................................................................................10
Decision Support Matrix ......................................................................................11
Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best
Practices .................................................................................................................12
The Intersection between 360-Degree Research and Best Practices Awards.....................13
Research Methodology ........................................................................................13
About Frost & Sullivan ..............................................................................................13

Background and Company Performance
Industry Challenges
Across North America, with the introduction of strict regulations and guidelines by
government agencies and organizations like the National Highway Traffic Safety
Administration (NHTSA) and Insurance Institute for Highway Safety (IIHS), Frost & Sullivan
has observed the the advent of buses equipped with state-of-the-art equipment and safety
systems - navigation systems, advanced braking systems, and emergency exit solutions.
However, there are still many improvements to make regarding location reports, real-time
vehicle status, and driver performance data. The adoption of new strategies and the
introduction of innovative solutions that address these have been as crucial for the
development of telematics in the bus transportation industry as in any other. With the
introduction of tracking technologies and intelligent vehicle technologies, a number of users
are opting for on board devices (OBDs), such as smart GPS trackers or embedded controller
area network (CAN) bus-based solutions. However, Frost & Sullivan points out that these
solutions can be quite expensive and are limited by system capabilities or the number of
vehicles connected. A cloud-based management system could overcome these shortcomings
by remaining inexpensive as well as by allowing for unlimited connections to the cloud
database. In addition, the transportation sector is the industry most accountable for air
pollution in the United States, and any effort taken to increase the fuel efficiency and
economy will be impeded by increasing automobile purchases and increasing usage by
drivers (direct rebounds).
To achieve a significant carbon footprint reduction, industries must develop innovative
solutions to mitigate emissions that concurrently allow for increased fuel efficiency and
compliance with ever-increasing regulatory mandates. Fleet owners are also tasked with
ensuring timely delivery, reducing operation costs and maintenance costs, monitoring fleet
equipment, and meeting growing customer expectations. This requires a variety of frequent
logs regarding start/stop times and idling times, logs that chart best routes, and constant
updates regarding vehicle condition inspections.
A significant difference between the on-highway industry (heavy duty trucks) and public
transportation (school and transit transportation) is the amount of importance given to
safety- and security-based solutions, including vehicle location, real-time monitoring, door
sensors, emergency handles, and panic buttons. Safety is a top priority for school bus
fleets, with advanced packages offering solutions like optimized routes, compliance
adherence, and data-driven decisions (i.e., utilization and efficiency).
Frost & Sullivan believes that telematics solutions that address the everyday challenges
related to communication, compliance, and overall cost are key to succeeding in the pupil
transportation market; in addition, comprehensive customer support, training, and technical
assistance will prove to be vital for competitive uniqueness.

