On Demand TMS: A new reality in transportation sector
Over the past few years, we have come across variety of terms like hosted solutions, ASP (application service provider), Software-as-a-Service (SaaS). The basic idea shared among all such concepts is that rather than installing software on a server within the boundaries of the enterprise’s IT domain, the software resides outside the company’s walls by 3rd party service providers and delivered over web technology.
SaaS or “On Demand” generally implies a multi-tenant model, where multiple companies share a single/multiple instance of the software and associated hardware / infrastructure. It makes perfect sense for transportation processes to be deployed on SaaS mode as they are
- Inherently network centric
- Involve extensive communication and collaboration between different trading partners
- Standard workflows across companies and industries
On demand TMS is the latest buzzword in the transportation industry. They are developed on Service Oriented Architecture (SOA) platform to keep pace with recent developments in IT industry. On demand TMS definitely scores over traditional TMS in many key areas such as
- Incremental implementation (module wise) reduces initial cost overhead & ensures rapid deployment.
- Greater willingness to adapt to the application as on-demand TMS is perceived as a “service”, making buyers accept it as more standardized offering and demand less customization.
- Ready to use carrier connectivity enables providers to leverage existing carrier connections among common customers
- Collaborative transportation opportunities via benchmarking transportation processes across the industry.
- Strategic flexibility to “unplug” an on-demand TMS solution and switch to another service provider
- Additional advantages provided by on demand TMS providers like process consulting by domain experts, streamlining support escalations and guaranteed performance levels.
On demand TMS is definitely the way forward, but it does not pose an end to traditional TMS implementation as initial subscription cost in this model works out to be higher when compared to traditional TMS deployment. Only ‘vanilla’ configuration can be managed in such formats leaving little room for customer specific enhancements. Moreover, enterprise will always face the strategic risk of exposing company specific data to external world.
Corporate shippers should look at a two step approach to TMS implementation. Initial phase of TMS project should be delivered via on demand service provider, but later with better process maturity, the enterprise should move to in-house TMS deployment to appraise processes to next level and maintain more control over data.
Acknowledgments for inputs from - Nipun Lakhotia , OTM Consultant, Oracle Practice
- Ready to use carrier connectivity enables providers to leverage existing carrier connections among common customers
Comments
The blog is good. The explanation about the trend of On Demand TMS solutions is explained in brief and clear.
Posted by: Lakshmana Murthy K | March 15, 2010 7:36 AM