During my days at the beach last week, I read an interesting article (“The Rating Game”) by Kevin Maney in the July/August issue of The Atlantic. Maney met with Rich Barton, the founder of Expedia, Zillow, and Glassdoor.com (where employees can rate their employers), and Barton shared his investment philosophy with him: “If it can be rated, it will be rated.”
Maney goes on to write: “…rating is about to spread like a pandemic. Everything—everyone—will get rated by Web users. You. Me. The dentist. All the hairstylists in town. The sermons in every place of worship. Youth soccer coaches. Lunch meats. Wine. The fact is, on tomorrow’s Internet, everyone will know if you’re a dog.”
This gets me thinking: can there—and should there—be a rating system for logistics software and logistics service providers?
According to the Pew Internet & American Life Project, “Twenty-six percent of adult internet users in the U.S. have rated a product, service, or person using an online rating system. That amounts to more than 33 million people. These systems, also referred to as ‘reputation systems,’ are interactive word-of-mouth networks that assist people in making decisions about which users to trust, or to compare their opinions with the opinions expressed by others.”
And this survey was taken back in June 2004! I’m sure the percentage has increased significantly over the past five years.
Of course, the process of selecting a transportation management system, for example, is far more complex than finding a good book to read this summer. And there are many more variables to consider when selecting a logistics service provider (3PL) than choosing a good Italian restaurant in the North End. But does this mean that a rating system of any kind wouldn’t be useful in the world of logistics?
These days, I personally don’t buy anything of significance without searching the Internet first for ratings and reviews. Earlier this month, for example, I needed to buy new tires for my Subaru Outback wagon, so I went online and found multiple websites with reviews and customer ratings. While the process was far from perfect—some customers would absolutely love a tire, while others would absolutely hate it—I did walk away with some useful information, like the importance of the tread pattern for all-wheel drive vehicles, that led me to quickly narrow down my choices (in case you’re interested, I bought Uniroyal Tiger Paw and so far, so good).
I believe a well-designed and managed rating system for logistics software and services could play a similar role—i.e., provide logistics executives with useful supporting information to get to a short list faster. The challenge is designing and managing such a system. How do you prevent, for example, a vendor from badmouthing a competitor’s solution, or from praising their own? These challenges, however, are not insurmountable.
What to rate is something else to consider. For example, rating the effectiveness of a TMS’s optimization engine is problematic because the complexity of transportation networks varies greatly between companies. But there are other factors where having ratings from many existing users would be helpful, such as:
- Ease of Use: Does a user need to click ten times and open three windows to accomplish a task, or can they do what they need with just a few clicks on a single screen? As I highlighted in a previous posting, usability is the next frontier for competitive differentiation in the TMS market.
- Solution Stability: Does the solution crash often, or during high-volume periods, requiring IT and the vendor to get involved? I recently spoke with a transportation executive who complained that every time their TMS goes down, their IT staff can’t fix it and they have to bring in the vendor because the application was built using a proprietary language.
- Vendor Responsiveness: Does the vendor respond quickly to problems? Are your requests for new functionality adequately addressed or are they consistently ignored?
Similar factors can be developed for rating logistics service providers. Again, I’m not saying logistics executives should rely solely on ratings to select a service provider, but such a system would provide them with additional insight and enhance the paucity of information currently available (see “Who is the Best Logistics Service Provider (3PL)?” and “In Search of a Smart 3PL Request-for-Proposal”).
Is there a need for a rating system for logistics software and service providers? Do you think it’s possible to develop a “well-designed and managed” rating system? What factors should be rated? If we build it, will you come?
Post a comment and let me know!
