6/3/2015

INSPIRING VALUE CHAIN ADVANTAGE ®

A new path to TMS ROI

Cloud-Based Transportation Management Systems

Shauna Hillier, CCS, CCLP

June 3, 2015

Agenda

• Introduction
• Transportation Management Systems
• Cloud-Based Solutions
• Cloud Approach vs. Traditional On-Premise Approach
• Evaluating Potential Cloud Solutions
• Evaluating Implementation Partners
• General Best Practices
• Q&A

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Introduction
• As CCLP’s we’re expected to manage a wide variety of operational
scenarios while keeping an eye on costs and KPIs.
• ‘If you can’t measure it, you can’t manage it.’

• A CCLP is not usually an Information Technology specialist.

However, the information technology platform for managing operations and
freight spend is and will continue to be an ever more critical part of executing
and improving operations.

• If you do have a TMS, you’re probably wondering if it could be better.

• If you don’t have a TMS, you’re probably wondering if you should have one.

Introduction
• ‘Cloud’ and ‘Cloud Computing’ are the
new information technology buzzwords
• They’re seen everywhere, on all kinds
of platforms
• You start to wonder:
– Is there something to this Cloud concept?
– Is there a business benefit I should be
aware of?

• This webinar is going to give you some

tools for evaluating those questions in
the context of a Transportation
Management System

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Introduction
Who am I, and why am I giving a webinar on Cloud Based Transportation
Management Systems?
• Worked in operational logistics for over 9 years
– Sherritt International (Metals Refinery)
– Air Liquide (Bulk Gases and Liquids)
– RONA (Retail Hardware and Housewares)

• All modes – intermodal, ocean, rail, road (TL/LTL), air, some pipeline
• At each company, I either worked with, implemented, or managed a TMS
– Was a logistics coordinator that had to transition to a new TMS my company implemented
– Managed, trained and hired personnel to work as TMS planners or dispatchers
– Worked with carriers to develop rates for TMS planning and onboarded them as TMS partners
– Managed reporting, system configuration, rates loading and ongoing development

• Moved to consulting in 2014, specializing in Oracle Transportation Management and Oracle

Global Trade Management
– Inspirage is an implementation partner – we help companies implement software
– Lead for development and configuration of our Rapid Start Solutions for the Oracle Cloud

Transportation Management
Systems Overview

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Why implement a TMS?

Transportation Sourcing • 5 – 20% rate improvements from carrier bid optimization
and/or Contract Management • 5-10% reduction in current administrative costs

• 5 – 25% expedited shipment reductions

Shipment Planning & • 5 – 15% capacity increase
Optimization • 5 – 20% reduction in freight cost due to consolidation

• 5 – 30% productivity improvements (reduced errors,

Shipment Execution increased loads per hour, automation)
(Booking/Tendering and En Route Planning) • 1 – 3% decrease in transportation costs

• 2 – 5% reduction in inventory
Supply Chain • Lower transportation costs due to better analytics
(Visibility & Analytics)
• Better supplier and customer relationships

• 10 – 100% reduction in administrative costs

Freight Payment and Billing • 2 – 5% reduction in freight expense through correct
invoicing and application of accessorials

Typical Modules
Core Intelligence / Analytics Freight Forwarding &
• Contract Management • KPIs Brokerage
• Order Management • Ad hoc Reporting • Consolidation. Mgmt.
• Shipment Creation • Score Carding
• Shipment Execution • Benchmarking What-If Modeling /
• Order / Shipment Simulation
Visibility Fleet Management
• Reporting • Fleet Planning Global Compliance
• Workflow • Dispatching Management
• Driver Assignment • Customs
Operational Planning • Asset Mgt. / Tracking Management
• Algorithmic Planning • Driver Payroll / HR • Trade Compliance
• Order Consolidation
• Shipment Optimization Carrier Sourcing
• Load Configuration • Carrier Bid Mgt.
• Dock Scheduling • Automated Rate
Upload
Freight Payment, Billing, • TL, LTL, and Air
& Claims
• Freight Invoice Creation Routing Analysis
• Freight Audit • Continuous Move
• Match-and-Pay / Analysis
Auto-Pay • Asset Planning
• Payment Voucher • Automated Route
Creation Upload
• Customer Billing
• Claims

