I interviewed David Landau, Executive Vice President at Cloud Logistics, who discussed Latest Trends in the TMS Market.

 

 

 

 

 

 

I’m looking forward today to hearing your views on the latest trends in the TMS market. My first question: What are the general trends in the TMS market?

 

Thank you, Dustin, and I appreciate the opportunity to speak with you today. The transportation software market is a very mature one. As much as it is mature and has been around for 30 years, it’s really very active today and there a few reasons why. If you think historically about the TMS space, these projects are between 6 and 18 months long, very large, often $1 million-plus investments and really projects that only can be justified by the larger shippers. By larger, I mean companies that spend $75 or $100 million or more annually in freight spend. That being said, that market is largely saturated, but the midsize and smaller shippers really haven’t had the opportunity to take advantage of the TMS technology.

 

When cloud TMS came along, it certainly opened up the market to some of the midsize shippers, but what we’re seeing today is a huge growth in demand in the small and midsize business market for TMS. We’re starting to see new solutions come out in the marketplace that are really very much catered to them and their requirements, which are very different than what the larger shippers really need.

 

What are the implications for the growth within the small and medium-size business demand for TMS?

 

That’s a great question. There are a couple of implications, and the first one really comes around cost. It’s much easier to scale up than it is to scale down, and the TMS solutions that have been around for a long time are very good at the large, complex problems with a lot of optimization and, quite frankly, a lot of Ph.D.’s doing work to help you figure out how to configure that optimization. The reality is, if you’re spending $10, $20, even $30 million a year on freight, there isn’t that much opportunity for freight savings. There usually isn’t that much opportunity for consolidation and optimization.

 

The benefits these companies are looking for are some level of freight savings due to optimization, but also a lot of benefits of savings due to process automation, consistency and visibility. That’s a very different kind of system in terms of how you design it, how you engineer it, how you deploy it, and how you maintain it over the long run. Really, those implications come down to the cost because it can’t be nearly as expensive, or even proportionately expensive as some of the traditional TMS models; but then, it puts a whole new focus on usability of the TMS.

 

How is usability viewed differently today than it was five or seven years ago?

 

I think, historically, in all of supply chain and not just TMS, software vendors  — and I’m guilty of this as well — placed so much focus on feature and function and science and math. Every release was all about cramming in as much new capability as possible, adding flags, adding bells, adding whistles and so forth.

The problem is that all these features and functions increase complexity. I’ll give you an example: All these additional features and flags greatly introduce complexity, and it’s common today to think about the systems with the hundreds of flags, really billions of different permutations and combinations. It requires an incredible amount of sophistication on the user’s part, training by the software vendor, and the burdens of documentation and experience on the system to really be able to use it.

 

If you look at some of the bigger TMS vendors today, they offer anywhere from five to 15 days’ worth of classroom training to become proficient in the system. Think about that. Fifteen days – that’s more time than most people take in vacation devoted to the vendor’s expectation that you spend it in a classroom, learning to be proficient their TMS. You just can’t do that in small and midsize businesses, or the midsize shipper. It’s got to be a system that’s very easy to use, very rapid to deploy, and, quite frankly, one that doesn’t intimidate and prohibit exploration of the system and innovation of the use of the system.

 

The other aspect of usability that’s important to know is to think about the users that command the system. That once meant somebody who grew up in the ’80s and ’90s era in technology, where you were using green screens and client-server applications that are very sophisticated, very complex, and, quite frankly, not that user-friendly. But if you think about the folks who are coming to technology today and the supply chain talent that’s in there today, it’s the millennials.

 

They’re no longer coming; they’re here and they’re replacing a lot of the retirees from the baby-boom generation who are used to these green screens and client-server technology. The new face of supply chain is used to Facebook, Twitter, Instagram, iPads; they’re used to a whole different approach to user interface. Quite frankly, you don’t need training to use Facebook, even though it’s actually fairly sophisticated in how it can be used. What this means is that user interface is not only critical for how you process automation, but it’s also critical for hiring and retaining critical supply chain talent.

 

What are some of the benefits to smart, user-centric design besides the obvious?

 

The obvious is there, certainly, in terms of overall client satisfaction, but there are also studies out there that show that for software projects, very few of them actually come close to attaining the value and the benefits that we’re expecting. Less than 1 percent of them actually have, and in that research study, they found that those who didn’t receive expected benefits said it was because of a lack of feature function. Seventy percent have said that it was due to a lack of user adoption.

 

If you have a smart, user-centered design that’s easy to understand and easy to adopt, you’re far more likely to get the benefits that you planned on with a project than you would if you had a much more complex user interface. Above and beyond that, what happens is, if you’re a user and using software for the first time, you really focus on being in exploration mode. You’re spending time poking around the system, figuring out how it works, and figuring out how you need to do your job.

 

But that’s when the switch flips. Once you know how to do your job, most users go into task-execution mode. Simply put, how do I do my job day today? They never really learn to use the system beyond their minimum need. If you have good user-centered design, one that’s very intuitive and almost self-learning, then it becomes a different story. Then you’ve created a culture and environment of exploration, where it’s safe to explore. What happens is, the people who know their job best on a day-to-day basis become the people who best learn the system the best on a day-to-day basis, and figure out in a new way how they can use the system in ways they never planned. That’s really where it gets very exciting, because now you’re starting to get benefits innovation that are above and beyond anything you previously planned. It’s really quite exciting as a huge, uncapped potential for a lot of companies out there.

 

Thank you, David. Can you provide a brief background of yourself?

 

Sure. My name is David Landau. I’m the executive vice president for a company called Cloud Logistics. Cloud Logistics is the newest and most innovative provider of cloud-based transportation-management systems, so, obviously, this is a topic that I know quite well. I’ve been in the industry for over 20 years, and spent time with some of the largest supply chain software companies in implementation and R&D, marketing and sales, and I’ve most recently taken a leadership position at Cloud Logistics. Prior to being in this space, I graduated with an engineering degree from Duke University.

 

Thanks for sharing today.

 

Thank you, Dustin; it’s been my pleasure.

 

 

 

 

About David Landau


 

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David Landau


Executive Vice President at Cloud Logistics


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