by JP Wiggins
I’ve been in the TMS software industry for more than 30 years, and today’s environment is more complex than ever. In this series on the do’s and don’ts for a successful TMS system implementation, I’ll discuss some of the best practices – and pitfalls – that commonly effect TMS projects.
The TMS was initially created to address a few fundamental business issues:
- Route and rate the orders
- Execute the shipments and loads
- Settle the financials around the freight bills
Back then, there were only a handful of organizations that called themselves TMS companies.
Today, the term TMS is applied to countless types of companies, including software companies and logistics service providers. TMS software can be used for any or all modes and any or all geographies, and it can be used for shippers, carriers or transportation intermediaries. Within those categorizes there are smaller niches, and within those niches are providers that focus on different customers of different sizes.
Narrowing your options
The simple act of defining a TMS company is difficult because there’s no defined terminology for buyers to refer to. Have you tried looking online for the right TMS? It’s overwhelming, as there are very few suppliers that classify themselves, it’s hard to find two systems that address identical markets, and most companies are not competitive with most of the others.
There are not going to be many TMS organizations capable of addressing any buyer’s needs well, so this should lead you to look very hard to find as many providers as possible. This is a very important market dynamic to understand, and it’s important to figure out who really meets your needs. Most likely, you would be well-served by just a few providers – and that number is probably between three and six. Then, one or two providers usually clearly emerge as much better fits.
I will discuss the details of narrowing your options in future posts, as this is too large and complex to cover in this piece. For now, these are my key takeaways:
Advice #1: Spend more time up front to find potential providers than you would on most software searches.
There’s one very important statistic to think about when looking for a TMS. Industry analysts have reported that a huge number of TMS implementations fail because they never go live, or get turned off, or don’t deliver the expected benefits. And this often happens simply because the buyer hasn’t even spoken to the one or two vendors who could make them successful. Instead, they picked a few companies from their initial search and just picked the best one from the group. So the buyer missed the three to six companies that would have served them well. More commonly, the one or two providers who could be very successful are not even contacted.
Advice #2: Be wary. Implementing a TMS is hard.
Buyers who don’t realize the risks and don’t spend enough time looking for the right vendors are much more likely to fail. We at 3Gtms find that second- and third-time TMS buyers ask a lot more questions and a lot tougher questions than first-time buyers. They know that underestimating the challenges around selection and implementation of the TMS can result in a failed implementation – and failed implementations are very costly.