The right TMS can boost both productivity and profits by eliminating labor-intensive tasks and giving you time to focus on growing your business. But shopping for a full-featured system can be challenging, even for seasoned software buyers.
So to make sure you don’t suffer from buyer’s remorse, we’ve compiled a list of “don’ts.” Avoid these and you’ll be on your way to buying the right system for your brokerage at the right price for your budget.
1: DON’T make a decision without a plan
A TMS is a major investment in time and money—so you need an efficient process when choosing one. Identify why you are shopping software, what your budget is, and how you will know when you’ve found the winner. You can start with a large number of potential suppliers and weed out many of them quickly. For instance, if you’re a brokerage, even inside a trucking company, you need a broker TMS, not a carrier system. If the TMS was built with managing assets in mind and you don’t have trucks, step away.
If you start with 15 vendors and narrow down to eight, you can do a high-level demo with those companies. Then pare down to two to three choices and bring in key team members. Go over each aspect of the TMS in detail and grill the finalists.
2: DON’T choose a TMS based on where you want to go, rather than where you are
First things first: Your TMS must meet the needs of your core business. It may seem smart to buy a TMS based on what your current process can’t handle or on where you want your company to grow—but you may miss out on functionality you can’t live without now. So if you own a truckload business and want to move into LTL, don’t start with an LTL solution that won’t address your current needs. Focus on your core business, then add new capabilities.
3: DON’T make your decision based on the Operations module alone
You need to evaluate the entire TMS, not just the part your brokers will use. Once you narrow down your choices to a manageable number, do a deep dive into the functionality you plan to use. If that includes Accounting, get a complete demo with your Accounting team present. They’ll have definite opinions on what does and doesn’t work for them. You’ll even find that with some systems, part will run in Windows and part won’t. Be sure you get the thumbs up from your back office staff before you make a commitment.
4: DON’T forget to ask for the REAL price
You need four words here: “What will I pay?” Once you narrow down your selection to a few vendors and have a good feel for the TMS capabilities, get detailed pricing. Include the cost of all modules necessary to make the system work for you. Go over the costs item by item with the sales rep. Find out if the bottom line really is the bottom line. You’ll be surprised that the answer is sometimes “No.” And that means you could end up with a bill for 25-30% more than you expected to pay for installation, training and extras.
5: DON’T forget to factor in the total cost of ownership
You need to know what it’s going to cost to run the TMS for a few years. So find out the support rates and what they cover, the additional charges for updates (if any), and the typical prices for upgrades. You may discover you’ll pay several times the purchase price to actually use the software for two years. Be sure to factor in all the costs when you look at your budget.
In the end, buying a TMS is a major decision, but a worthwhile one that can make a huge difference in time and money saved and revenues produced from your business.
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Do YOU have any advice you'd like to share about buying a broker TMS? What should brokers look for and what should they avoid? Post your comment below.
Categories: Best Practices and Benchmarks