When a trucking company looks at buying some new software, it considers the economics of the decision (how much will it cost?), the computer software integration aspect (will it work with what we have?) and the marketing possibilities (how can we promote this to our customers?). Rarely, however does it take a philosophical approach to the decision. But maybe it’s time to take that route.
Ann Grackin, CEO of ChainLink Research Inc. in Newton, Massachusetts certainly believes so.
“Picking software always involves the Socratic question to begin with, which is ‘who am I?’ I think that’s the biggest mistake users make is they don’t think about who they are and create some kind of short list because somebody says, ‘these are transportation software people,’ and then they become lost,” she told Fleet Executive in an interview.
While company self-awareness is a very basic approach, it is one that will become increasingly necessary during the next few years as the transportation management software (TMS) industry evolves, and as choices and options for partners start to become limited as the market consolidates.
In a recent piece of analysis, Grackin looked at the question of whether any one company could turn into a TMS gorilla and gobble up a large percentage of market. In her mind, Grackin says if a company can garner between 10% and 30% the transportation industry, it will be well on its way to being crowned the reigning King Kong. As to which company will climb to the top, she has a strong contender in mind: Canada’s own Descartes Systems Group Inc.
“Without a lot of acquisition, we won’t get there. Descartes is acquisitive type of company,” said Grackin.
Besides both growing organically and being willing to purchase other companies to add capabilities and reach into new market areas, Grackin said she sees Descartes becoming the industry leader because it’s a transportation company at heart.
“There are other companies that have transportation solutions inside of them that are big, like Oracle, like SAP, like JDA. But they do other things. Oracle may be making $100 million a year off of their transportation software, which I doubt. SAP certainly isn’t. SAP makes a lot of money, and it is numero uno when it comes to supply chain planning, but when it comes to transportation, they’re an also-ran, late-to-the-game, kind of player. So even though there are people out there with phenomenal engines and global reach, they haven’t so far shown they can be the key player in transportation.
“Descartes on the other hand, they don’t do everything, but they sure do a lot, and they stay focused on transportation. That’s the key with them—lot of the other guys defocused themselves, and that makes a huge difference. When somebody says ‘who am I thinking about [as a possible gorilla]?’ there are a few people that come to mind, and Descartes is one of them.”
The other TMS vendor Grackin lists as a potential gorilla is MercuryGate International Inc. because it has a similar approach to both the industry and to the design of its systems.
“They are all cloud. They were architected right from the beginning to be in the cloud, so therefore integration is absolutely essentially to their success. These companies are going to spend a lot of their time making sure every single connection in every type of format—EDI or HTTP, or spreadsheets—will work all the time. It’s not that other transportation software companies aren’t doing that as well, it’s just that certain ones really have invested a heck of a lot more time and expertise and dollars into making sure it works.”
Even if one company does come to dominate the market, that doesn’t mean every trucking company should rush out and buy its software. As Grackin noted, it’s important to first understand the specific business needs and then see how well any vendor’s software meets those needs, including integrating with systems operated by shippers and freight forwarders, not to mention Customs offices, insurance brokers, and industry-specific regulatory and compliance bodies. Plus, of course, there are all the features individual trucking companies require to run their businesses smoothly, and these can range from dispatch functions, to cargo tracking, to vehicle monitoring and hours-of-service recording.
Grackin says trucking companies really must understand their own needs and then ensure the vendors pay attention to those needs and don’t just attempt to wow with every bell and whistle possible.
“Businesses purchasing software don’t write a well-thought-out RFP. That seems to have gone the way of the woolly mammoth, and I think that’s a huge mistake that companies make. Going back to Socrates and Plato, it’s all about know thyself. It’s a huge, difficult task. And it’s not necessarily something that should be 100% cast in stone because once the vendors come in and show their stuff, most time the companies are shockingly and positively enlightened because they are not necessarily aware of what the market has to offer. But on the other hand, not having a systematic approach to selecting technology is a colossal error.”