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Typical TMS Integration

TMS
Order
ERP / WMS

Item Management
Location Tender Offer

Purchase Order Shipment Tender Response

Sales Order Planning

Carriers
Transfer Order Notification

Reporting
Workflow
Planned Shipment Shipment
Shipment Event
Shipment Actuals
Execution
Payment Voucher Freight Invoice

Visibility

Tender Offer (email)

Freight
External PCM or RM (Distance Calc.)
Settlement
Tender Response (Web Portal)

Shipment Event (Web Portal)

Systems SMC / LTL Tariffs (LTL Rating)

Master Data

Cloud-Based Solutions

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Business Drivers Behind Cloud

There are challenges facing any IT project today:

– Shrinking budgets – Process Changes

– Mobile Applications (Innovation and
Improvements)
– Security Challenges
– Learning Curve on
– System Upgrades New Technology
– System Integrations – 1 – 2 Year ROI
– Resource Constraints Expectation for a New
IT Project Approval

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The Cloud Business Proposition

Cloud-based systems propose to answer those business
challenges.
• Key difference: You’re not buying Software – you’re buying a Software
Solution. This includes:
– SaaS (Software as a Service) – You are buying configured software
– BPS (Business Process as a Service) – You are buying processes

• In order to do configuration you need to have defined the processes,

which are the events that will occur in a certain sequence
– In Transportation, there is enough process commonality to allow pre-configuration to be useful
– E.g. Get a sales order → Plan a shipment for the order → Tender the shipment to a carrier → Pick
and Ship the goods → Monitor the shipment to destination → Pay the Invoice for the shipment →
Analyze and Report on KPIs

• Analogy: Traditional system vs. Cloud system is like the difference

between building a house and buying a house
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The Cloud Business Proposition

• Build (Traditional Implementation) – Take your processes:
– Build the floor plan exactly the way you want it to be (Integration)
– Put in the appliance package you want (Configured Data Elements)
– Choose flooring – carpet vs. hardwood vs. linoleum (User Interface)
– Price = ?, Timeline = ?

• Buy (Cloud Implementation) – Based on best practice processes:

– Floor plan is what it is – the walls are built
– Appliances and flooring are already there
– Price = X, Timeline = X + ?
– You can renovate / upgrade if you want
• Adjust Price and Timeline accordingly

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The Cloud Business Proposition

With a Cloud Implementation, you gain on:

• Speed
– Rapid implementation = Rapid time to realized value
– Pre-configured system based on a pre-defined process flow
– Less uncertainty on timeline

• Cost
– Rapid deployment reduces your project cost
– Subscription based costing – pay as you go, pay for what you need
– Less uncertainty on cost

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The Cloud Business Proposition

• Resources
– Certified implementation partners manage implementation and ongoing support
– Rapid deployment decreases the demand on your IT and operational resources
• You focus on your core business, not on managing IT systems
– Less learning curve required

• Other Benefits
– Scheduled upgrades keep you current and compatible with all systems / devices
– See pre-configuration in advance – know what you are buying
– Pre-configured security profiles with appropriate user access
– Flexibility to change as processes change / your business grows
– Lower risk, less uncertainty
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Cloud Value-Added Features

• Support your business with pre-configured process flows based on:
– Best practices in Transportation Management, AND
– Best practices in utilization and design within selected software platform

• Reduced stress and uncertainty = Better change management.

– Begin with a Conference Room Pilot and see exactly what you’re implementing
– Personnel begin to train immediately in a configured environment

• Cloud allows Rapid ROI and a phased approach

– First, implement the standard process flows to achieve rapid ROI
– Next, take time to Adjust, Learn, and Target your next systems needs
– Then Customize / Develop / Add – with the confidence that you are truly addressing
your most important business requirements, and much more certainty that you are
using your money wisely. Live in the house, then start to renovate.

