10 Ways to Maximize the ROI of Your Transportation Management System

We continue to see the return on investment for Transportation Management Systems (TMSs) increase, making the TMS one of the best investments a shipper or 3PL can make. Why is the ROI so good on a TMS? The truth is there is no single answer as to why the TMS continues to drive savings and efficiency.

What we do know is that every company is unique, and each is starting from a different level of maturity in terms of technology and processes. For instance, a company that is using manual processes and spreadsheets has a much higher ROI ceiling than those who are moving from one TMS to another or consolidating their activity under a single TMS.

And, while there is not a specific way to ensure you can achieve and maximize the ROI on your TMS investment, we’ve identified 10 ways to increase your odds.

1. Conduct a full ROI analysis

Whether you have started a search for a TMS or are getting ready to start implementation, take the time to do a full ROI analysis. To know what your ROI is later, it’s good to start by evaluating all potential costs associated with the TMS and weigh those against the projected savings. With this data in hand, you’ll know when you get to breakeven on your investment.

2. Focus on the end goal

It’s critical that everyone in your business share a common vision of what success looks like. Define the mission and the objectives. If lowering freight costs is the number one goal, make sure that you’ve communicated that to everyone.

3. Secure buy-in

It’s important that all stakeholders have agreed that a TMS is needed and that there is consensus regarding the implementation plan and go-live. Executive buy-in will help move the project forward and help remove potential roadblocks, while stakeholder buy-in means people are more likely to adopt the new tool when it’s ready to go.

4. Define a clear plan of action

Identify roles and milestones for the implementation project. Hold regular meetings to discuss progress, roadblocks, and the path forward. Having a plan will ensure all involved are accountable and avoid potential pitfalls along the way.

5. Prepare for change

Change management is often an area that is overlooked with many system implementations, but when done well, it can make all the difference. Communicate to every team member what’s happening, and when. And, make sure they understand how the new TMS will impact their day-to-day work life. It will ease concerns and encourage adoption.

6. Evaluate current processes

It’s great that you have this new TMS technology, but if it’s layered on top of antiquated processes, it’s likely to hamper your ability to squeeze value from the technology. Look for ways to improve current processes to make the most of the TMS.

7. Look to the cloud

Cloud-based TMSs allow for faster implementation, often weeks to just a few months. It can be accessed by multiple groups in multiple locations, and it offers the advantage of automatic feature updates without disrupting your workflow when it’s time to make enhancements.

8. Invest in training

The TMS will be a key part of your logistics workflow for the foreseeable future. Make sure you invest in giving your people the training they need to feel successful. They will appreciate the skills they are building for their careers, and you’ll get far greater results by making them the system pros you need.

9. Measure success and celebrate early wins

Following your implementation, track your successes. Are you seeing savings on freight charges? Document them, and communicate them to the team and to the business. Once you reach your breakeven point on the cost of the ROI, make sure executives know. It will help with building your case for future investments.

10. Opt for Transportation Optimization

One industry analyst recently said that if your TMS doesn’t have optimization, he wouldn’t even classify the system as a TMS. Not every TMS has optimization, and still others claim optimization without all the functionality it requires. To maximize your ROI, ensure that the system you choose has proven optimization capabilities.

Ultimately, every implementation is different, so focus on what matters the most for your business and your transportation operations.

Related White Paper

The Shippers Guide to Transportation Management System ROI
It’s a well-established fact in the supply chain field that Transportation Management Systems (TMSs) have a good track record of delivering significant value to companies that need to move freight from point of origin to point of destination. Download Now!