Digital transformation - the use of new, fast and frequently changing digital technology to solve problems - has become increasingly important over the last decade. However, there always existed the option of staying with the status quo. Not only was it more affordable and easier in the short term to avoid investing in new technology, processes, and retraining, there was no need to because businesses that avoided digital technology were only at a slight disadvantage compared to those who did.
Nowhere was this more prevalent than in the trucking and logistics industry, where declining margins for carriers and a long upheld status quo meant very little investment ever went into the adoption of new digital technologies. In fact. a significant portion of trucking companies in 2019 were still using on-premise software.
In fact. a significant portion of trucking companies in 2019 were still using on-premise software.
However, this can no longer be the case. The outbreak of COVID-19 anf the ensuing quarantine and chaos has forced companies to adapt with new digital strategies or risk quick obsolescence. So, what are some of these adaptations that companies - especially in logistics - will have to make?
Move Away From On-Premise Software
The first and easiest step towards digital transformation is to ditch the on-premise software for more flexible cloud-based SaaS options. Let's break this down in layman's terms. First off - what is on-premise software?
On-premise software is installed and runs on computers on the premises of your organization. This means that the software physically sits on computers or servers at your office. Twenty years ago, this was the only way to run software. Today, this is both expensive and straight up impossible during situations of quarantine where office employees must work from home.
Moving to cloud-based software lets your dispatchers and other office staff work remotely while keeping company data secure, and reduces your fixed and variable costs.
Not only do you have to eat the costs of purchasing and maintaining the hardware your on-premise software runs on, your employees either need to bring that exact computer home to access their mission-critical software applications or use an expensive and cumbersome VPN (virtual private network) to work remotely. This not only stifles employee freedom, but makes them less productive while increasing your costs.
So, what's the solution?
It's actually simple. Adopting cloud-based software is not only easy in 2020, it's cost-effective too. For example, it can take as little as half an hour to move your dispatchers or account managers from an on-premise ERP to a modern solution like FreightPath. In fact, with the help of our dedicated onboarding team and advanced technology, companies like JOS Group were able to migrate their entire carrier network - thousands of lines of prior history - over to FreightPath seamlessly with the help of our customer success team.
Moving to cloud-based software lets your dispatchers and other office staff work remotely while keeping company data secure, and reduces your fixed and variable costs. Still not convinced?
Let's do a quick cost analysis. For example, let's say you have a team of 10 dispatchers and account managers who need to access your dispatching software. If you wanted to use an on-premise software solution, it would cost:
- $3000-5000 for an on-premise server
- $10/month/user for a VPN service - i.e. $100 monthly for your 10 person team
- $1000-10,000 for on-premise ERP software
- And this doesn't even factor in maintenance, support, onboarding, installation, or upgrade costs!
With cloud-based and SaaS (software as a service) software - you can simplify that headache into one simple monthly cost. For example, if you decide to move your 10 dispatchers to FreightPath, it could cost as little as $300/month total. Not per user. Total!
It's a cost advantage, a convenience advantage, and one that allows your business to continue operating at full steam even during times of crisis and isolation like the COVID-19 outbreak. It's a no-brainer.
Adopt Software That Supports Real-Time Collaboration
What's the best part about working together as a team in an office? For us at FreightPath, it's the ability to bounce ideas, collaborate, and work with each other. That kind of instant collaboration has long been why every business had a physical office and encouraged employees to be physically present.
That's why the COVID-19 outbreak made so many managers and business-owners panicked - how will my teams collaborate when they're working remote? How will I know what work is being done, who did it, and how will my team work on projects together?
Take the example from the dispatch team at Tretan Inc - account managers work with clients to setup delivery times and schedules, a separate operations manager works with partner carriers to find the best fit and rate for the route, and then a dispatcher sends the shipment details to the partner carrier and consignee. Finally, the account manager is responsible for provided client support, answering check calls, and providing tracking information.
This requires a symphony of collaboration not just between three different people on the Tretan team, but also with the client, consignee, and partner carrier or driver, who are outside the organization. Especially when everyone's working remotely, this would be impossible without software that supports real-time collaboration.
How will I know what work is being done, who did it, and how will my team work on projects together?
In this situation, the Tretan team was able to leverage FreightPath's real-time sharing and collaboration features to work on shipments together, access shared documents, dispatch shipments to partner carriers, and share tracking with clients.
Imagine this in your own organization - how many of your processes require collaboration or cooperation between multiple team members? What about projects that require collaboration with other organizations outside of your own? For the trucking industry, which thrives on networks and relationships, it's probably close to 100%.
These are just two of the ways that show the critical importance of digital transformation - especially for logistics. With the COVID-19 outbreak, these strategies aren't just important to take an advantage, they will determine which companies will succeed and which will fail over the course of these difficult times.