Is your Transportation Management System driving your success or holding you back?
How to spot an outdated transport management system
The purpose of a TMS is to optimize the way your business works – not only the internal processes, but your entire supply chain from end to end. However, over the past few years, your TMS has become less adept at optimizing and more prone to hindering important initiatives. The system isn’t that old, but with the pace of change in technology and supply chains over the past few years, it’s feeling very outdated. Innovation is slowing down, delays have increased, and employees are starting to complain – something needs to change. But before you can sound the alarm, you need to understand exactly what the problem is, what a potential solution could be, and how to explain it to the rest of the powers that be.
Key signs that your TMS is outdated
- Lack of flexibility and scalability
On-premise TMS solutions built on outdated monolithic architectures struggle to align with new market demands, new business models, new ways of working, new transportation modes, changing shipping volumes, technological advancements – in other words, almost anything likely to confront a logistics business. With a monolithic system the components are tightly coupled, and these interdependencies make it complex, time-consuming, and risky to change any one part of the system, as a change to one part will affect the entire system. For example, adding a new piece of business logic to an approval process will require the entire system to be tested and potentially shut down and redeployed before the logic can be implemented. Similarly, scaling one part of the system means scaling the entire system, even if other parts don’t need more resources. Integration with new physical resources is expensive and time consuming, and the business has to guess how much new hardware is needed based on demand. The lack of flexibility and scalability in a legacy TMS hinders a company’s ability to keep up with change and deal with uncertainty.
Solution: Using technology such as a cloud-native, microservices-based architecture, a modernized TMS will evolve with a business rather than restricting it. Instead of one big application, modern TMS platforms consist of independent services with separate modules for different capabilities and parts of the business. Also, using a model-driven development environment, business logic for things like workflows and business rules can be decoupled from the core software and maintained by separate business teams. This enables each component to be updated without disrupting the entire system. Adjustments to business logic can be made and executed dynamically, and new features can be added on-demand. Modern TMS solutions support continuous, cost-effective innovation, which enables the kind of agility logistics providers need to stay competitive.
- Poor integration capabilities
Legacy, monolithic, on-premise TMS solutions create integration challenges. Based on proprietary technology, each integration requires expensive, slow, and risky custom development efforts that impact the entire system and often cause downtime. In a modern logistics environment, staying competitive requires seamless data sharing with a big, complex network of systems and stakeholders across the global supply chain. This includes not only things like enterprise resource planning (ERP) and warehouse management systems (WMS), but a long list of advanced technologies and third-party providers such as carriers, manufacturers, regulators, etc. Lacking these connections causes inefficiency, errors, and delay, which increases costs, decreases reliability, and can irreparably damage the customer experience.
Solution: Modern, cloud-native TMS solutions leverage API technology to provide an efficient, low-cost way to create secure, seamless connections to multiple systems, technologies, and data – no custom coding required. Pre-built, standardized APIs use common communication protocols to ensure cross-platform compatibility and real-time data exchange. In this way, data is always in sync across the enterprise and the supply chain, providing companies with the information they need to optimize logistics operations.
Case in point
Leading liquid bulk logistics service provider, the HOYER Group, has selected Rappit to replace their existing TMS with a modern, cloud-native solution. The new system will offer HOYER connected, integrated logistics services along the entire supply chain. Comprising over 10 modules, including Masterdata, Equipment & Products, and Finance & Billing, the system integrates with more than 15 internal systems and will be used by 2000 users across the globe. The new, future-ready TMS, powered by the Rappit Platform, will enable HOYER to maintain its leadership position by enabling it to think ahead.
- Limited real-time visibility & tracking
Legacy systems were built for batch processing and can’t process high-frequency data updates efficiently, making real-time tracking and decision-making impossible. Monolithic architectures were also not designed to integrate with essential tracking technology such as GPS devices, IoT sensors, external APIs, and modern data formats. This makes seamless data exchange across the end-to-end supply chain impossible. Predictive analytics is another critical technology that utilizes AI and real-time data to move companies beyond reactive logistics management, enabling them to predict and prevent shipping delays. This requires scalable cloud computing and big data processes, which are also not available to on-premise legacy systems.
Attempting to add any of these modern technologies to a legacy TMS is expensive, time-consuming, risky, and may not be possible without cloud migration. As a result, when disruption occurs, legacy TMS solutions can offer only a delayed response based on inaccurate data. When customer needs and expectations aren’t met, unexpected delays are expensive to manage and damaging to a company’s brand.
Solution: A modern, cloud-native TMS will overcome the obstacles to real-time visibility and tracking caused by outdated TMS technology. API-based integrations, cloud services, and microservices-based architectures enable seamless, real-time data communication across the supply chain and an unobstructed pathway for big data and analytics. This gives logistics providers the information they need to not only streamline and optimize day-to-day supply chain operations, but to stay one step ahead.
- Draining IT resources
Like all legacy enterprise systems, a monolithic, on-premise legacy TMS is a drain on IT resources. Complex interdependencies between outdated technologies require IT to spend an inordinate amount of time maintaining the system rather than innovating and optimizing it. A legacy TMS also requires dedicated IT staffing and expensive, specialized expertise to change and update it. With the current developer shortage and young employees expecting to work with the latest technologies, maintaining IT staffing levels can be an issue for companies still tied to legacy systems. On the business side, legacy TMS solutions rely heavily on paper-based and manual processes, which create errors, delay, and inhibit growth.
