Transport Weekly | Low price trap
Nowadays, more and more companies are aware of the importance of using digital tools to manage transportation. Many companies are consciously aware that they should choose a TMS and search on the market. In the TMS selection process, the price is obviously a point of concern to everyone. However, from previous experience, if price is taken as the most important consideration, in the end buyer often fall into the low price trap.
The core purpose of investing in TMS for a company is to gain management value. The cost includes not only the cost of software procurement, but also the cost of process reengineering, the cost of implementation and promotion. If you pursue low price or even cost free only which leads to failure of getting expected management value, it is not a cost-effective investment. Lots of previous practice tells us that free lunch sometimes means more investment later. In order to cover own cost, the supplier whose price is far lower than the market price will save money in other ways including develop fewer functions and reduce the after-sales service level, or they will charge additional customization fee later.
Therefore, the primary considerations for TMS selection should be whether the TMS functions match your business, if the solution is perfect, if it’s leading technology, if the user interface is friendly enough, how is their customer support capability, and whether the supplier has platform leadership. These are the real guarantees of the best return on investment in TMS.