Visionary Innovation & Performance and Customer Impact
Addressing Unmet Needs
Zonar Systems, founded in 2001 in Seattle, has become a leader in smart fleet
management technology by providing verified inspection reporting, GPS tracking, and ELD-
ready solutions for all fleet sizes. Frost & Sullivan feels that Zonar has cleverly bridged the
gap between inspection and service with its patented Electronically Verified Inspection
Reporting (EVIR®), which inspects radio frequency identification tags (RFIDs). These tags
are placed in critical zones and completely eliminate the need for keeping pen and paper
records. All data from these tags are broadcast to the company’s Web-based platform called
Ground Traffic Control®, wherein fleet managers monitor digital logs that indicate whether
or not a particular part requires immediate/intermediate service. By using its innovative
“Tag Once, Inspect Regularly, Know Always” approach, vehicle upkeep is reduced,
translating to more time on the road. In addition, the tags can be used for student checks
and verifiable driver clock-in times.
Keeping in mind the need for passenger safety, as these are primarily students, Zonar
Systems has developed a mobile-based app - Zonar Verify™ - that provides rider safety and
visibility using RFID enabled Z Pass™ for ample rider visibility and safety. The Z Pass is
integrated with the online management portal RouteBoard to handle route exceptions and
daily bus management. This technology can prevent a “wrong bus, wrong stop” scenario by
sending alerts to the driver, while also maintaining a passenger check.
Furthermore, regulatory pressure to cut both the vehicle emissions and fuel consumption of
these vehicles has intensified in the last few decades in North America. In 2017, the US
Environmental Protection Agency awarded $29 million in grant funding to reduce emissions
from existing diesel engine fleets. An idling diesel truck burns approximately one gallon of
fuel an hour, according to reports generated. Using periodic logs compiled by a Web-based
system, the data obtained can be frequently studied to develop a plan that will reduce the
idling times of bus drivers. After implementing Zonar systems and providing such feedback
to drivers with the help of remote vehicle diagnostics, the amount of fuel burned due to
idling reduced from $600 per week to under $180. The Federal Motor Carrier Safety
Administration (FMCSA) validated Zonar’s logging device to meet testing standards.
Implementation of Best Practices
Continental, a leading German automotive manufacturing company, acquired 81% of Zonar
Systems in 2016. This has allowed Zonar Systems to broaden its presence in the
automotive industry by leveraging the brand name of Continental, improving the resources
at its disposal, and sharing its innovations. Continental’s extensive capability in the auto
components market also helps Zonar develop better hardware and software solutions, as it
is also leveraged by its OEM customers, such as Daimler Trucks North America (DTNA).
Zonar is also the exclusive OEM partner for DTNA’s Virtual Technician solution, which is
installed on more than 200,000 Daimler trucks. Through Zonar’s OEM partnership with
DTNA, every Thomas Built Bus (39% market share of school buses in the US and Canada)

comes off the assembly line equipped with Zonar. Additionally, Blue Bird school buses,
which have a 30% market share in North America, come pre-wired with Zonar equipment.
In 2009 in Sacramento, CA, Zonar’s technology was implemented in a range of 600 vehicles
over the course of 5 years. Installed in combination with Assetworks’ maintenance
management software system Fleetfocus M5, overall fuel consumption was reduced by 25%
(due to reduced idling times and the development of more efficient routes). In turn, this led
to fewer driver layovers and a lower cost of upkeep.
In 2018, Zonar announced its continued sponsorship of the annual Don Carnahan Memorial
Grant opportunities with the National School Transportation Association (NSTA) and the
National Association of Pupil Transportation, providing up to $50,000 in smart fleet
hardware technology to contractor members and school districts. This grant supports and
promotes improved safety, effectiveness, and efficiency of pupil transportation programs in
the United States and Canada.
Customer Service Experience
Zonar has a nearly 99% overall customer retention rate, which it achieves by providing
support to its client base with the help of a dedicated customer care and support
department. This consists of 82 employees (the largest back end customer support
personnel among the competition) and includes industry leading service level agreements.
Zonar also delivers full-service implementation to its customers, including equipment
installation, training, and customer education. In addition to providing a standard
purchasing model, Zonar also provides bundled package services. These bundled services
include subscriptions, installation, and hardware. Frost & Sullivan independent analysis
confirms that most of Zonar’s competition has not yet explored this flexible model of
business.
Zonar also offers unique integrations, such as video-based safety solutions for coaching
drivers. This service is accompanied by 24x7x365 technical support, with more than 90%
of calls answered within 120 seconds by customer care staff, which has access to business
advisories, industry knowledge, as well as technical expertise regarding application program
interface (API) and system integration.
Zonar also has a commercial vehicle compliance team that comprises former commercial
vehicle law enforcement and Commercial Vehicle Safety Alliance (CVSA) officials that are
available to assist customers with their compliance needs and questions. Some of the
customer feedback loop mechanisms in place include Zonar user groups, social media, and
executive and business reviews. Zonar utilizes this feedback to draw a better overview of its
operations, product roadmap, and all customer-facing initiatives. This results in increased
customer satisfaction and retention, as well as the adoption of innovative ideas from
customers.
Some documented customer feedback includes:

