Wednesday, June 30, 2010

A SaaS Model for 3PLs

Adrian Gonazlez contributed the following to the Logistics Viewpoints blog:

Time-to-value is among the most important criterion companies look for today when investing in software. It is one of the main reasons why software-as-a service (SaaS) has gained so much traction in recent years, especially in the transportation management systems (TMS) market. And during this recession, as customers have become more risk adverse and more focused on quick ROI, even traditional enterprise software vendors like SAP have aligned their product offerings and messaging around “easy-to-consume” solutions.

Time-to-value, however, has not caught on as much in the 3PL industry. The 3PL evaluation and selection process often takes many months to complete, sometimes more than a year. And the rollout, in many cases, is no different than a “big-bang” ERP implementation: long, painful, and risky.

Has the time come for the 3PL industry [and third-party fulfillment sector] to develop a SaaS equivalent—i.e., an easy-to-consume, quick (less than a year) time-to-value service offering?

...if you are a 3PL, ask yourself these questions:
  • Do we have service offerings that are “easy to consume” and provide quick time-to-value or is our sole focus on selling big ticket, large scope, hand-everything-to-us offerings that are risky and time-consuming to implement? There is still a market for the latter, but the market for quick time-to-value offerings is even greater.
  • How can we package together some of our existing IT capabilities, assets, partnerships, and talent to create quick time-to-value service offerings? For example, can we create a service that combines all of these elements, priced in a subscription model, to help companies gain greater control and visibility of their inbound operations?
  • If we are increasingly competing against software vendors, and we sell to the same audience, what is our response to their time-to-value proposition?
Time is the new currency for achieving competitive differentiation. Don’t waste it.

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