Brainwave

Is it the hype?

Or

Is it "demand"??????????

By:
Prashant Ganeshnarayan Pandey
MBA-IT(II-sem)

Logistics.com (and again on Supply Chain Digest) about how on-Demand Transportation Management Software (TMS) would somehow be a major improvement on the performance of either in-house TMS or other outsourced 3PL's ( Third Party Logistics). Really? And why is this?

I am very skeptical of the whole SaaS thing. And for one very good reason. Firms struggle to get to grips with data that flows, as a matter of fact, through their four walls. Despite all the investment in ERP and other business applications from CRM to SRM, data remains dirty and ill treated inside the firm. Though information is an asset, you would not believe it based on the way most firms handle it. So as these same firms work with 3PL's and find that hosted integration and hosted business and information services are only as good as the data that goes into them, why is it that a new name (on-Demand) suddenly and miraculously solves this problem? It doesn't & it never will!

What is more important and valuable with the whole SaaS model is the new "fee for service" model that is appearing. The change is that the buyer now only pays for a delivered service level - be it for logistics, or whatever the business process. This is very different than signing up for a service that has no performance targets, or implementing a software package that may not yield the ROI as expected. Fee for service is a better model all round - irrespective of the deployment model of the business process or technology.

On-demand is not the important thing here - it is just another hot air phase IT will go through. But the associated fee for service models that are emerging along with SaaS projects is the real gold mine here. This is where SCM practitioners should look to their trading partners in order to build a performance based and chaos resilient supply chain.