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Cloud Value-Added Configuration

User interface configuration can make or break system success

• If the system is cumbersome or non-intuitive, users can resist adopting the

new system
• If they work outside the system, or short-circuit difficult process steps, you
lose the clean data needed for good reporting and analytics
• User interface configuration is time consuming, and is often one of the first
things that gets limited in a project that is over time or budget or both
• In a Cloud-based solution, user interfaces are pre-developed with best
practices in mind, leveraging system bells and whistles

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Out of the Box Screen

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Configured Screen

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Enhanced Configured Screen

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What is included in a Cloud-Based Solution?

The software company • Hardware (physical database, webservers, etc.)
(e.g. SAP, • Hosting
MercuryGate, Oracle) • Subscription licensing
• Maintenance (Technical Upgrades and Support)
provides:

The implementation • Configured Solution

• Implementation services
partner (e.g. Deloitte, • Managed services
Inspirage) provides: • Other optional components as needed (Integration, Reporting, etc.).

• 3rd party solutions such as:

• Distance Engines (e.g. PC Miler)
Third Parties provide: • Carrier Connectivity (e.g. SPS Commerce, Transporeon)
• Parcel Management (e.g. Kewill, Skipjack)

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Why do I need an implementation partner?

• Common misconception:
– “A TMS is built to handle Transportation Management. So I should just be able to hook it up to my
ERP, learn the system, and I’ll be up in running in no time. Right?”

• In fact:
– A TMS isn’t like Windows, or like a new Smart Phone – when you turn it on, it won’t do anything
without extensive configuration and integration.
– A Cloud solution can speed this up with pre-configuration and pre-designed integration, but does
not eliminate the need for it.
• For example, we can’t eliminate the time it takes to load your rates into the system and test them. We can
speed this up with Cloud accelerators, but it still needs to happen.

• An implementation partner is necessary for both a Traditional and Cloud approach.

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Cloud Approach vs. Traditional

On-Premise Approach

Implementation Project Comparison

Cloud Implementation Project Traditional Implementation Project
• CRP to view pre-configured solution • Extensive requirement gathering and
solution development phases
• Analyze how to adopt the business
processes contained within the pre- • Install application, databases, etc.
configured solution
• Develop custom solution. Extensive build
• Copy pre-configured solution into domain phase. Create user interface, security, users,
provided by software company. Create etc.
integration from templates.
• Create custom integration
• Load rates and data from library templates
• Create templates to load rates and data
• Training phase based on solution library
materials • CRP to determine if solution meets business
needs. Revise solution if it does not.
• Some modifications / additions to address
gaps between your business needs and the • Create training materials
pre-configured solution

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Pros of Cloud vs. Traditional

Pros of Cloud Approach Pros of Traditional Approach
• Lower upfront costs for application licenses, • Potentially lower longer term costs
hardware and technology (spread out (buy vs. lease analogy)
monthly instead of all upfront)
• Retain control of system
• Quicker ROI (system re-starts, database copies, new
database columns/tables, stored procedures,
• Expensed vs. Capitalized etc.)
• Provides a catalyst to start the project • Enable database connections for data
extraction tools for data warehouses and BI
• No need for DBA/Sys Admin resources
tools for reporting
• Good for companies who don’t have strong
• ERP / Integration / TMS all in same locale
systems expertise
• Adhere to customer IT standards
• Can enable a quicker and less expensive
implementation • Customer takes “Ownership” of TMS

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Points to Ponder
• With Cloud, you could have three or more different providers – three sets of
ongoing expenses, three relationships to manage.
– Will this save me money in the long term?
– Assess TCO (Total Cost of Ownership) for at least 3 years out

• Can you truly adapt your business processes to the Cloud Solution rather
than expecting the solution to be adapted to your business process?
– Do I want a turn key solution or a custom solution?
• A pre-configured solution will probably not meet all your needs.
– If it covers 80% of your requirements it is considered a good fit
– Phase 1 of a traditional project is also going to aim for 80% as well

