In Gartner's recent virtual Supply Chain Executive Symposium, Gartner analyst Bart De Muynck shared his views of key trends in the market for Transportation Management Systems, or TMS.
De Muynck said the global TMS market continues to grow at a solid rate, faster, he says, than the overall market for supply chain software. The key catalyst, De Muynck said, is strong interest in automating existing logistics processes.
Supply Chain Digest Says...
|
 |
Solutions with advanced features are now available, De Muynk says, at lower costs and with faster and easier implementations.
This makes TMS attractive to medium and even small shippers, De Muynk says. |
 |
What do you say? |
| Click here to send us your comments |
 |
| Click here to see reader feedback |
|
Across supply chain software applications generally, there is growing adoption of Cloud-based software and the subscription-based cost model that often accompanies that, De Muynck said. He noted that TMS has been a leader in Cloud deployment compared to most other supply chain application areas. That, he says, is in part due to the perceived advantages in achieving trading partner and carrier connectivity when using Cloud deployment.
As result, traditional TMS companies are all now offering Cloud-based options, to keep pace with what De Muynk calls "Cloud-native" TMS providers – vendors that built their companies on a Cloud solution from the very start.
Indeed, De Muynk predicts, spending on Cloud or SaaS-based TMS will rise from 37% of the totl in 2017 to a dominant 65% by 2022.
De Muynk identifies a number of other key TMS market trends:
1. Vendor Acquisitions: Leading TMS vendors continue to make acquisitions of complementary technology vendors, such as those providing claims management, transportation capacity planning, and parcel shipping solutions, as just a few examples.
2. Last Mile Focus: With the rapid growth of ecommerce, De Muynk says TMS companies are naturally beefing up their parcel and last mile delivery capabilities. He also sees traditional parcel vendors expanding their own capabilities.
3. Growing Importance of Freight Pay and Audit Capabilities: The increase in parcel shipments is also driving TMS vendors to add to capabilities in this area, including through some recent acquisitions.
4. Partnership Activity: Traditional TMS vendors are increasing partnering with digital freight vendors, such as Uber Freight and many others, as well as transportation visibility vendors.
The bottom line is that a significant level of deal activity in the TMS sector is likely to be seen in 2020 and 2021, De Muynk said.
Users of TMS are also driving changes, De Muynk said. This includes what he calls the "democratization of TMS." What does that mean?
(See More Below)
|
CATEGORY SPONSOR: SOFTEON |
|
|
| |
|
|
Historically, the advanced features of top TMS solutions were only really affordable to large shippers with sizable freight spend. Those TMS's also required lots of resources to implement, taking many months if not longer.
Now, however, driven by Cloud deployment and a new generation of TMS vendors, solutions with advanced features are now available, De Muynk says, at lower costs and with faster and easier implementations.
This makes TMS attractive to medium and even small shippers, De Muynk says.
He also sees growth of networks of carriers and especially shippers using a given vendor's TMS developing. Now, there is growing interest, De Muynk says, of collaboration and integration these vendor networks – a network of networks.
He also sees a key trend in terms of TMS functionality, with some new vendors combining traditional TMS capabilities with capacity planning and real-time visibility functionality.
What are companies really looking for in TMS? As shown in the chart below, Gartner research shows not surprisingly that creating operational efficiencies tops the list, followed by improved visibility and better cost management.
The good news, De Muynk said, is that the total cost of ownership for TMS in general continues to trend down. He added that as companies have fewer staff in transportation and supporting IT functions, TMS vendors need to provide solutions that require fewer resources needed to implement and support these applications over time.
This is happening, De Muynk says – just not fast enough for some shippers.
Any thing to add to Gartner's TMS trends? Let us know your thoughts at the Feedback section below.
|
