To help you deliver freight at the lowest cost that meets customer requirements, a transportation management system (TMS) has to learn and understand the complexities of your particular business. This level of intimacy, however, is often not appreciated by first-time TMS purchasers. I see many companies make their TMS vendor selection as if they were buying accounting, HR or other back office software – and this approach is typical when finance leads the selection or corporate buying processes are followed.
At the heart of this misguided process is the traditional RFP. While RFPs have their place in certain scenarios, they’re an out-of-date idea when it comes to a TMS selection because a TMS is a core part of your operations; and like other supply chain execution software, operations usually can’t be described by check boxes or summarized in a statement. There is just too much complexity and too many variables.
Let’s look at common mistakes first-time TMS purchasers make by relying on the RFP process.
You’re focused on the what, not the how
Experienced TMS buyers know that checking the box on an RFP doesn’t actually mean the feature will work for their operations. You need to understand how a feature works.
Let me use the analogy of a self-driving truck. It’s easy for a driver to take a load from Pittsburgh to Chicago. However, it’s another thing to have a self-driving truck do the same. At a high level, we can define what it takes to drive a truck from Pittsburgh to Chicago, but the details of autonomous driving that the software has to learn are incredibly complex. Getting software to run your operations in some ways is similar, as it’s easy to define at a high level but, as they say, “the devil is in the details.”
This is why using a classic RFP for TMS selection can be a rookie mistake; it prevents you from engaging in the details with your vendor. An RFI can be helpful for determining your short list of vendors and sorting through the fog, but it’s still important to get to the how: Get in-depth demos; ask for walk-throughs of your scenarios and really learn how the software fits your specific operations. Understand how it fits in today, and (just as importantly) how you as the user can adjust and change the software. The TMS has to be simple so you can understand it and flexible enough to change as your business evolves.
In addition, have your potential vendors walk through how to change screens, adjust parameters, change delivery rules, create workflows and onboard new clients. Don’t be bashful and don’t rely on the check boxes that say a TMS can do it; find out the gory details of what works and what doesn’t. Ask to get an implementation plan and really look at the steps. At the vendor selection stage, you should understand the details of the implementation steps as if it were you own. These “how” questions will help you clearly understand and appreciate how each vendor addresses your needs differently.
Underestimating customer references
Your TMS vendor should have an active, partnership approach rather than a passive, supplier mentality. These soft skills are hard to quantify with an RFP, but it’s where the rubber meets the road: does your vendor follow through on what they say? Are their successes as great as they say they are?
Any vendor can produce a few good references, but you’ll need to find the unhappy ones to get a real sense of their capabilities and culture. It’s better to deal with a vendor with dozens of happy customers and few or no failures versus one with hundreds of happy customers and hundreds of failures. Ask or look for a complete customer list and select references randomly to contact; look at the vendor’s list of press releases for new customers and see if those same customers are still on the reference list; and ask for the vendor’s customer satisfaction rate or attrition rate.
It requires homework, not check boxes
Too often I see TMS selections in which the buyer didn’t do their due diligence; they selected the vendor with the most check boxes or they were swayed by a glitzy sales team that sold into the standard corporate buying process. In these cases, the projects have the highest rate of failure. So, don’t follow the autonomous buying policies that are used for non-operational systems; look differently at how you buy – and do your homework. It may make or break your company, or even your reputation.
J.P. Wiggins is vice president of logistics at 3Gtms. He brings more than 25 years of industry experience, most recently at SAP where he was the solution principal focusing on SAP’s transportation, warehouse and event management offerings in North America. He also directed industry marketing for the company’s transportation and logistics business unit. Before SAP, he was senior vice president and general manager for Descartes Systems Group’s supply chain, transportation and logistics applications business, and also served as vice president of product management for the company. J.P. was co-founder and senior vice president of logistics for Global Logistics Technologies (G-Log); co-founder and vice president of product management at dx/dt; and vice president of logistics at Weseley Software. He holds degrees in transportation & logistics and marketing from The Ohio State University.