"The possibilities run the gamut of relatively minor elements to very significant," says Menner. "So these individual requirements have an impact across our entire customer base in terms of scale of modification or the impact of the promote, as we refer to it."
Next Generation: SaaS With An Option To Buy
Next Generation Logistics Inc. offers distinctive value to the on-demand TMS model, notes John Riske, vice president of business development for the Inverness, IL-based company.
"Our FreightMaster TMS can be deployed in one of two ways: as a server-based model on-site and/or through accessing the system via the Web." Rick Isaacson, CIO, adds that the company's offering is akin to SaaS with an option to buy.
If a company's infrastructure is not able to handle a full-blown traditional TMS, it can begin with the SaaS model to make sure it's a good fit and that the ROI is there. "Then if they choose, they can pay a flat purchase fee to bring it in-house to rid themselves of the monthly fees," Isaacson says. He adds the solution works well for pilot projects or for companies on fast-growth paths. "But at some point you might outgrow the SaaS pricing model, which could potentially diminish your ROI."
Several distinctions exist between Next Generation's product and others on the market. First, it is not a multi-tenancy model. When other vendors upgrade their software, everyone in the network does, continues Isaacson. "This means if there is a change in functionality, you are limited in your option not to adopt that functionality. These changes could impact your business processes."
Riske says that when Next Generation issues a new release, companies have the option of implementing right away or later on. "This is a huge differentiation because IT departments are loaded with work and they don't want to be told what to do and when to do it. We can work within our customers' change management structure versus getting them to change right away."
Another distinction in Next Generation's on-demand model, continues Isaacson, is that companies are not tied to the vendor carrier base-or a generic carrier base. "Our system uses the negotiated rates a company arranged with its carriers, opposed to a common database of carriers and rates."
Riske adds that other vendors in the marketplace market the carrier community as an advantage. "I can understand that to a certain extent-but at times when capacity is low, sharing your carrier base might not be a good strategy. So other models are sharing their rates, their capacity and their carrier base. This means I am opening up the possibility of reducing my accessibility to equipment, preferred quality and to preferred-rate vendors." He adds that the company can offer customers the service of conducting a freight bid package, should customers want to expand their carrier base.
Going lean and mitigating risk often run counter to each other, notes Isaacson. "We aim for how lean we can go while mitigating risks like carrier quality, quality control and diminished capacity within our customers' supply chains." He adds that deployment of either solution takes between 30 days and 45 days.
Sterling Commerce: Value On The Fulfillment Side
About six years ago, Columbus, OH-based Sterling Commerce looked beyond the integration space to find additional value on the fulfillment side of customers' supply chains, explains Richard Douglass, global industry executive for manufacturing and logistics. "That is when we made a number of acquisitions, culminating with the Nistevo acquisition in 2006."
These acquisitions enhance the Sterling Commerce Selling & Fulfillment Suite so it can deliver "the perfect order," notes Douglass. "Although planning continues to be an issue, companies also want to see how they can improve on the execution side, where a lot of problems arise and where they are incurring a lot of cost, particularly on the transportation and logistics side."
Customers instantly connect to Sterling Commerce's network of 8,500 carriers, says Douglass. "We see the continuing need for additional on-demand solutions, especially as global supply chains cross multiple enterprises. Even internally, they cross multiple systems and it's difficult for companies to get a complete picture of what's going on with orders, shipments, and inventory. So our Supply Chain Visibility On Demand provides that end-to-end process visibility. We have fully integrated this with our TMS on-demand offering."