In today’s increasingly fast-paced world, visibility and access to information are critical to supply chain management. One technology that is proven to increase supply chain visibility is a transportation management system (TMS), and both shippers and logistics providers seem to agree. According to a report, 52 percent of shippers and 21 percent of logistics providers rank TMS technology as a top IT priority for 2018.
As TMS technology continues to evolve, and a wide range of options available today, choosing the best system can be a bit daunting. As with many major changes in business, it is best to approach technology selection with a well- planned process.
Here are seven steps to a successful TMS solution selection:
TMS Solution Selection Step 1: Identifying the Issue(s)
It is important to understand the issue(s) or problem(s) the TMS is expected to solve as well as the circumstances that have led to a decision to invest in technology. Most software purchase decisions begin for one of three reasons:
The current system, manual or automated, is not producing the desired results or is filled with inefficiencies.
The company is going through a merger, acquisition, or divestiture, and it must re-evaluate or even consolidate its systems.
To align with strategy, such as growth, a company may need to upgrade its technology.
Regardless of the specific circumstances that have led to the purchase, maintain clear expectations about what the technology is going to accomplish.
The second step in the process is documenting the critical requirements (technical and non-technical) of the business. This will allow potential solutions to be identified, and those that are not a fit to be put aside. In this phase, it is critical that the voices of all stakeholders are heard. Include everyone who may have a role to play in the purchase, implementation, or use of the system, including IT, purchasing, finance, and possibly manufacturing or sales. This is also the time to document the current state versus the future state.
TMS Solution Selection Step 3: Build the Business Case
In many larger companies, simply identifying requirements is not sufficient, and a business case must be built and presented to various members of the executive team. At this point, it is best to have assessed the Total Cost of Ownership (TCO), including how, or if, the new technology will integrate with existing systems, how quickly the solution is expected to yield a return, and how long the implementation process is anticipated to take. This is also the time to thoroughly investigate one-time costs and ongoing costs as well as service commitments.
TMS Solution Selection Step 4: Demo Phase
Once a list of top contenders is developed, it is time to ask for demonstrations. If possible, customized demos based on a company’s own data are preferred. It is also important to ensure that the demonstration stays within the scope of the documented requirements. This will save time, avoid delays, and keep the process on track.
TMS Solution Selection Step 5: Evaluation Phase
As each demo is completed, it is important that all decision makers make notes and rate the vendor based on a pre-determined list of criteria. Relying on memory alone is not the best way to approach a purchase of this significance to a business. A running scorecard will be very helpful at this point.
TMS Solution Selection Step 6: Validation and Selection Phase
Once the demos are complete, the final selection often comes down to two or three finalists. If there is little differentiation from a quantitative perspective, it may be important to factor in whether the TMS is scalable or if regular releases or enhancements are planned. The way that the vendor’s team responds to questions and requests during the evaluation phase may be a good barometer of what can be expected in terms of customer service going forward.
The real fun/work begins after a selection is made. To ensure the chosen solution is a success, buyers should keep the momentum on the project moving forward from selection to implementation to integration. Keeping all stakeholders apprised of milestones and progress will go a long way towards getting high-fives from co-workers, rather than pointed questions like, “Who picked this clunker?”
As the JOC white paper stated, the transportation industry is rapidly moving in the direction of greater use of technology, and specifically TMS solutions. The steps listed above can help buyers navigate “the road ahead” with the destination being improved business results, while avoiding wrong turns and potholes along the way.