Not All Clouds Have a Silver Lining – Why Cloud TMS Solutions Fail

Contrary to everything you’ve read in these pages in the past, cloud software is destined to fail your logistics and supply chain management initiatives; but not for the reasons you might think!  So many of the critical success factors crucial to the realization of supply chain automation goals are either accomplished (or not) during implementation.  While the solution is intended to be used for years, its success or failure is dictated by the quality (or lack thereof) of the groundwork lain during the scant 12 to 16 weeks at the beginning of the TMS program.

There are many providers of cloud TMS solutions but there are only three broad approaches to implementation.  Sadly, most cloud TMS providers adhere to two of these approaches.  Rare is the provider who subscribes to the third method.  Here’s a breakdown of the three implementation approaches widely encountered in the market followed by the bottom line.

Implementation Approach 1
Implementation fee is charged by the provider who essentially helps unpack the solution from the box and, after a cursory discovery period, provides the customer manuals on configuration and integration.  There is very little to no effort made to review the customer’s existing, underlying processes to determine how far they may diverge from best practices.  This approach also involves training and support fees in addition to implementation fees.

Implementation Approach 2
Implementation fee is charged by the provider who essentially helps unpack the solution from the box and, after a cursory discovery period, provides the customer manuals on configuration and integration.   While this approach includes training and support for the customer at no additional charge during the implementation period there is still very little to no effort made to review the customer’s existing, underlying processes to determine how far they may diverge from best practices.

Implementation Approach 3
 Implementation fees charged by the provider are utilized to actually perform deep-dives into existing business processes and practices to determine where weaknesses and deficiencies may rest.  Divergence from best practices are identified and remediated before the automation is applied.  Configuration and integration is performed with a keen eye towards ensuring that no sub-standard processes are codified into the solution and highly personalized training and support is delivered for the lifetime of the engagement by the same, dedicated staff members who were involved during the implementation period, thus providing continuity and familiarity to the ongoing maintenance and evolution of the solution.  No additional fee is charged for this level of training and support during implementation or at any point thereafter.

It is easy to see why most TMS providers apply implementation approaches 1 or 2 to all but their largest customers.  After all, it is a lot of hard work.  It is time consuming and labor intensive.  It does not allow for maximum profitability on the part of the provider.  But what it does enable is highly successful implementations leading to wildly successful TMS implementations.  And those lead to happy clients who act as brand evangelists because they’re so pleased with their results.  That leads to more customers for the provider who would rather take a loss in the short term in exchange for a devoted, profitable customer base over the long term.

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