Before buying new supply chain software, a company wants to make sure the software will perform as promised. It’s important to know that there is more to product performance than just the product itself. To decide if the software will be successful for your company, look beyond the dashboard, reporting and promised analytics to three key processes: the implementation approach, how the software works with existing systems, and the quality of the data used by the software.
The developer’s process to create a new software product (design, coding, testing) is important but the implementation process has a far greater impact than many anticipate. You can have the best software in the world, but incorrect implementation can render it useless. When supply chain managers and other company executives evaluate software, they should focus their efforts on the provider’s implementation approach. How long will it take for full implementation? What level of experience does the provider’s installation team have? Is internal IT staffing support required? In many companies the IT group is already stretched thin and a major software installation can cause a lot of headaches like delays, disruptions and additional costs.
Plays Well with Others
TMS, invoice management, and freight tracking are three widely-used supply chain software solutions, yet companies are having a hard time extracting the value from these software additions. Unfortunately, many companies have purchased a TMS because they’ve been told that this is how they will finally be able to have information at their fingertips about how they’re performing. Then they try to bolt-on the track and trace and invoice management pieces from other providers to get the information they are looking for. I think these companies are missing the mark. Just like the discussion of how important the implementation process is compared to the product, companies need to look at how the software products relate to each other. When you talk about improving logistics, you’re talking about transportation management, invoice management, and tracking as a whole. Yet when you look at what is available on the market, these pieces are all separate solutions being sold by different companies. It’s no wonder that these pieces don’t work that well together or provide value.
In order for the TMS (planning and execution) to work with tracking and the invoice management side (settlement), they have to be integrated together and all three solutions have to be “aware” of each other. You’ll never get this by purchasing three different pieces of software that are produced by three different providers. In the case of invoice management, most of the providers that offer this service don’t have a lot or any software behind it; they are using people to manually solve problems and sort data. There is no way to cost-effectively integrate this manual piece with the TMS and tracking solutions.
Data Fuels Success
It’s a huge red flag when your new software does not produce integrated data. This means you must create a new group within your IT department to integrate all your data together, and possibly staff another whole group to extract the data, cleanse it, and normalize it so it is actionable and accurate. This becomes a very expensive way to get the software to do the thing it was purchased to do.
When you view software as a data/information solution, you can start to see how important the data is. I think a good software product should point out the parts of your process that could cause data quality issues. When it does, you’ll find some processes (either you are doing, or your carriers are doing) that don’t fit into the normal business flow. When routine processes are performed outside the system, they lead to data quality issues. A good example of this is handling exceptions manually instead of through your automated system. The data may or may not get input correctly into the system or even get into the system. These sorts of data quality issues will cause your systems to not perform at optimal levels, which costs you money. It’s no different than putting the wrong gas in your car and wondering why you are having problems. Another way to look at it is, this data is what the software uses for its intelligence—reporting and analytics. If you use those reports and analytics to make decisions, the quality of the data impacts your decisions.
Five Questions to Ask Your Logistics Software Provider
To make sure your new software product performs as promised, here are five questions about data and implementation you should ask the vendor:
- Who will be responsible for identifying and fixing any data gaps that are found?
- Will you talk us out of doing something?
- How much transparency will we have with the data?
- Will you help us learn how to use the data to make decisions or will it be used to justify the decisions that have already been made?
- How much internal IT support will we need for implementation?
By using these five questions as a guide and focusing on the importance of integrated systems with clean, actionable data, you’ll be on the path to choosing a logistics software and services provider that’s right for you.