The following is a guest post from David Landau, Executive Vice President at Cloud Logistics.
For decades, vendors and consultants in the world of supply chain claimed that savings of 10-20% or more could be gained with the implementation of a transportation management system (TMS) or a warehouse management system (WMS) … or just about any other system for that matter. While there is no doubt that many projects see that kind of success, far too many fail to capitalize on the benefits originally promised by the initiatives.
But why do some projects succeed, while others fail? A recent study by Sand Hill Group suggests it’s not the software – only 1% indicated a lack of software functionality as the cause of project failure – but a failure in user adoption that is the main obstacle to success, at least according to 70% of respondents.
The TMS space is no exception, and the symptoms are obvious. One leading vendor offers 15 days of formal classroom training, or three entire weeks of formal instruction for a user to attain proficiency with the system. That’s more than most people take in vacation during an entire year! Almost every other vendor provides (or requires) at least a week of similar training. Clearly, something is wrong with this picture.
Building for the greatest uncommon denominator
Today’s enterprise software packages are so complex because software companies engineer for the greatest uncommon denominator.
In other words, there is a general belief among vendors that if a software package can handle the requirements of the most sophisticated shipper, then it can handle any company’s requirements. These solutions are designed for the top 5%, despite the fact the remaining 95% don’t have the same needs, technical skills or organizational capacity.
So, as an example, say your system is fairly simple: Only 15 unique configuration flags, with four possible settings each. This “simple” TMS would have more than 1 billion possible configurations. And, as overwhelming as that sounds, no TMS has only 15 flags. Double that to 30 and you get more than 1 quintillion (a one followed by 18 zeros) combinations!
What’s worst is that most TMS products probably have at least 300 different flags (many of which a majority of customers never even know exist, much less use on a regular basis) – you can imagine the complexity.
A scaly problem
Why, then, are most shippers faced with these overly complex solutions?
The answer is all about scale. For years, TMS solutions were six- to 18-month projects with costs that started in the high six figures and only went north from there. Only the largest shippers could afford them. Over time, that market became saturated. With the advent of software as a service (SaaS) solutions, implementations are now faster and less expensive.
As a result, the mid-market opened up and the thousands of companies with smaller freight budgets made up an entirely new target profile for TMS use. Two types of vendors emerged to address this market: purpose-built SaaS solutions and established Tier 1 solutions that try to scale down.
Despite the large new market available to them, many purveyors of newer solutions became enamored by the more lucrative fees available with larger, more complex projects. This brings us right back to the greatest uncommon denominator — products that are simply too complex. It is far easier to scale up than it is to scale down.
Why easy matters
All of this brings us back to the importance of ease, and more specifically, to the importance of proper user-centered design. It really comes down to two areas: value and promise.
When users initially start working with a new product, they begin in exploration mode: they experiment, tinker and poke around, learning new features. But once they figure out what they need to do for their job, they quickly shift into task-execution mode and that means doing the bare minimum to perform their daily tasks.
But if your organization can create a culture of continuous improvement and equip your associates with the tools and freedom to explore, they could unlock greater value from new systems. With the approval and means to navigate, workers are encouraged to adapt and innovate in ways never even considered during the initial software selection process.
The second area is all about the future, or more specifically — talent. Believe it or not, application design plays a key part in attracting and retaining supply chain talent.
Baby Boomers are retiring, and the millennial generation that is filling the talent gap left behind are less likely to accept green screens and Windows 95-like software. When a twenty-something walks in during an interview, and sees an old, clumsy, difficult-to-use solution on the screen and imagines working on it 40 hours per week, he or she may walk out.
Well, maybe not. But the point is, this generation grew up with iPads, Facebook and Twitter. Building the next wave of supply chain leadership requires engaging and exciting them. More than that, empowering the current generation of supply chain team members to maximize corporate investments in logistics and technology requires solutions that are easy.
There is no reason for enterprise software to remain as complex as has been in the past. Newer applications are progressing on this front: intuitive design, user experience are now being stitched into systems as a key part of the optimization package, but more can be done. Think of Facebook – despite the myriad applications like video, surveys and commerce, most users require little no training to adapt. Easy does it: simple, engaging and intuitive software would better serve supply chains as they progress to the future.
David Landau is the executive vice president at Cloud Logistics. His responsibilities include sales and marketing leadership and business development strategy. Prior to joining Cloud Logistics, he spent 19 years at Manhattan Associates, with various leadership positions. He is a frequent speaker at supply chain events and is regularly quoted on industry-specific topics. Landau holds a bachelor’s degree in mechanical engineering and materials science from Duke University.