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Choosing between a hosted or cloud-based transportation management system (TMS) is not a decision to take lightly. It follows a complex process from identification of needs to the evaluation of vendors, notes Inbound Logistics. More importantly, inadequate evaluation of hosted or cloud-based TMS solutions will result in lost opportunities for efficiency gain. To ensure they make the right decision, Shippers need to conduct a thorough evaluation armed with TMS selection criteria and understand the benefits of each platform.

What Exactly Is a Hosted TMS?

Hosted TMS refers to a transportation management system that resides on premise. In other words, the platform is contained within the servers of your hardware, creating an opportunity for risk to materialize. All data is retained within the on-premise solution, and a disaster could lead to the complete loss of data. Depending on the scale of your TMS, this could mean the difference between operating continuously or suffering months-long setbacks when an issue arises. Obviously, data backup is possible. However, the data backups will always remain out of date, reflecting only the information collected within the latest copy point.

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What Are the Benefits of a Hosted TMS?

Utilizing a hosted TMS solution does provide certain benefits. It may be designed to work seamlessly and together with your existing legacy ERP platforms. Since the solution resides in house, shippers have fast control over its resources and functions. They control the maintenance, upkeep, and improvement of the system. This is an excellent point for maintaining cost control over TMS implementation and maintenance.

What About Cloud-Based TMS?

Cloud-based TMS leverages cloud computing technologies to move the entire platform off-premise. In other words, the data and platform reside within the cloud, so information is continuously logged between access points and the cloud itself. This information also updates in real time, depending on the level of connectivity within your facilities. As a result, the risks of data loss decrease. Furthermore, cloud-based platforms are designed with integration between different systems in mind. They leverage the latest connection technologies, such as electronic data interchange and application programming interfaces (EDI and API), to enable integration with legacy systems. More importantly, cloud-based platforms are more versatile, allowing for a more diverse group of functions than their on-premise counterparts.

Is a Hosted or Cloud-Based TMS the Better Option?

That is a loaded question. It really all depends on the ability of your operation to continue within its current profit margins without risking setbacks from your competitors’ advantages. Amazon will come for your organization. It is only a matter of time. The value of a TMS on a cloud-based platform offers critical benefits over on-premise solutions. These include:

  • Reduce the need to store equipment, software, and servers, as well as employ additional IT staff to handle the system’s quirks and needs.
  • It generally costs less than on-premise platforms, but again, extensive modification of cloud-based systems could adversely affect the return on investment.
  • Cloud-based solutions are also designed with scalability in mind, leveling the playing field for smaller companies, critical to ensuring small businesses can compete with the likes of Amazon and major retailers on the planet.
  • Cloud computing allows for centralized access, reducing barriers to system use and adoption. Since the system resides within the cloud, virtually any user within your organization could access the system, enabling more of remote working and less time spent change to the proverbial desk.
  • Cloud-based platforms offer cybersecurity advantages too. In today’s age, the slightest data breach could result in severe consequences for an organization, including a sense of betrayal among your consumers, penalties assessed by government authorities, and more. Cloud computing eliminates the physical, cybersecurity risk, and it empowers operations with the latest encryption protocols, including the AES 256 standard.
  • Advanced capabilities and cloud solutions empower shippers with more information through big data analytics. Big data analytics are resource-consuming functions, and it is impractical to attempts deployment with outburst using a cloud-based platform. The connected nature of the cloud leverages real-time data through many algorithms and cross-sectional analyses to render the most important metrics and ensure your organization headlines with key performance indicators (KPIs).

Listen to “TMS Adoption & ROI Improved thru Effective Change Management” on Spreaker.

Cloud-Based Solutions Will Become the Standard for TMS Use

Regardless of what your shareholders expect, the world moves toward the side of progress, and this arch predicts a cloud-based future. With time, all on-premise platforms will gradually be replaced by cloud solutions, and those that fell to adapt to the changing demands will face the uncertainty of bankruptcy lost competitive advantage and much more. Instead of continuously weighing the benefits and drawbacks to hosted or cloud-based TMS solutions, make the smart decision. Put your organization on the path to success by building the business case for a TMS today and continuously refining operations through its expanding capabilities. Ask us for a demo of our TMS, the Cerasis Rater, and see how it can benefit your company today.


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