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Cost of TMS Software: Buying vs Building

What is a Transportation Management System?

Transportation management systems (TMS) assist firms in planning, executing, and optimizing the flow of goods, both inbound and outbound, while ensuring compliance and adequate documentation. In many cases, it's part of a more extensive transportation, logistics, or supply chain management system.

A TMS gives visibility into daily transportation operations, compliance monitoring, documentation and ensures timely delivery of freight and goods. Transportation management systems help firms manage and optimize their land, air, or sea transportation operations.

A software component is crucial for efficiency gains in today's business world. For example, back-office software systems that automate customer relationship management, billing, and reporting enable firms to harness technology and free up personnel resources for higher-order tasks.

Unsure if it's time to revisit your existing TMS Software? Here are four signs that upgrading an existing TMS software system is required.

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Buying vs. Building TMS Software in The Logistics Industry

When it comes to software, deciding whether to go with the freedom of making your own or the speed of buying a standard option off the shelf can be complicated. Businesses that are shipping goods nowadays are confronted with this problem, and it isn't just a financial consideration. It's also crucial to think about a solution's efficiency, efficacy, and alignment with your company's long-term objectives.

Consider the following factors when deciding what to do:

What problems are you attempting to solve with TMS software, and how unique are they?

If you need a simple customer relationship management (CRM) system with some basic capabilities, for example, there are likely to be several off-the-shelf options available. However, if you require extensive functionality or are attempting to solve a problem unique to your organization or industry segment, you may have difficulty finding a viable solution on the market.

Do you have the resources you'll need to take this project on?

Building new software is more expensive than purchasing pre-built software. This could be a deal-breaker depending on the size and profitability of your company.

What are the deadlines for putting a software solution in place?

Although software development process models allow for the rapid generation of working software modules, releasing a fully-featured custom software solution requires time, which the firm may or may not have.

The answers to these questions will enable you to decide, but you should weigh the pros and drawbacks of each option before making a decision.

 

Build vs. Buy TMS: Pros and Cons

Pros and drawbacks of each choice to help you decide:

Pros of Building Your TMS Software

Customization and Scale

One of the main benefits of developing your custom software is that it will include all the features you require. Your software will be customized to your business model and constraints. Total development control also allows you to add new features as needed to keep your business running smoothly. Your software can grow with your earnings. Your staff will also be able to provide feedback on the features they need to streamline their workflows. 

Better Control 

Ownership gives you complete control over user preferences, security, and system updates. Plus, complete ownership allows you to sell the product itself as a service.

Competitive Edge

As part of your technology strategy, you will want a competitive edge. An industry-leading custom software solution can help your company obtain a competitive advantage by employing the latest efficient, connected, and scalable technology. As a result, your software can set you apart in a crowded market. 

Guaranteed Integration

Building your solution ensures easy integration with existing software, tools, and procedures.

 

Cons of Building Your TMS Software

Higher Upfront Cost 

A personalized solution, like everything customized, will cost more than a standard offering. Standard solutions may not always be the most cost-effective option. Pre-built software might cause revenue loss over time owing to a lack of scalability or vital features. Customized software can increase productivity and profitability while speeding up corporate growth.

Time To Build 

Building software that optimizes your organization's workflow procedures takes time. Therefore, you must be willing to invest time in obtaining this data to create an effective custom solution for your company.

 

Pros of Buying Your TMS Software

Lower Upfront Cost

Pre-built software is often cheaper to acquire and implement; thus, it may be the best solution if the cost is high.

Rapid Deployment

Pre-made apps should work as soon as you pay for them and install them. If an existing solution entirely fits most of your needs, it may not be worth spending time and money developing a new version. Third-party suppliers will need to keep up with updates and new features. A third-party solution is frequently updated with new features and functionality.

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Interested in learning even more about how to go about making your buy versus build freight tech decision? Download our Ultimate Freight Tech Buy v Build Ebook.

 

Cons of Buying Your TMS Software

Less Customization

Even if third-party software solutions allow for some customization, they are not explicitly created for you.

Less control

You have no control over the software's features or future.

Issues with compatibility and connectivity

Pre-built software may not be compatible with other programs, devices, or goods you already use or may need in the future.

Long Term Cost

While ready-made software may be initially cheaper, its costs may rise with time. Subscriptions and licenses are usually time-limited, so you'll need to renew them. You will also need to add licenses for additional staff if your firm grows dramatically.

Buying off-the-shelf software or developing a custom software solution from scratch to fit your specific business needs is a complex decision. If you choose a third-party system, carefully compare the various providers and solutions. On the other hand, if you decide to construct your own software platform, be aware of the time, effort, and expenses involved.

TLDR: Buy what you can and build what will differentiate you!


Metafora

Metafora, previously "CarrierDirect", is the leading consulting & software development firm for transportation, logistics, and supply chain businesses.

We help supply chains, transportation, and logistics companies overcome obstacles toward progress and growth so that we can contribute to a more efficient world together.

For transportation providers, shippers, and logistics software vendors who are ready to go the extra mile toward growth and profit, Metafora serves as an extension of your team to push your business to places it’s always wanted to go.

We are not in the business of delivering things, we’re in the business of delivering your company to the next level, fast.

From building through growth plateaus to expanding modal offerings, compensation restructures, training, and sales strategy, we advise on the elements of business most vital to your success. Let’s see how far your business can go.

What we offer: 

  • Evaluation & implementation of logistics technology platforms
  • Guidance on the decision to buy or build
    • Buying? We help with the selection, implementation, training, and adoption of your new investment.
    • Building? We custom-develop solutions just for the logistics and supply chain industry. 
  • Smarter, more reliable integrations
  • Technology guidance to ensure you stay competitive in today's rapidly changing environment
  • And so much more!

Are you ready to see how far your business can go?

Sign up for a Free Discovery Call with a Metafora Industry Expert here!

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Metafora
Metafora
Metafora, previously "CarrierDirect", is a business consulting and software development company that exclusively services the Transportation, Logistics and Supply Chain space. Metafora partners with carriers, shippers, and freight tech vendors to help them optimize their business and build software to fuel their growth. Welcome to the new way forward. Welcome to Metafora.

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