You probably have a list of standard technology questions you ask potential logistics service providers. When you’re evaluating the technology of various LSPs, you can separate fact from fiction by asking a few simple questions. When pursuing a solution that obviously incorporates technology services it’s natural to investigate the provider’s technology. What surprises many companies is the importance of a provider’s technology even when the solution appears to not be technology-based. It’s an increasingly complex and interconnected world out there and an underperforming partner can significantly hamper your ability to take best advantage of it. Luckily, it’s easy to know whether a provider is well qualified.
When evaluating a provider’s technology, I recommend asking five essential questions. You will likely find additional value when you add these questions to your RFP — you’ll get better data to make a more informed decision.
- What does visibility really mean to the logistics service provider? Can you see your shipments’ status at any point in the process? Is transportation data integrated the next day, or can you get updates throughout the day? The answer could mean the difference between your ability to head problems off before they start, or the imperfect scenario of reacting to problems with day-old data. Also ask how easy is it to collect the data, interpret the findings, and analyze the metrics. Does the technology platform work the same way in every region where you do business? Do they offer global visibility, and can they demonstrate it? Visibility, especially global visibility, is essential to helping you proactively mitigate risk. With visibility, you can also track and trace worldwide without information gaps.
- Can they customize their tools to meet your needs? As you know, the ability to tailor a technology to suit your business is huge. Do you really have the time or resources to alter your business processes to fit your provider’s technology? The answer is probably no, and you shouldn’t have to. Make sure you ask detailed questions about the extent to which you can configure the technology to your specific needs. With a customized approach, you can increase your speed to market and easily clear barriers to progress.
- What process integration options do they offer? By all accounts, everybody does EDI. But in reality, not every shipper can do traditional EDI. More importantly, it’s unlikely that all of your supply chain partners can do EDI. Ask about the effort the technology provider makes to use all the tools you and your supply chain partners use—from XML files to smart phones to web tools, and more. It’s paramount that you can easily integrate the way you do business and gather data with the provider’s transportation technology. Also ask if the technology easily automates processes. Can their technology help you improve your data quality? It should be able to assist you with all these things.
- How many of your current service providers are already integrated with their technology? Last month, another Logistics Viewpoints guest commentator wrote about new carrier onboarding as a key criterion when selecting any shipping software. I couldn’t agree more. You probably have a broad (and changing) network of service providers. Make sure you ask about the ability to connect to and easily access your shippers, carriers, and anyone else in your network. If your provider has a large worldwide network of connected companies, you’ll likely discover that many of companies you work with are already on the platform, which makes the start-up process that much easier.
- How mature is their system availability process? Do they regularly test their availability and problem recovery process? Can they walk you through it? Do they maintain their own data center or have they outsourced that responsibility? Ask about their data security and inquire about their disaster recovery program. Do they have redundant systems that can prevent long outages? Data security and business continuity are crucial to any company that depends on technology (including yours).
Beyond these questions, you can also look into other aspects, such as knowing who controls your provider’s core software. A provider that owns its own technology and executes with it every day is going to update the technology more quickly to evolve at the pace of your business. That is part of the reason why we have a long history of investing in our own technology platform. As our CIO points out in a recent blog posting, what you’re really after is a solution that will grow with your company. If your LSP does not own its transportation technology and have in-house support personnel, it may not be able to evolve fast enough to accommodate your business. You need your technology to fit your business requirements both now and in the future. At the very least, expect your provider to have full control over the system’s core software so they can develop it as your needs evolve.
In summary, when you have a provider that can excel in the five core areas discussed above, and can articulate how they will continue to improve their capabilities, then you are ahead of the curve.
Ryan Pettit directs C.H. Robinson’s technology strategies. He leads the Navisphere technology development platform and other product development initiatives. Ryan joined the company in 2000 and has over a decade of technology leadership experience in logistics and TMS. He enjoys working directly with industry stakeholders to collaborate on innovative transportation solutions and he is a frequent contributor on TMS strategies for Transportfolio® Blog and the TMC Blog.
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