“Zonar has been a fantastic partner that works hand in hand with us to understand
customer needs and provide them with customizable transit solutions.” – CEO, National
Express Transit
“Zonar is our technology partner to ensure our customers receive reliable, safe and
trustworthy transportation, consistent and proactive maintenance on our fleet of vehicles
result in fewer breakdowns, increased safety and top-notch customer service. In fact,
Stout’s vehicle out-of-service rate is less than 2%...where the national average is nearly
21%. We have always celebrated our superior performance rating, and adopting Zonar’s
technology gives us the extra assurance to know our vehicles are working and our
customers are satisfied.” – Fleet Maintenance Director, Stout’s Transportation
“The most important benefits we have received from using the Zonar system are increased
driver accountability and improved customer service.” – Director of Transportation,
Colombus City Schools
Customer Ownership Experience
Many companies are now opting for Zonar Systems based on its solution offerings that
specifically meet fleet requirements. Thomas Built School Buses are equipped with Zonar’s
technology on the inside, with implementation on every Saf-T-Liner® C2 and other models
for easy monitoring.
“DTNA and Zonar continue to utilize their telematics partnership to revolutionize commercial
vehicle operation, which has resulted in enormous opportunities,” according to Dr. Wolfgang
Bernhard, Member of the Board of Management of Daimler AG. Knight Transportation a
provider of multiple truckload transportation services, and one of the country’s largest
company-owned tractor fleets has chosen to deploy Zonar telematics across its fleet for a
flexible and portable system that can help its drivers stay in touch, be more productive and
operate safer trucks. Knight also wanted a system that could grow with its needs, advance
as technology develops, and be affordable for its bottom line. Zonar Systems installed in
Razorback Transit buses provided higher efficiency, more accurate data, quicker response
times for maintenance, and less time compiling mileage reports - according to David Dunn,
Superintendent of Maintenance of Razorback Transit.
Brand Equity
Frost & Sullivan points out that telematics in the school bus ecosystem is a relatively niche
segment, and Zonar Systems has become synonymous with superior telematics in school
buses and child safety. Since around 24 million children in the United States ride school
buses every day, and there are still ever-growing security concerns among parents, a
comprehensive tracking solution has become a new necessity. California's Paul Lee School
Bus Safety Law requires all buses to be equipped with a “child safety alert system” by the
start of the 2018 to 2019 school year, and Zonar has partnered with Child Check-Mate to
provide these tracking solutions.
According to a recent study, Continental was ranked third in global OEM automotive parts
sales in 2012, and its majority investment in Zonar systems has helped Zonar achieve a

wider market reach. Owing to Zonar’s exemplary overall performance, long-lasting
relationships with OEMs and component manufacturers, Continental and Daimler Trucks
North America invested heavy stakes in Zonar systems. Frost & Sullivan believes that
DTNA’s (who has a 19% stake in Zonar) continuing vision to develop future vehicle
technologies — including connectivity, electrification, and autonomous driving — will only
help Zonar to expand its reach even further.
Conclusion
Serving an industry that transports more than 24 million school children and teenagers with
around 500,000 buses in the US alone takes high levels of commitment in maintaining
safety standards and procedures. Statistics show that children who use other means of
transportation are more prone to accidents compared to riding with school buses, which
puts additional pressure on school districts to ensure that school buses are indeed the safest
transportation mode. This extends further, to telematics service providers who use this
technology to achieve the same result.
Zonar Systems, with its comprehensive solutions to provide vehicle tracking and periodic
inspections, increasing driver productivity and fuel efficiency, along with its child check
systems and patented innovations using data mining and analysis, has become an integral
part of school bus systems across North America. The company’s methodology of
demonstrating new standards, such as a RFID tag system and various factors that make
fleet management systems electronically verifiable and seamlessly accessible, has helped it
establish a firm competitive position in both the school and transit bus transportation
industries. With over 90 patents in tracking technologies, as well as proven validation of
technologies, Frost & Sullivan research concludes that the Zonar Systems solution
addresses all the key logistical challenges in public and pupil transportation.
With its strong overall performance, Zonar Systems has earned the 2018 Frost & Sullivan
Company of the Year Award.

