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Jan 19

Robust Transportation Management Systems Are Now In Reach Via The Cloud

Through a simple Internet connection, your company can reap the rewards of a cloud-based Transportation Management System (TMS).  Offering fast deployment, advanced applications, and rapid return on investment (ROI), a cloud-based TMS can streamline supply chain operations and save significant time, costs and resources over traditional on premise TMS solutions.

Small and mid-sized shippers with limited budgets and resources can now optimize transportation operations and gain sophisticated capabilities by implementing a cloud-based TMS.  With no requirements for hardware or internal maintenance, rapid onboarding of customers, carriers and partners, a cloud-based TMS offers rapid deployment—which means reduced cost of ownership.

Cloud-based TMS can be easily scaled as companies grow their business.  Capacity can be resized to accommodate growth and increases in demand.  Users and business partners can access applications and share data on a 24/7 basis from any secured Internet connection.

Why Make The Move to Cloud TMS?

With the many benefits offered by cloud-based TMS, supported by new offerings from best-in-class TMS providers, adoption of this next generation supply chain solution continues to grow. Below are just some of the reasons shippers of all sizes are making the move to cloud computing.

Fast Deployment

Without IT or hardware requirements and the ability to complete system configuration and training through a browser, cloud-based TMS implementations can be completed much faster.  MavenWire, a leading consultancy for supply chain management, offers a rapid deployment model allowing customers the ability to utilize their investment in as little as 2-3 months. Traditional TMS deployments can take upwards of one year, with the need for ongoing troubleshooting and continuous improvement.

Greater Flexibility

A cloud architecture makes it easier for users to quickly expand or scale back capacity for new applications and processes

as well as to add or subtract users and business partners to meet changing business requirements.  No need to worry about having to upgrade hardware or replace outdated systems or over investments in a TMS.

Lower Start-Up Costs   

Without the upfront capital expenditure to buy hardware or the need for an expanded IT team, shippers and logistics service providers pay for only what they use in a cloud-based TMS solution.  Robust TMS packages are offered through subscription plans that can be allocated as a monthly operating expense vs. an upfront capital cost and on-going maintenance.

Rapid ROI

Faster deployment offered by a cloud architecture means return on investment comes significantly quicker. The recognition of ROI for cloud-based TMS solutions can be as fast as 10-12 weeks.

Continuous Improvements

As a cloud-based TMS adds new enhancements, new functionality is immediately available to users.  Compared to seamless upgrades on the cloud architecture, a traditional TMS could become quickly outdated or require continued investment and effort by the user to maintain upgrades over time.

Globalization

Many cloud-based TMS solutions ensure compliance with import/export regulations while providing real-time visibility across the global supply chain.  Carriers and suppliers already established on the cloud can be leveraged to support both global and domestic operations.

Types of Cloud-Based Services

Choosing whether to host your own IT environment and running in-house or contracting space on via the cloud typically comes down to cost, customization and security.  Here are the differences between the two most popular cloud offerings:

Cloud  

A cloud infrastructure is managed by a third party organization.    Most cloud-based TMS are offered as part of a package from a third party partner with applications and user interfaces available “out of the box”.  Different cost structures apply based on freight spend, usage, and contract length.

In-House  

While the infrastructure is typically maintained by an individual organization, it still can be managed by a third party.  A company may opt to contract with a third party system integrator that offers a managed service configuration off site and is fully managed to their requirements. Configured by experts, the TMS environment is often offered at a fixed price with flexible payment options.  If maintained on site, cost savings may incur over the long term but internal expertise is required to maintain technology.  TMS customization and or need to access the database is more prominent in these configurations.

Pros and cons exist with each infrastructure option.  While a cloud TMS typically provides a pre-configured set of applications and user interfaces that are ready to go right out the box, an in-house environment typically offers more configuration and customization options to the user who may want to pick and choose as well as tweak the TMS application, without paying for forced upgrades.  Hosting subscription fees also vary by provider.

Shippers should investigate the benefits and costs of each option to determine the one that best supports their business requirements and budget.

