Telematics is simply the combination of telecommunications and informatics. It involves the collection of data from a fleet of connected vehicles and managing the data within a single platform. Telematics allows a company or a government agency with a fleet of vehicles to utilize a fleet management software to gather information such as the current speed of a particular vehicle, fuel consumption, the location of each vehicle, and even the overall health and productivity of their fleet.

One important aspect of telematics is vehicle tracking. This involves using a combination of GPS satellites, GPS receivers, GPRS such a cell phone network and a cloud server. The way it works is that a GPS receiver downloads information on its current location from GPS satellites, process the information using the vehicle navigation, and then transmits that information through GPRS to a cloud server. Using a mobile app or a web based application, a user can connect to the cloud server and view that information.

Another area that can benefit from telematics is in Insurance risk assessment. Telematics can be used to monitor the driving behaviors of policy holders. This can provide insurance providers with more accurate information to determine the risk factor associated with each policy holder and to adjust their premium accordingly.