Five Key Questions to Ask a Vendor Before Buying Supply Chain Software
Cloud-based systems have changed the game for software in the supply chain, and their benefits are being applauded at every level of the spectrum. It puts software development into the hands of technology professionals and allows supply chain providers to continue focusing on their core competencies. This means that supply chain providers have access to up-to-date, business-wide systems without the expense and implementation hassles associated with in-house development.
But when considering a new cloud-based logistics suite, what questions do you need to ask a potential service provider? How do you confirm that their promised functionality is what you need to future-proof your organization? Are they the right partner to match your corporate culture and governance requirements?
Historically, logistics software has largely evolved from the efforts of entrepreneurial freight forwarders and warehouse specialists. Their aim was to build tools that underpinned their relationships with crucial customers and this software expanded over time into applications suites for the broader marketplace.
The influence of this background on current product development and the transparency of vendor/customer relationships needs to be explored in any tender assessment. So, before you jump on board with a vendor, find the answers to the following key questions so you can confidently consider your move.
- Does the software vendor understand your business and meet your needs?
Whether your focus is broad or narrow, your logistics Software-as-a-Service (SaaS) must be flexible to support your business. A good software developer will know your sector in detail, with years of experience working with supply chain providers of all sizes, across all sectors. Ask if they’ve come across your obstacles, your workflow requirements, your challenges, and whether they’ve built solutions to these issues into their product. When considering which vendor to partner with, big isn’t always better, but big experience certainly is.
- Will you be empowered by the software partner or locked in?
Has the software developer simply scrambled to put their on-premise software on the market as a hosted solution? Or is it a true cloud application where the software and commercial models have been created specifically for industry-wide capabilities and hassle-free operational integration?
True cloud solutions are the way forward. They’re capable of being switched on without months of costly implementation services, intuitive to use for rapid adoption, and have a low lifetime cost through being both flexible and scalable. SaaS developers commit thousands of hours to building tools that are tested and proven before you flick the switch. You can tailor it without incurring the costs or delays of development time, and you only have to subscribe for as long as the service is delivering value.
- Is there any conflict of interest—who owns the software company?
Review the majority equity owners of the software company and look at the key management staff. Is there any conflict of interest between you and the software developer or the company that’s hosting your data? Do they have co-responsibilities across a forwarder business unit and the software solution provider? Even if it’s not structurally blurred, appreciate the impact of the degree of separation between the two operational units. Do you feel comfortable with your service provider and competitor being one and the same?
- How healthy is the vendor?
No one makes the considerable step to change IT systems lightly. It’s very important that the supplier you choose is going to be with you for the long haul. Drill into the financial strength of the organization, its reputation in the marketplace, and its stated directions for product development.
- Is the vendor looking to future trends?
Ten years ago, who would have thought automated processes and electronic documents would replace the paper pushing of customs compliance? Logistics is constantly evolving and e-tail, productivity enhancement tools and logistics devices-as-a-service are positioned to become the next game-changers. You want to partner with a provider that proactively creates technology solutions for the future. Quiz them on where they see the industry heading and how their product development plans will deliver new capability ahead of industry trends. What it comes down to is this: ask them what you don’t know!