April 2007 | Commentary | IT Matters

TMS Shopping Made Simple

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During my 15 years as a transportation technology professional, I have stood on both sides of the trade show aisle—shopping for and selling transportation management systems (TMS). Navigating the technology marketplace, as I have learned, is no easy task. It can make purchasing a TMS downright frustrating.

If you are in the process of selecting a new system, however, there is no need to panic. You don't have to be a computer geek or an industry veteran to make a savvy purchasing decision. The following process will help you identify viable TMS candidates, create a meaningful Request for Proposal (RFP), and select a vendor that will deliver the functionality and results you need.

Make a List

Before going to the grocery store, you probably make a shopping list; searching for a TMS should be no different. Make a list of must-have functions and features before you begin surfing the Web or talking to prospective vendors. This exercise will help you keep sight of your goals as you browse the crowded aisles of the TMS marketplace.

It is also helpful to create a list of "nice-to-have" features. This will come in handy when comparing seemingly identical products.

You also need to determine basic selection criteria, which will help pare down your options. Do you want a hosted, on-demand solution or an off-the-shelf product, for example? Do you have hardware and/or software limitations?

As you will soon discover, TMS vendors are plentiful. Fortunately, many resources, including industry magazine directories and Internet search engines, will help you develop a list of potential providers.

Networking is another good form of research. Seek recommendations from fellow shippers, including your customers and business partners. While you may be drawn to some of the more recognized vendors, don't shy away from mid-size or niche providers who may be equally or better equipped to meet your needs.

The RFP is Key

Be sure to research each vendor and determine how closely their product meets your requirements. The idea is to create a list of eight to 10 viable candidates who will receive an RFP. Remember, the thoroughness of your research is reflected in the quality of proposals you receive.

Here are some tips for a successful RFP process:

Outline the exact capabilities you desire. Avoid the temptation to embellish your RFP with formal language or needless copy. Bullet points work well for listing your objectives and requirements.

Ask vendors to address each of your needs. Also, inform them of the criteria you will use to judge their responses.

Empower vendors to provide pricing and outsourcing options, but know your limitations. Would you consider a gain-sharing plan, or an outsourced arrangement with on-site vendor personnel? You may be pleasantly surprised by the wide array of options you receive.

Include pertinent information about your current operations. A vague RFP solicits vague proposals.

Understand your cash-to-order process, then illustrate your "as-is" and "to-be" operating models on the RFP. This information gives providers a solid understanding of your current operating procedures, and what improvements you hope to make. It is up to the vendors to show you how they can help you achieve those goals, and what is required.

Remain realistic about the outcome. No single provider is going to meet every one of your needs immediately. Give vendors the opportunity to identify which of your requested functions are readily available and which ones they will need to develop.

Your RFP should include a detailed list of current and future needs; ask candidates to categorize each as "available now," "available in the future," or "not available." Don't forget to ask about time frames and additional costs for functions to be developed in the future.

Give candidates time. Many shippers couple comprehensive RFPs with aggressive deadlines. If you ask for a two-week turnaround, chances are you will receive canned responses. Vendors need time to study your RFP and create a proposal that is tailored to your company.

Ask the Right Questions

Before you choose a TMS vendor, be certain you understand its implementation process and experience. A qualified vendor will be able to cite vast implementation experience, as well as a solid plan and realistic project time frame.

Ask for specifics about the implementation time frame, as well as associated costs and services. Is user training, for example, included in the price? What will your team be responsible for? What type of internal resources will you need for implementation?

Also, be sure to ask how long it will take before you achieve a return on investment. How will the system help you justify its purchase? Any worthwhile TMS must include a method for monitoring and measuring performance, both fiscal and otherwise.

The Final Few

Once you've reviewed the RFP responses, choose three or four final candidates for formal presentations and/or site visits. Now is the time to get down to details and thoroughly address any questions or concerns. It is also a good time to contact references—both new and longtime clients—to get a better feel for each provider.

Be sure to visit the candidates' customers, especially those who have business operations and requirements similar to yours. On-site visits give you an opportunity to see the technology in action, and speak directly with users to determine what they like and dislike about the system. Also, ask users about their relationship with the prospective vendor.

Although TMS shopping may seem like a daunting task, this simple yet thorough process will help you choose a vendor that is best suited to meet your company's needs.

The marketplace is teeming with TMS vendors, which means you are in the driver's seat. Remain vigilant and don't shy away from the tough questions. Take this opportunity to make a decision that will reap long-term benefits for your company.

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