Solution: A modern, cloud-native TMS reduces maintenance costs and specialized IT staffing requirements by providing a componentized cloud-based architecture, built-in access to cloud services, and API-based connectivity. The cloud significantly reduces the need for on-premise infrastructure and maintenance, enabling IT to auto-scale resources on demand and dramatically lower hardware and maintenance costs. Developers and engineers with expensive, specialized expertise are no longer needed to manage and maintain outdated technologies. Modern TMS solutions also enable full digitalization of end-to-end supply chain operations, eliminating manual and paper-based processes and enabling companies to easily handle exponential transaction growth, without increasing maintenance costs or the burden on IT.
Case in point
Newport Tank Containers partnered with Rappit to create a tailor-made, cloud-native TMS that integrates and automates key aspects of the business including fleet management, sales, operations, and finance. Newport’s new TMS lowers operational costs and decreases errors while adding data-driven intelligence to decision-making. Built using modern, cloud-based technologies, the solution has enabled Newport to digitize their end-to-end transportation management process, including invoice documentation. As a result, the company has reduced processing time for sales and operations by 50% while facilitating 1.5 million transactions per week.
- Poor user experience
Legacy TMS systems have complex, text-based user interfaces that were designed before the advent of modern UX principles. As a result, the learning curves are steep, and employees may be required to perform manual data entry and far more clicks than necessary to complete a task. Legacy interfaces were also designed for desktop use only, often requiring users to do a specific task from a specific workstation. These obstacles cause errors, frustration, delays, and other operational inefficiencies. Most employees (especially younger generations) expect to use modern, intuitive interfaces that are optimized to complete specific tasks and can be accessed from anywhere. This is particularly true as employees increasingly rely on mobile devices to get work done.
Solution: A modern TMS interface should be designed with the user experience in mind and incorporate modern UX principles and automation to streamline task completion and provide real-time access to information to enhance decision-making. Interfaces that offer a more satisfying user experience by enabling streamlined task completion will reduce training time, increase employee engagement, and provide a more attractive environment for new talent.
Case in point
The new interface on NewPort Tank Containers’ next-generation TMS has helped simplify all key processes, including onboarding new employees. The time it takes for new employees to learn the software has been reduced by more than 30%.
- Security and compliance risks
Legacy TMS solutions were built before modern cybersecurity threats emerged and therefore lack modern security features such as encryption, multi-factor authentication (MFA), and real-time threat detection. Also, legacy integrations with external systems are far less secure than modern API-based connections. As hackers continue to evolve their techniques, logistics companies are increasingly vulnerable to data breaches and severe losses caused by successful ransomware, phishing, and unauthorized access attacks.
Similarly, legacy TMS solutions were not built to handle the modern explosion of global trade regulations. This makes it difficult for companies to comply with increasingly complex and evolving rules such as customs requirements, privacy regulations, Hours of Service (HOS) laws, and CO2 emissions tracking mandates. As regulatory bodies continue to introduce new laws, legacy TMS platforms lack the flexibility to adapt, leading to non-compliance fines, shipping delays, and even loss of business.
Solution: While it is possible to integrate some modern security and compliance capabilities into a legacy TMS, it’s extremely complicated and expensive to do so. And no matter how successful a company may be in getting its system up to date for the moment, the evolution of security and compliance is not slowing down. The only way to keep up while keeping costs under control is to migrate to a cloud-native TMS. Cloud-native solutions offer security services such as AI-powered threat detection, built-in encryption, automatic security updates, and automated blocking of unauthorized access attempts. On the compliance side, they offer real-time compliance tracking and reports, automatic rule updates, and global control over data governance.
Evolving your TMS (and breaking free from vendor lock-in)
You know your existing TMS is slowing you down, and now you have a better idea of where and how, but replacing it feels complex and risky. And ripping out the entire system would be too disruptive and costly. The only viable approach is an incremental one – swapping out components over time, migrating data gradually, and layering in new features. However, even that may not work because your TMS software wasn’t built for flexibility. Without open APIs, integrations are difficult and expensive, making even small upgrades something you regularly try to avoid.
According to Gartner, there are multiple ways to modernize your legacy systems. From replatforming onto cloud-native infrastructures with minimal code changes, to replacing and completely overhauling the entire existing application. The key is finding the right strategy for your business and avoiding being pushed into an all-or-nothing approach. Learn more about the different approaches and what Gartner has to say about them in this blog.
Whichever approach you choose, embarking on the right modernization path requires you to break free from TMS vendor lock-in and take control of the evolution of your system. Rappit offers high-productivity, low-code development tools that, unlike traditional low-code platforms, enable you to extract and own any code you create. This means you can quickly and cost-effectively build out and swap in parts of your existing system without being locked-in to Rappit technology.
Whether you decide to rehost existing functions and swap in more advanced capabilities, or gradually replace your existing system with a fully customized TMS, Rappit’s modular modernization approach enables you to innovate and evolve your TMS in a way that minimizes obstacles and maximizes flexibility.
