One of the major trends driving TMS implementations is the technology’s proven ROI. Primarily, a TMS can save companies money by lowering their freight spend. An ARC survey on the ROI of TMS found that respondents indicated freight savings of approximately 8 percent with the use of a TMS application, a 2 percent improvement from the last time ARC surveyed TMS users. Of these savings, 60 percent of users indicated that less than 10 percent of the net savings were absorbed by the TMS. These freight savings can be attributed to simulation and network design, load consolidation and lower cost mode selections, and multi-stop route optimization.
The one area that needs improvement when it comes to ROI is the implementation timeframe. The good news is that according to ARC’s research, only 9 percent of respondents indicated that their TMS implementation project timelines slipped and the software was not fully functional at the project deadline. Additionally, 39 percent indicated that timelines were met for the bulk of the features, but not all promised functionality, and 24 percent said timelines slipped but following go-live, it was fully functional. That leaves only 27 percent of respondents that indicated timelines were met and the software was fully functional at go-live. This is an area that can make or break IT budgets, and certainly gets shippers thinking about alter-native routes to take.
In order to keep implementations on schedule and on budget, developing a baseline of KPIs and a communication schedule are critical. I recently spoke with two senior leaders of TMS companies, Dan Sedore, Vice President of Services at 3Gtms, and Mark Picarello, COO at Pierbridge, about their experiences and guidelines for TMS implementations. The conversation is below.
Chris Cunnane (CC): How long is your typical implementation timeframe?
Dan Sedore (DS): We’ve recently modified our delivery approach and methodology to implement projects in phases to enable clients to be live and recognizing benefits and achieving ROI sooner. Given this, the implementation timeline is tightly aligned with the Project’s scope, success factors, and client goals, and client resources. We have successfully reduced our implementation timelines within the past few months. We’ve completed the initial project phase in as little as 4 weeks and large complex projects spread out over 18 months. The average go-live is approximately 4 to 6 months.
Mark Picarello: Our software can be deployed on premise or accessed from the cloud. Our experience is that there’s no such thing as a “typical” implementation because one of the reasons customers buy from us or from one of our VARs is that the system is flexible, with tools to change workflows and integrations. Our cloud-based apps can be implemented in less than an hour, while an on-premise deployment could take weeks depending on the complexity of customer requirements.
CC: What percentage of implementations stay on schedule and on budget?
DS: Our goal going forward is 100% on time, in budget. This is achievable with strong Project management and managing scope change. Project factors causing delays and budget overruns are primarily influenced by tasks not being completed on time due to resource commitment, scope creep, and being too optimistic in the delivery effort. Our methodology of clearly defining and getting alignment on scope, requirements, and design early in the project as well as delivering in manageable phases, reduces the risk of budget overruns, run away scope, and project team fatigue.
MP: It depends on the level of complexity. If you were to categorize projects as small, medium, and large, the small ones seldom stray from standard implementation processes. Medium implementations generally have mixed freight and parcel, multiple locations, multiple workflows, and more involved integration to one or more systems. But these also mostly stay on schedule. Large implementations have complexity and their ability to stay on a timeline is directly related to a customer’s ability to articulate requirements upfront and also the number of change requests mid-project.
CC: Do you have a global template? And how do you track the progress of the implementation?
DS: We have a Project Implementation Methodology and a Phased rollout approach. Our project templates have milestones for signoff at key milestones, such as integration design, configuration design, workflow design. We track progress and budget based on tasks and deliverables, their associated due dates, and assigned budget/hours via our project management tool. The Project Management Platform provides transparency and collaboration of the entire project team, client, and 3GTMS
MP: We follow a project “blueprint,” which represents best practices in terms of scoping, design, implementation, and testing. These practices do not change by region, although requirements can change by region and by the type of carriers we onboard (some carriers have advanced IT, some less so). Our project blueprint framework includes milestones to measure and track progress. We tend to group them around activities including location setup, carrier onboarding, and systems integration.
CC: What is the most important thing to keep an implementation on track?
DS: Strong project management combined with open, honest, accurate, and timely communication. During launch/kickoff, from the 3G side we have a project manager, implementation leader, VP of services, and the Sales lead who was involved in the sales process. From customer side we like to have project sponsor/stakeholder, representative from each key area (IT, Finance, Operations), and their designated Super User(s). We discuss expectations, goals, success criteria, project plan, change management, and resource needs.
MP: Clear and consistent communication throughout the project life cycle. For proper project management, communication is key. We outline clear requirements, deliverables, dependencies, and follow up.