SaaS 2.0: How the Logistics Industry is Driving an Evolution in Software-as-a-Service

The software-as-a-service (SaaS) model has been widely embraced thanks to the numerous advantages that on-demand solutions deliver to multiple industries. Logistics-intensive organizations, however, were among the first to turn to SaaS to reduce costs, increase operational performance and improve customer satisfaction. As the need for connectivity, collaboration and compliance grows, many members of the global supply chain now realize that SaaS in the logistics market can offer far more than “rented” application software when connected to a “federated” network comprised of several communities (such as airlines, ship and truck carriers, government agencies, logistics providers, etc.), each with a common interest.

Consider the next evolution of SaaS as business social networking for the supply chain – SaaS 2.0, if you will. Leveraging a federated network, SaaS 2.0 extends the value that traditional on-demand solutions offer by not only providing pay-per-use access to applications that businesses need to manage their supply chains, but by also bringing together and enabling multi-party collaboration between logistics service providers, supply chain partners, carriers, customs agencies and customers from around the globe.

Combining SaaS logistics applications with a federated network helps participants build communities, readily connect with trading partners (already connected to the network), and transition beyond the simple interchange of information. In this scenario, SaaS logistics applications and a federated network combine to support multiple multi-party processes and connections within a single environment on a global scale.

The logistics network

A logistics network is a highly complex “organic” group of trading partners that perform any of a wide range of logistics-related business functions (e.g., freight forwarding, customs compliance, etc.). Many industry players have become seasoned users of SaaS applications that pertain to specific functions in order to speed delivery, streamline processes, and reduce errors and complexity.

As supply chain processes become more complex, the need for partners to work together, be more efficient, and keep pace with the latest legislative requirements regarding advance notification, securing trade lanes, chain of custody, accountability and the automation of paper documentation continues to grow. SaaS 2.0, for its part, brings a blend of Hardware, Software, Networks and Business Services to enable multi-party workflow-based applications that need to be shared by thousands of companies on a daily basis.

In the past, SaaS applications tended to serve a specific business function (e.g., order processing, transportation, warehousing) or vertical (e.g., manufacturing, healthcare, pharmaceutical). Today, a SaaS 2.0 platform, such as the Descartes Global Logistics Network (GLN), serves as “all things to all people” by connecting the entire community of logistics service providers and trading partners through a single polymorphic federation.

This state of being united and leveraging multiple network applications through a global network promises to take the industry well beyond its reliance on standalone solutions and individual transactions. Rather, this approach delivers a wealth of advantages, including standardization of documents and data, increased automation of routine functions, and easy accessibility to real-time information for all partners.

It also provides an opportunity for customer intimacy and the prospect to make more money; facilitates operational improvements to dramatically lower the cost of doing business; and ensures compliance to keep up with an increasing number of regulatory changes around the world.

By bringing applications and the trading community together, there are no longer any communication barriers between manufacturers, retailers, carriers, government agencies and other stakeholders. As a result, when one party generates information or implements a change, that data can be disseminated throughout the relevant members of the community in real-time.

Driving the evolution of SaaS

Given the complexity of global trade and the information that must be communicated, it comes as no surprise that the logistics industry is among the first to venture into the concept of SaaS 2.0.

This ability to unite disparate business processes represents a pivotal shift in global logistics practices. The convergence of functions is now taking the logistics industry from a cost-savings oriented mentality that focuses on functionality, integration and risk reduction, to a compliance-oriented one that drives innovation and business networking through automation and real-time access to information.

As we look ahead, SaaS 2.0 will provide the foundation for delivering the next big thing in logistics – the ability to track and manage all elements of the global supply chain (Global Trade Management, Supply Chain Execution and Mobile Resource Management) through a single resource, while collaborating seamlessly with supply chain partners.  Undoubtedly, the impact of this evolution will be felt by carriers, logistics service providers, customs filing agencies, and of course supply chain operators such as manufacturers, distributors and retailers. Now is the time for members of the global supply chain to prepare for what lies ahead by embracing SaaS 2.0 today.

Art Mesher is the Chief Executive Officer of Descartes where he oversees the company’s marketing and sales, product development, network operations, and customer and corporate services, with direct responsibility for the executive management team.  In his 25 year career, Mr. Mesher has emerged as one of the foremost pioneers, business developers and thought leaders in the logistics industry.  Notably and most recently, Mr. Mesher was selected as the 2008 Council of Supply Chain Management Professional’s (CSCMP) 2008 Distinguished Service Award recipient. The CSCMP Distinguished Service Award is presented annually to an individual who has made significant contributions to the art and science of supply chain and logistics management.

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