Significance of Company of the Year
To receive the Frost & Sullivan Company of the Year Award requires a market participant
to demonstrate excellence in growth, innovation, and leadership. This kind of excellence
typically translates into superior performance in three key areas: demand generation,
brand development, and competitive positioning. These areas serve as the foundation of a
company’s future success and prepare it to deliver on the two criteria that define the
Company of the Year Award (Visionary Innovation &Performance and Customer Impact).
Understanding Company of the Year
Demand, brand strength, and competitive differentiation all play a critical role in delivering
unique value to customers. This three-fold focus, however, must ideally be complemented
by an equally rigorous focus on Visionary Innovation& Performance to enhance Customer
Impact.

Key Benchmarking Criteria
For the Company of the Year Award, Frost & Sullivan analysts independently evaluated
two key factors—Visionary Innovation &Performance and Customer Impact—according to
the criteria identified below.
Visionary Innovation &Performance
Criterion 1: Addressing Unmet Needs
Criterion 2: Visionary Scenarios through Mega Trends
Criterion 3: Implementation Best Practices
Criterion 4: Blue Ocean Strategy
Criterion 5: Financial Performance
Customer Impact
Criterion 1: Price/Performance Value
Criterion 2: Customer Purchase Experience
Criterion 3: Customer Ownership Experience
Criterion 4: Customer Service Experience
Criterion 5: Brand Equity
Best Practices Award Analysis for Zonar Systems
Decision Support Scorecard
To support its evaluation of best practices across multiple business performance
categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool
allows our research and consulting teams to objectively analyze performance, according to
the key benchmarking criteria listed in the previous section, and to assign ratings on that
basis. The tool follows a 10-point scale that allows for nuances in performance evaluation.
Ratings guidelines are illustrated below.
RATINGS GUIDELINES
The Decision Support Scorecard is organized by Visionary Innovation & Performance and
Customer Impact (i.e., these are the overarching categories for all 10 benchmarking
criteria; the definitions for each criterion are provided beneath the scorecard.).The
research team confirms the veracity of this weighted scorecard through sensitivity

analysis, which confirms that small changes to the ratings for a specific criterion do not
lead to a significant change in the overall relative rankings of the companies.
The results of this analysis are shown below. To remain unbiased and to protect the
interests of all organizations reviewed, we have chosen to refer to the other key
participants as Competitor2 and Competitor3.
Measurement of 1–10 (1 = poor; 10 = excellent)
Company of the Year
Visionary
Innovation &
Performance
Customer
Impact Average Rating
Zonar Systems 9.5 9.5 9.5
Competitor2 8.0 8.0 8.0
Competitor3 7.0 8.0 7.5
Visionary Innovation& Performance
Criterion 1: Addressing Unmet Needs
Requirement: Implementing a robust process to continuously unearth customers’ unmet
or under-served needs, and creating the products or solutions to address them effectively
Criterion 2: Visionary Scenarios through Mega Trends
Requirement: Incorporating long-range, macro-level scenarios into the innovation
strategy, thereby enabling “first-to-market” growth opportunity solutions
Criterion 3: Implementation of Best Practices
Requirement: Best-in-class strategy implementation characterized by processes, tools, or
activities that generate a consistent and repeatable level of success.
Criterion 4: Blue Ocean Strategy
Requirement: Strategic focus on creating a leadership position in a potentially
“uncontested” market space, manifested by stiff barriers to entry for competitors
Criterion 5: Financial Performance
Requirement: Strong overall business performance in terms of revenues, revenue growth,
operating margin, and other key financial metrics
Customer Impact
Criterion 1: Price/Performance Value
Requirement: Products or services offer the best value for the price, compared to similar
offerings in the market.
Criterion 2: Customer Purchase Experience
Requirement: Customers feel they are buying the most optimal solution that addresses
both their unique needs and their unique constraints.

