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Transportation management systems and the cloud

A cloud-based TMS provides many benefits.
/ Industry News & Trends /

By: Phil Sneed

Cloud computing has revolutionized the way businesses in every industry operate on a daily basis. These changes have even impacted the transportation industry, especially when it comes to transportation management systems.

A TMS is critical to the daily and hourly functions for delivering goods from point A to point B. Instead of relying solely on human knowledge, a TMS serves as a logistics management hub in a collaborative network of carriers, shippers and customers.

The TMS then aids in the interactions between the order management system, warehouse management system and distribution center.

As one might imagine, this involves a lot of data and supplementary information, not to mention the TMS itself.

Enter TMS and the cloud, tools that may prove extremely helpful for those involved with the logistics management chain.

What is the cloud?
Much of the population has likely heard the term "the cloud" used heavily in recent years. Information is not actually stored somewhere in the sky, but rather, someplace not in your business.

As technology website Re/Code explained, cloud computing is the idea of running software on the Internet, instead of locally. This means companies just need a web browser to access the program, either on a desktop or mobile device.

Benefits of the cloud
Cloud computing offers many benefits, starting with the ability to seamlessly integrate with existing enterprise resource planning systems.

The next benefit when using a cloud-based TMS revolves around storage and hardware.

A TMS program utilized through the cloud does not need to be installed anywhere because everything is accessible over the Internet. This means that in the offices of a shipper, if one computer fails, the TMS can still be accessed on another.

But using a TMS also entails collecting a lot of data. This information can come from many areas, from preferred supply chain routes to regular orders. Cloud computing enables this data to be stored on servers elsewhere.

"Utilizing a cloud-based TMS also offers many cost benefits."

No longer will businesses in the transportation industry have to spend large amounts of money on high-end computers or data storage options.

Cost advantages
Utilizing a cloud-based TMS also offers many cost benefits, other than not having to buy expensive equipment.

Costs are more predictable because companies are essentially renting the TMS by paying either a monthly or yearly subscription to the provider. Depending on who is providing the TMS program, the subscription price can be quite low, according to a list put together by the comparison website, Software Advice.

Internally, a carrier or shipper can save further by not having to develop a dedicated IT department. While it will always be beneficial to have someone on staff who can troubleshoot difficult computer and network issues, there is no need to have a large IT staff with regards to maintaining the TMS. This is because when utilizing a cloud-based program, all of the technical aspects are handled by the software developer.

But most importantly: A cloud-based TMS offers a faster return on investment.

Life made easier
Companies that have experienced data failures or other issues relating to a TMS have likely suffered setbacks trying to get their operations back in order. Even worse, some data may get lost when trying to recover from any type of failure.

The ease of ownership is made easier when utilizing a cloud-based TMS because the developer is in charge of everything, including security. While companies should always back up their data, disaster sometimes strikes.

When utilizing a cloud-based TMS, disaster recovery is made easier because the provider can, and will, help. Businesses will no longer be crippled and find themselves unable to operate because any significant downtime can harm a company's profits and reputation.

Finally, a TMS that utilizes the cloud helps companies connect with supply-chain partners in real time. Companies can therefore collaborate to fix any potential issues.

"A TMS that utilizes the cloud helps companies connect with supply-chain partners in real time."

Life can also be made easier because the developers of a cloud-based TMS will periodically update their software to introduce new features and enhancements. While change is sometimes not warmly welcomed, future updates may provide even more benefits to the transportation industry that further saves on time and money.

Potential downsides
There is no denying that a TMS based in the cloud will provide benefits. However, companies should also weigh potential downsides, especially since it revolves around such an important piece of software.

Even though cloud computing has rapidly expanded, concerns still linger about security. When it comes to cloud software, multiple users typically share space on a server. If data is not protected or encrypted, a competitor may be able to look at this information and gain a competitive advantage.

And while a cloud-based TMS offers flexibility as to where you can use the software, companies can find themselves locked into the cloud-only solution, meaning they will likely not be able to transition to an on-site TMS solution.

Similarly, while upgrades can be helpful, they can just as easily introduce new challenges for a shipper or carrier.

Questions to ask
A cloud-based TMS provides many benefits to its users, but the disadvantages must be weighed. If a company is contemplating a switch, they must treat this like any other business decision.

Companies in the market for a TMS cloud solution should take some of the following questions into account when looking at providers:

  • What is the recurring subscription price?
  • How is maintenance handled?
  • What is the system's uptime objective?
  • How is the data secured, and what type of restrictions are there?
  • What happens if something occurs at the data center where everything is hosted?
  • Can the product integrate with existing applications?

The trucking industry shouldn't dismiss the notion of a cloud-based TMS because it does offer many benefits. Advantages include reduced costs and a lower reliance on on-site hardware. This type of flexibility can enable companies within the trucking industry to respond to new trends as they see fit.