Understanding the ROI of Your Cloud-Based TMS
As the functionality of transportation management systems (TMS) continues to grow, so does the return on investment (ROI) that comes from using one. However, some users may not fully understand the value offered by their TMS. Without understanding the full potential of the solution, it’s possible that some users may not be reaping all the benefits their TMS has to offer.
Fortunately, as far as logistics-related software goes, the benefits of TMS solutions are relatively simple to grasp and explain. In this post we’ll show you how your TMS not only pays for itself, but also how it offers a demonstrably positive impact on your bottom line.
Perhaps the most obvious benefit of a transportation management system is its ability to easily optimize routes, digitize and minimize paperwork, support regulatory compliance, manage delivery and docking schedules, and more. Before the days of the TMS, these functions were all manually tracked through a series of spreadsheets that needed to be constantly updated with the latest information.
Enter the TMS. Our routes are now time and fuel efficient by default. Bills of lading and other relevant paperwork are generated in seconds. We know immediately if drivers or customers run the risk of legal violations. We can track cargo visibility, confirm deliveries, and perform countless other features at the touch of a button. A quality TMS can integrate with other programs, such as ERP solutions, warehouse management systems, and accounting software.
Tedious administrative tasks that once took a whole department of transportation specialists now happens seamlessly in the cloud—and they largely function automatically. This level of efficiency is a major profit driver for any transportation stakeholder.
Economy of Scale
TMS solutions used to involve large-scale hardware investments and significant development to create a functional proprietary solution. These investments were so prohibitively expensive that only the largest shippers and providers could justify investing in transportation management systems. But those days are gone.
Cloud-based software not only eliminates the need for on-site or rented servers, but it allows users to pick and choose the features they need, and to scale them up and down as necessary. With a cloud-based TMS, the upfront investment merely consists of a monthly or annual subscription fee – a fee that is easily offset by the cost savings users see from the efficiencies discussed above. In addition, implementation time typically occurs within weeks instead of months.
Instead of trying to break even on the costs surrounding a TMS implementation, cloud-based solutions allow shippers and logistics providers to realize savings that quickly and drastically outpace any initial or ongoing investment. As such, the width of the ROI window is now much wider than it was at the dawn of TMS technology.
In a business landscape obsessed with data, the TMS realm does not disappoint. Shippers and logistics providers can track a wide range of data under the umbrella of one solution, including (but not limited to):
- Deadhead/backhaul percentages
- Fuel efficiency
- Driver performance
- Carrier performance
- Regulatory compliance
- Freight charges
- On-time delivery percentages
- Equipment utilization
- Freight payment
- Route optimization
The useable data gathered by a TMS is nearly limitless. Shippers and logistics providers can lean heavily on this data as they seek to identify areas for improvement.
To fully recognize the ROI provided by a TMS, new users should conduct an audit and establish a baseline for later reference. Consult with your logistics software provider to see which areas you can expect to see demonstrable improvement, so you can make an informed comparison about your TMS performance and the ROI that it brings to the table.
360data, a member of the WSI family of companies, offers more than 50 years of experience in the logistics technology sector. Our solutions offer seamless integration with other popular B2B software, helping you to leverage maximum ROI from all your technology. To keep up to date with the latest in logistics technology trends, be sure to keep tabs on our blog and follow us on Twitter.
If you have questions about our suite of solutions, or about the ROI offered by our transportation management system, please don’t hesitate to contact us.