Global Logistics Power Plants

Why you should rent technology instead of buying it


The on-demand innovation for logistics lies in building an underlying platform — the data hub. The idea is that all customers of a software package share the same infrastructure, the same integrations and the same, ever-widening network of partners. Often the whole stack is presented as a portal or platform. The costs to build, maintain and expand the system are amortized across all users, giving users capabilities that would be impossible to build on their own — and at a fraction of the cost.

But that’s not the end of the story. There’s a huge issue with data normalization. Integrations alone are not enough. Take a single port: Hamburg, for example. If you look at just five ocean carriers and how they write down the port of Hamburg in their outbound customer shipment status data feeds, you will find nine different versions (e.g., HAM, HB1, DEHAM, DEHBI, etc.) Now, expand this to all origins and destinations across all carriers in a large supply chain and you begin to see the complexity that must be dealt with. On a shared platform, a single intelligence engine factoring in all known data approaches, common typographical errors and reference IDs is used by all customers of that system. As new data formats are encountered, they are added to the engine to the benefit of all. This system has evolved based on the processing of millions of messages, across thousands of customers over many years. This intelligence is made available “out of the box” when a new customer joins an on demand platform.

And finally there’s the software itself. With on-demand, all customers share the same, most up-to-date instance of the software. The only tool required to secure access from anywhere on the globe is simply a Web browser. Unlike traditional license-and-install software, where a customer needs to buy and install upgraded versions, all users of on-demand get regular updates as part of the ongoing service. Most upgrades are customer-driven enhancements or extensions. This “tuning” of the solution never ends.

Combine the expanding functionality of on-demand software with a shared, pre-wired data platform and you begin to see the potential of on-demand technology and global logistics management.

Many companies will look to extend their existing enterprise resource planning (ERP) or domestic transportation management systems to handle their global needs. Some will attempt to build a solution themselves. And others will look to their third-party logistics (3PL) providers for pieces of technology. These are all viable options, but they are also all problematic in terms of cost, risk and control.

For leaders who want to control their own destiny, without taking on the up-front risk of traditional software, on-demand platforms designed for global logistics management are in place today and being used by leading importers, exporters and service providers around the world.

Remember that electricity analogy at the beginning of this story? For global logistics technology, the power plant that can electrify your business already exists.

About the Author: Greg Johnsen is executive vice president of marketing and co-founder of GT Nexus and has more than 15 years of sales, marketing and product marketing experience with Silicon Valley technology companies. www.gtnexus.com .

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