Transportation Management System - Licensing

Licensing

Recently, these systems have been offered with many different types of licensing arrangements. These different arrangements have given shippers who otherwise would not be able to afford sophisticated software the opportunity to utilize TMS to better manage this vital function. The 4 primary offerings are:

1. On-premise licensing (traditional purchased license)
2. Hosted licensing (remote, Saas, Cloud)
3. On-premise hosted licensing (a blend of 1 and 2)
4. Hosted - TMS free of licensing (same as 2 but free with no license requirements)

Additionally, some software providers have either been acquired or merged with traditional supply chain management consultancies and are now offering shippers "blended" managed and software services as an outsourced process. Primary Tier 1 TMS providers are still independent, carrier and 3PL neutral, and ERP neutral. While ERP providers are moving to improve their on-premise transportation management offerings by adding TMS modules to their existing, implemented base, the advent of Software-as-a-Service or "SaaS" delivery has resulted in a surge of emerging TMS providers. Independent TMS providers have an advantage in that their smaller size and specific focus on transportation process automation enables them to be more responsive to shifting transportation needs. Moreover, transportation is the core competency of the independent TMS provider whereas for large ERP providers, transportation is not a top priority. This is why according to a survey of 400 transportation managers produced in 2012 by analyst firm Peerless Research Group, a plurality reported that load optimization/consolidation, electronic communications, settlement, reporting and integration with other enterprise applications were prime objectives. Shipping organizations are increasingly drawn to SaaS model TMS implementations due in large part to the low level of up-front costs (in terms of hardware and IT resources) required to implement and integrate SaaS-delivered TMS with industry standard ERP systems.