A recent article by Transport Topics’ Seth Clevenger inadvertently underscores the extent to which many transportation departments are way behind the times when it comes to the use of technologies for supply chain logistics management. The article, “Execs Weigh Pros and Cons of Cloud Computing” was a short piece long on misguided ideas about why, when and how to leverage logistics IT solutions. Let’s break it down and inject some reality into the discussion.
The piece begins by noting that cloud computing has grown very sophisticated but suggests that there are many functions that are better off remaining hosted on-premise. One transportation professional is quoted as saying his company hadn’t moved any of its core business processes to the cloud out of concern for data security. A spokesman for a well-known technology provider remarked that in his experience, many would-be buyers of cloud technology solutions are buying software with no knowledge or regard for service level agreements pertaining to data security and availability.
It is even suggested by the transportation pro interviewed for the article that while functions like email are “ready for the cloud”, cloud-based solutions are not yet ready to effectively manage activities “closer to the core” of business operations. It could be argued that this statement reflects a profound misunderstanding of the current state of contemporary Logistics IT solutions. For a key stakeholder in any supply chain or transportation department, the best available options for automating transportation planning and management processes are categorically delivered via the Software as a Service (SaaS) or “cloud-based” model. All the leading TMS, YMS and optimization technology solutions are in the cloud (or are formerly hosted solutions that have been “web-enabled”) and instances of data breach, corruption or loss are rarely if ever encountered.
Many of the legacy providers of logistics IT solutions – the most venerated names in the industry – were built originally as hosted/on-premise solutions and have been “web-enabled” to operate in a cloud environment. This renders those solutions far less flexible than those solutions designed from inception to be cloud based.
This lack of horror stories issuing from the annals of cloud-based transportation management solutions can be attributed to the evolution of robust service level agreements (SLA) on the part of cloud software providers. It misses the point to suggest that because some buyers don’t perform adequate due diligence with respect to SLAs and end up with unreliable cloud solutions, that the entire cloud delivery model for TMS and other logistics IT solutions isn’t ready for prime time. Like any other purchase, the maxim “Caveat Emptor” or “let the buyer beware” is equally relevant to the procurement of a cloud-based TMS platform. Moreover, all but the smallest startup logistics IT solution providers maintain detailed SLA documentation which is part and parcel of any provider’s proposal and/or statement of work documents.
About the only valuable and objectively accurate pieces of advice proffered by the subject matter experts interviewed in the TTNews piece are the following. It is noted by one interview subject that much of the core software in use today was built before the cloud was in place. This is sadly, true. Many of the legacy providers of logistics IT solutions – the most venerated names in the industry – were built originally as hosted/on-premise solutions and have been “web-enabled” to operate in a cloud environment. This renders those solutions far less flexible than those solutions designed from inception to be cloud based. The technical architecture of a cloud native solution will always provide a better user experience.
The other nugget of value was a statement noting that the days of making one-time purchases of software are long gone. The interview subject rightly notes that buying SaaS solutions essentially requires the customer to upgrade according to the provider’s schedule. While this may seem off-putting to customers’ IT departments, in reality, it allows the tool sets to mature and grow with the changing marketplace. This is one of the key strengths of the Cloud-based delivery model. You’re buying a solution that improves and matures over time, helping your transportation organization to achieve and maintain competitive advantage.