What Makes a Great TMS?
Q: The transportation management system (TMS) market is growing rapidly. What is driving this activity?
COMRIE: Growth is coming from both shippers and logistics service providers. 3PLs are recognizing opportunities where they can affect change within their organizations by adopting TMS solutions that have more robust functionality. They now view transportation management technology as a means to differentiate their value proposition in the market and win new customers. TMS is no longer a back-office function.
3PLs abandoning existing TMS applications that they sank a lot of capital into demonstrates the value they place on transportation management and the quality of solutions currently on the market.
For shippers, the TMS market is finally coming into its own after 10 years of people saying it was low-hanging fruit. Senior management now sees the importance of transportation and the value of a TMS. With greater visibility, shippers understand how they can leverage this information internally as opposed to just outsourcing everything.
The bottom line for TMS buyers today is that it’s no longer a matter of cost. It’s about generating top-line revenue.
Q: The Software-as-a-Service (SaaS) deployment model has received a lot of attention because of its fast implementation and relatively low cost. Is the on-premise install out of fashion?
COMRIE: No, we’re seeing quite the opposite effect, in fact. Increasingly, shippers want to own and control software rather than have it hosted. As they become more sophisticated in terms of how they manage their supply chains, they can exploit information to extract greater value. With SaaS deployment, users lose that ability to mine and manipulate information that allows them to react to and execute change in a more sophisticated way.
It really boils down to preference. If buyers are looking for a transactional, no-strings-attached TMS, then SaaS is an ideal fit. But if users want the flexibility to configure a solution per their specific needs, strategy dictates an on-premise approach.
Q: What should shippers and intermediaries be wary of when evaluating TMS options?
COMRIE: The two primary concerns are ease of integration and data security. Shrink-wrapped TMS applications are common, so prospective buyers need to conduct proper due diligence when comparing different options. Can you make changes easily? Will the TMS properly integrate with an ERP system? In transportation, and when vetting TMS applications, the devil is in the details.