When Buying a TMS, Know the Limits of an RFP Process

J.P. Wiggins | 3Gtms

To help you deliver freight at the lowest cost that meets customer requirements, a transportation management system (TMS) has to learn and understand the complexities of your particular business. This level of intimacy, however, is often not appreciated by first-time TMS purchasers. Many companies make their TMS vendor selection as if they were buying accounting, HR or other back office software – and this approach is typical when finance leads the selection or corporate buying processes are followed.

At the heart of this misguided process is the traditional request for proposal (RFP). While RFPs have their place in certain scenarios, they’re an out-of-date idea when it comes to a TMS selection because a TMS is a core part of your operations. And like other supply chain execution software, operations usually can’t be described by check boxes or summarized in a statement. There is just too much complexity and too many variables.

Let’s look at common mistakes first-time TMS purchasers make by relying on the RFP process.

 

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You’re Focused on the What, Not the How

Understanding what features to expect from a TMS is important; understanding how different TMS systems execute on those features is a game-changer. Experienced TMS buyers know that checking the box on an RFP doesn’t actually mean the feature will work for their operations. You need to understand how a feature works.

Let’s use the analogy of a self-driving truck. It’s easy for a driver to take a load from Pittsburgh to Chicago. However, it’s another thing to have a self-driving truck do the same. At a high level, we can define what it takes to drive a truck from Pittsburgh to Chicago, but the details of autonomous driving that the software has to learn is incredibly complex. Getting software to run your operations in some ways is similar, as it’s easy to define it at a high level but, as they say, the devil is in the details.

This is why using a classic RFP for TMS selection can be a rookie mistake; it prevents you from engaging in the details with your vendor. A request for information (RFI) can be helpful for determining your short list of vendors and sorting through the fog, but it’s still important to get to the how: get in-depth demos and ask for walk-throughs of your scenarios to really learn how the software fits your specific operations. Understand how it fits in today, and (just as importantly) how you as the user can adjust and change the software. The TMS has to be simple, so you can understand it and flexible enough to change as your business evolves.

In addition, have your potential vendors walk through how to change screens, adjust parameters, change delivery rules, create workflow and onboard new clients. Don’t be bashful and don’t rely on the check boxes that say a TMS can do it; find out the gory details of what works and what doesn’t. Ask to get an implementation plan and really look at the steps. At the vendor selection stage, you should understand the details of the implementation steps as if it were your own. These “how” questions will help you clearly understand and appreciate how each vendor addresses your
needs differently.

Underestimating Customer References

Your TMS vendor should have an active partnership approach rather than a passive supplier mentality. These soft skills are hard to quantify with an RFP, but it’s where the rubber meets the road: does your vendor follow through on what they say? Are their successes as great as they say they are?

Any vendor can produce a few good references, but you’ll need to find the unhappy ones to get a real sense of their capabilities and culture. It’s better to deal with a vendor with dozens of happy customers and few, or no failures, versus one with hundreds of happy customers and hundreds of failures. Ask, or look for a complete customer list and select references randomly to contact. Look at the vendor’s list of press releases for new customers and see if those same customers are still on the reference list. Also, don’t be afraid to ask for the vendor’s customer satisfaction rate or attrition rate.

It Requires Homework, Not Check Boxes

Too often TMS buyers don’t do their due diligence. Instead, they select a vendor that can check the most boxes on the RFP, or they are swayed by a fancy sales team that sold into the standard corporate buying process. In these cases, the projects have the highest rate of failure.

Instead, don’t follow the autonomous buying policies that are used for non-operational systems. Look differently at how you buy – and do your homework. Define your business goals and how you want to accomplish them, and really understand how each TMS solution you’re considering approaches your problems and executes the solutions. It may make or break your company, or even your reputation.

J.P. Wiggins is Vice President of Logistics with 3Gtms. 3Gtms, headquartered in Shelton, CT, is a TMS provider for mid-to-large shippers and logistics service providers. He may be reached at jpwiggins@3gtms.com.