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Points to Ponder
• Do I genuinely need highly customized integration?
– It is legitimate to say the answer is ‘yes’ if that is your situation

• Implementation time on a Cloud project could be as fast as 12 weeks,

compared to a minimum of a year for a traditional project. But:
– Can my organization adapt to change that quickly?
– Can my carriers adapt to change that quickly?
– Are my rates already documented in a format that can be converted to
automated rating by a system?
– Is my ERP data clean?
• To a TMS, ‘Fort St. John’ is not the same thing as ‘Ft. St. John’

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Who is Cloud a best fit for?

• Medium sized enterprises
• Larger enterprises with straightforward logistics (e.g. Single-leg
shipments from A to B. A to B to C adds more complexity.)
• Standardized logistics processes with limited exceptions
• Centralized operational planning
• Companies with limited IT department funding and resources
• Current access to transportation data for metrics and analytics is limited
• Current logistics management is largely manual
(e.g. spreadsheet based)
• Companies wanting to fill a specific gap e.g. if you need more visibility –
do not have to replace all existing processes necessarily

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Evaluating a Potential Solution

Evaluating A Potential Solution

• Pricing
– What is included in the subscription cost?
• Software? Support? Provision and set up of the install?
– Is there a one-size-fits all cost? Or is the cost adjusted to reflect
the size and scale of your operations?
– Can you select only modules you want and need?
– What is included in the implementation cost?
– What is included in any ongoing managed services pricing?
• Level 1 Support? Level 2 Support? Regression testing for
upgrades? Ongoing development or just maintaining status quo?

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Evaluating A Potential Solution

• System
– Is the system scalable? Are there limits to how much functionality you can adopt
over time?
– How many environments are provided?
• Development Environment and Production Environment at minimum
– Redundancy and Contingency Planning
• What happens if there are system or network problems?
– Where is my data stored?
• What laws might have jurisdiction?
– How long will my data be stored in the production environment?
• What happens next? I need access to my data for X years for analytics.
– Could I convert to an on-premise solution if necessary?

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Evaluating A Potential Solution

• Updates
– How often are upgrades and patches rolled out?
• Can I control the updating process or am I bound to a particular schedule?

• Software
– How is the software rated within the industry?
– Can the functionality in the system handle different transportation and
logistics scenarios as my business grows?

• Scope
– What is the actual scope of the pre-configured solution?
• Does this scope fit within my business needs? Can this scope be adjusted?

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Evaluating A Potential Solution

• Implementation Partner
– Have they done this before?
• Implemented this solution? Worked with my ERP?
– What do they specialize in?
• One type of software? Different types of software?
– What’s included in the integration templates?
• Integration is the long pole in the tent – it takes time to build and if it fails, nothing is going
to work.
– Can they support operational change management?
– What’s included in the library for the solution? Look for accelerators:
• Documentation & Project Management
• Pre-Configuration/Process Flow
• Master Data Management
• Deployment & Migration solutions, Training Material

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Solution Library Components

Unique
Unique

New

New

Extended

Component Library Specific Project

What is already in the library? Can components be customized, extended or added as necessary?

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General Best Practices

• Hire a business analyst and give them time to learn your business
– Making a TMS successful means translating Operations Speak into IT Speak. These are two
different languages. Your business analyst is your translator.
• Know your requirements
– Best practice: Document requirements first, then shop for a solution. Requirements are not
the same thing as a solution.
• Involve Shipping and Compliance from the beginning
– Everything comes to fruition on the shipping floor
– Don’t design processes that aren’t compliant from the beginning
• Involve an implementation partner early on in the design process
• Get your data clean
• Get your rates documented in Excel (no PDF), specify execution constraints
• Do not underestimate the need for Change Management and for Supporting your
People, especially post go-live!
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Thank You! Any Questions?

Shauna Hillier, CCS, CCLP
Principal Consultant, Inspirage
[email protected]

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