Choosing the right Transportation Management System (TMS) is a pivotal decision for trucking and logistics companies. With so many options available, it's important to carefully evaluate what your company needs. Based on insights from a recent GLCS panel discussion on the Driving Forward Podcast, here are some key considerations when selecting a new TMS:

1. Understand Your Core Requirements

Before diving into the market, it’s essential to map out your company’s current state. Identify the must-haves that are critical for your day-to-day operations. Determine if your needs are non-asset, asset-based, or a combination of both, and include that requirement in your search.  A TMS, at its core, manages the movement of goods, but the best systems go beyond that, integrating asset management, financial reporting, and even full ERP functionalities. 

Focus on what your company is doing now and outline the needs that must be met. It’s easy to get swayed by nice-to-haves during a demo, but the foundation of your decision should be based on current operational requirements and future growth needs​.

2. Involve All Stakeholders

Getting buy-in from all parts of your organization is critical. The panel emphasized the importance of speaking to each department to understand their needs before committing to a TMS. Sales, operations, finance, and IT all interact with the system, and each department’s feedback is valuable in choosing a solution that fits the entire company’s needs​

Moreover, obtaining internal consensus before making the final decision will help ensure smoother implementation and user adoption down the line.

3. SaaS vs. On-Premise: Which Is Right for You?

The decision between Software as a Service (“SaaS”) and On-Premise solutions depends on your company’s specific needs, budget, and requirements.  SaaS typically offers lower upfront costs, faster deployment, scalability, and remote accessibility, making it ideal for businesses that need flexibility and lack extensive IT resources.  Typically, automatic updates are provided as well as some form of built-in disaster recovery.  SaaS solutions may have limited customization, a dependency on internet connectivity, and incur ongoing subscription costs.

On-premise solutions typically offer complete control, extensive customization, and no recurring subscription fees outside of recurring support and maintenance, making them suitable for businesses requiring strict data privacy and regulatory compliance.  While On-Premise systems have higher upfront costs, longer deployment times, and require a dedicated IT team, they offer independence from internet connectivity.

Ultimately, SaaS is ideal for companies seeking agility and low investment, whereas On-Premise suits businesses prioritizing control, customization, and long-term cost efficiency.

4. Scalability and Growth

Scalability is a critical factor, especially for growing companies. Smaller companies may not need a TMS that can handle thousands of shipments per month, but mid-sized and larger companies must ensure that their chosen TMS can grow with them​.

Evaluate your company's growth trajectory, and ensure the system you select can handle an increase in shipment volume, new business models, or expansions into new regions.

5. Customizability and Flexibility

Not all TMS solutions are one-size-fits-all, particularly when it comes to custom needs. If your business has unique processes or specific industry requirements, you need to assess how customizable the system is. Some TMS providers offer significant customization options, while others may require extensive development to meet those needs. Be mindful of the balance between flexibility and cost​.

6. Integration Capabilities

In today’s world, no TMS operates in isolation. The system must integrate seamlessly with other critical applications, including Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Fleet Management, and Electronic Logging Devices (ELDs). A good TMS should come with strong API capabilities, allowing it to connect with other platforms easily​.

It is important to assess the integration capabilities during your evaluation phase. Poor integrations can lead to costly delays and workflow inefficiencies​.

7. Support and Ongoing Upgrades

The quality of a TMS provider's support team can make or break the system’s success after implementation. During the panel discussion, it was noted that many companies experience a drop-off in support quality once the system is live. To avoid this, ensure that you research the provider's service-level agreements (SLAs) and talk to existing customers about their experience with support​.

Additionally, many SaaS TMS providers release regular updates and upgrades, which can be both a blessing and a curse. Make sure your vendor’s update schedule aligns with your operational needs and consider how updates will affect your operations.

8. Future-Proofing and Roadmaps

Be wary of solutions that promise functionality “on the roadmap.” While future development is expected, if too many of your requirements are not currently met, you may want to reconsider that provider​. It’s important to choose a TMS that meets the majority of your needs today, with room for growth in the future.

9. Total Cost of Ownership (TCO)

Cost is always a factor, but it’s important to look beyond the initial purchase price. The total cost of ownership (TCO) over 3-5 years includes implementation, customization, training, maintenance, and potential upgrades​. Compare this across different solutions and ensure you're considering the full financial picture.

Choosing the right TMS can seem daunting, but by following a structured approach that includes mapping out your needs, involving key stakeholders, and carefully evaluating both technical and operational requirements, you can make a more informed decision. Remember, the more work you put into the selection process upfront, the smoother your implementation and long-term usage will be.

At GLCS, our goal is to empower our clients with up-to-date information to make informed decisions about their Transportation Management System (TMS) and overall technology ecosystem.  We collaborate with all major TMS providers and have deep insights into the wide range of systems available on the market. If you're feeling overwhelmed by the TMS selection process, don't hesitate to reach out. We’d be happy to arrange a discovery call to guide you through the next steps and help you make the best choice for your business.

 Interested in watching the full panel discussion?  You can find this episode on our Driving Forward YouTube channel.