Choosing a TMS Today: Measure Five Times, Cut Once?

Tags: Logistics I.T., Software-as-a-Service (SaaS), Transportation Management, Logistics Solutions Providers

David Landau is Executive Vice President, Cloud Logistics

We’ve all heard the adage “Measure twice, cut once.” Of course, the intent of this proverb suggests it is best to be sure you are cutting the wood in the right place before using your saw.

Since the creation of supply chain software, this advice has largely been followed when it comes to software selection. The wrong choice can cripple a company.

As a result, involved and lengthy software selection processes were rightly introduced to “measure twice” before cutting. Consultants would start by bringing 10-12 vendors to the table for an RFI process that would cut the list to three or four. By the time negotiations and legal reviews were finally completed, six to eight months might pass (not to mention considerable sums of money spent or time invested).

Times have changed—for software in general, and most especially for transportation management systems (TMS) in particular.

For roughly two-thirds of shippers, the focus is on improved efficiencies, execution, and visibility. For these companies, a modern TMS can be live and saving money within weeks or even days.

What Has Changed?

Company profile. For many years, the only companies that could justify a TMS were large shippers (let’s consider large to be a freight spend of $100M or greater). A 5-percent freight savings could justify an expensive 10-month project.

The technology changes previously mentioned are making TMS far more affordable for companies spending as little as $5-10M on freight each year. For these companies, 150-question RFPs and half-day scripted demonstrations are excessive and, frankly, unnecessary.

One company I know took a totally different approach. After a one-hour demo, the decision-maker asked to be able to do the next demo himself. What better way to get a sense for those “softer” parts of the solution than to get hands on? As a side note, if your software vendor is not willing to let you do this, or if they need a couple of weeks to prepare, that should tell you something as well.

Technology improvements. If company profile changes are the effect, technology improvements are probably the cause. Simply put, newer TMS vendors are able to leverage the latest innovations in technology to allow implementations to be faster and cheaper. A few examples include:

  • Cloud - Obviously, cloud technology allows environments to be stood up quickly and maintained at a low cost.
  • Agile development - Modern software companies do not follow traditional waterfall development cycles and don’t release only once a year. Modern companies should be releasing and upgrading at least quarterly (if not more often).
  • User experience - Great software should be obvious. This is hard to quantify, but if after the one-hour hands-on demo, your team feels like they can start running their operations, you know you’re on to something.

One Final Proverb

There is another woodworking proverb, dating back to 16th century England. “The best carpenters make the fewest chips.” For any craftsman, using materials wisely is crucial to running a profitable enterprise. Margin math is no different today than it was 500 years ago.

When selecting your next supply chain software solution, think about your process and make sure you don’t end up with more chips than product. You really don’t have to measure five times to get an accurate cut anymore.