Criterion 3: Customer Ownership Experience
Requirement: Customers are proud to own the company’s product or service and have a
positive experience throughout the life of the product or service.
Criterion 4: Customer Service Experience
Requirement: Customer service is accessible, fast, stress-free, and of high quality.
Criterion 5: Brand Equity
Requirement: Customers have a positive view of the brand and exhibit high brand loyalty.
Decision Support Matrix
Once all companies have been evaluated according to the Decision Support Scorecard,
analysts then position the candidates on the matrix shown below, enabling them to
visualize which companies are truly breakthrough and which ones are not yet operating at
best-in-class levels.
High
Low
Low High
CustomerImpact
Visionary Innovation & Performance
Zonar
Systems
Competitor2Competitor3

Best Practices Recognition: 10 Steps to Researching,
Identifying, and Recognizing Best Practices
Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and
assess their fit with select best practice criteria. The reputation and integrity of the
Awards are based on close adherence to this process.
STEP OBJECTIVE KEY ACTIVITIES OUTPUT
1
Monitor,
target, and
screen
Identify Award recipient
candidates from around the
globe
• Conduct in-depth industry
research
• Identify emerging sectors
• Scan multiple geographies
Pipeline of candidates who
potentially meet all best-
practice criteria
2
Perform
360-degree
research
Perform comprehensive,
360-degree research on all
candidates in the pipeline
• Interview thought leaders
and industry practitioners
• Assess candidates’ fit with
best-practice criteria
• Rank all candidates
Matrix positioning of all
candidates’ performance
relative to one another
3
Invite
thought
leadership in
best
practices
Perform in-depth
examination of all candidates
• Confirm best-practice criteria
• Examine eligibility of all
candidates
• Identify any information gaps
Detailed profiles of all
ranked candidates
4
Initiate
research
director
review
Conduct an unbiased
evaluation of all candidate
profiles
• Brainstorm ranking options
• Invite multiple perspectives
on candidates’ performance
• Update candidate profiles
Final prioritization of all
eligible candidates and
companion best-practice
positioning paper
5
Assemble
panel of
industry
experts
Present findings to an expert
panel of industry thought
leaders
• Share findings
• Strengthen cases for
candidate eligibility
• Prioritize candidates
Refined list of prioritized
Award candidates
6
Conduct
global
industry
review
Build consensus on Award
candidates’ eligibility
• Hold global team meeting to
review all candidates
• Pressure-test fit with criteria
• Confirm inclusion of all
eligible candidates
Final list of eligible Award
candidates, representing
success stories worldwide
7
Perform
quality check
Develop official Award
consideration materials
• Perform final performance
benchmarking activities
• Write nominations
• Perform quality review
High-quality, accurate, and
creative presentation of
nominees’ successes
8
Reconnect
with panel of
industry
experts
Finalize the selection of the
best-practice Award recipient
• Review analysis with panel
• Build consensus
• Select winner
Decision on which company
performs best against all
best-practice criteria
9
Communicate
recognition
Inform Award recipient of
Award recognition
• Present Award to the CEO
• Inspire the organization for
continued success
• Celebrate the recipient’s
performance
Announcement of Award
and plan for how recipient
can use the Award to
enhance the brand

STEP OBJECTIVE KEY ACTIVITIES OUTPUT
10
Take
strategic
action
Upon licensing, company
able to share Award news
with stakeholders and
customers
• Coordinate media outreach
• Design a marketing plan
• Assess Award’s role in future
strategic planning
Widespread awareness of
recipient’s Award status
among investors, media
personnel, and employees
The Intersection between 360-Degree Research and Best
Practices Awards
Research Methodology
Frost & Sullivan’s 360-degree research
methodology represents the analytical
rigor of our research process. It offers a
360-degreeview of industry challenges,
trends, and issues by integrating all 7 of
Frost & Sullivan's research methodologies.
Too often companies make important
growth decisions based on a narrow
understanding of their environment,
leading to errors of both omission and
commission. Successful growth strategies
are founded on a thorough understanding
of market, technical, economic, financial,
customer, best practices, and demographic
analyses. The integration of these research
disciplines into the 360-degree research
methodology provides an evaluation
platform for benchmarking industry
participants and for identifying those performing at best-in-class levels.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth
and achieve best-in-class positions in growth, innovation, and leadership. The company's
Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined
research and best practice models to drive the generation, evaluation, and implementation
of powerful growth strategies. Frost & Sullivan leverages more than 50 years of
experience in partnering with Global 1000 companies, emerging businesses, and the
investment community from 45 offices on six continents. To join our Growth Partnership,
please visit http://www.frost.com.
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