Considerations Before Moving to the Cloud

According to a recent survey conducted by IDG Research, 49% of executive-level managers think cloud computing will transform their business, yet many businesses have been slow to adopt the cloud because of a range of concerns. Like any new innovation, cloud computing is a good choice for some organizations and not as viable for others.  Below are some factors to consider before making the move to a cloud-based TMS.

How much will the cloud cost?

Determine the “real” total cost of ownership. If planning to use a TMS for a long time period, paying upfront licensing and installation fees may be smarter than opting for monthly subscription fees. Determine the anticipated cost of ownership by factoring in subscription costs (and any increases indicated in the contract), maintenance and support fees, implementation costs, and other payments that will impact your firm’s bottom line.  Do an “apples to apples” comparison of costs between cloud-based option(s) and a traditional licensing arrangement that may also include licensing, maintenance and upgrade fees.  Look at the specific details of each TMS offering and avoid getting swayed by general statements in the ‘cloud vs. licensed’ argument.  Once you’ve crunched the numbers, use the results to make the smartest decision for your firm.

Does the cloud align with your organizational goals?

Are you seeking a new deployment model to gain or expand capabilities?  Do you want to be able to extend your TMS to customers or additional business units within your organization?  What TMS delivery choice best meets corporate strategic goals?  In addition to addressing corporate goals, it is important to determine the governance model for the TMS.  Who will be responsible for the implementation and daily administration of the TMS?  Will the internal IT department be managing certain tasks or will it be outsourced to a third party?  The internal supply chain department, third party consultant and IT department must be aligned with the TMS strategy to ensure they are working together and support its successful implementation and ongoing use.

What is the level of support?

This is a particularly important point for smaller users that lack internal IT resources. Ask upfront about support and associated costs.  Will you get the same level of support

as larger users and who will provide that support?  Will you receive support during application configuration and rollout?  Many partners offer different levels of services to meet varying and increasing needs. Look very carefully at your offerings and how well it meets (and how well it will meet) your organizational support needs.

Understanding risk. 

As with any Internet-based application, a cloud-based TMS holds risk should the computing infrastructure go down.  As extended downtime can crippled this mission critical application, customers should consider vulnerabilities associated with in-house vs. cloud.  Ask your provider their statistics and SLA regarding uptime and what security measures are in place so your sensitive data is secure. Ensure your supply chain partner understands your data privacy and security needs.  Should a long-term problem occur, do you or your provider have a discovery recovery and/or backup plan so data can be retrieved/restored until the primary system recovers?

Are applications readily available?

Does the TMS solution address all your needs or will you need to add to its capabilities?  In the case of some Cloud TMS vendors, much of the solution – user roles, menu options, reports, planning parameters – are preconfigured for users for quick start up.  Ask yourself if you want an out-of-box solution or want to spend the time configuring applications to meet your needs? If you are looking for a turnkey solution, ensure you pick the right vendor and implementation partner to work with – rather than just focusing on delivery methods and/or deployment times.  Ensure your TMS is the right size that fits viagra belgique sans ordonnance your business needs today and is scalable to meet future needs.

Cloud computing as the next generation in TMS solutions opens the door for many small to mid-size shippers and logistics service providers to take advantage of capabilities previously out of reach while reducing costs and expanding capabilities for mid- to large-size shippers already using some sort of TMS.  While initial cloud-based setups may be faster than that of a traditional licensed software purchase, and where tax advantages of writing off a monthly subscription-based license versus a one-time software purchase may be compelling, understanding the risks and total costs are important before making a move to the cloud.  Take the time to understand all of the options and answer the questions posed in this article to start the process.  Whether looking for a turnkey solution or a more customized approach, you’ll get the best results when you put time into choosing the right TMS solution and implementation partner to support your long-term goals.

Stay tuned as MavenWire expands on Cloud TMS.



 

Thomas Deakins

Thomas A. Deakins is Vice President of Global Business Development at MavenWire. Thomas has over two decades of experience in the field of Supply Chain Management, functioning in many capacities to include sales, design, product management, product marketing, and client relationship management. Thomas has worked for several distinguished companies including TMW Systems, Oracle Corporation, G-Log, SAP, Chep, and JB Hunt Transport. Thomas is a graduate of the University of Tennessee-Knoxville (Logistics & Transportation). Thomas and his family reside in Farragut, TN.

 

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