Software as a Service (SaaS): The versatile supply chain option
-- Logistics Management, 12/1/2009
A self-proclaimed proponent of the SaaS movement, Adrian Gonzalez of ARC Advisory Group sheds light on the value of on-demand software options in our second session. In the session, he explains how SaaS works, how logistics and supply chain managers are currently using the technology, as well as exposing a few emerging SaaS applications.
Early in the session, Gonzalez defines SaaS as software that’s not installed on any computer or server located at your company, but accessed from a third party via the Internet. While SaaS is not a new concept, Gonzalez says it’s a “growing” topic that more and more companies are taking an interest in. Boasting shorter implementation times than “purchase and install” options, and less upfront investment, SaaS solutions are particularly useful for shippers that are in the process of “upgrading existing solutions, or in need of new solutions.”
Naming Transportation Management Systems (TMS) and Global Trade Management (GTM) systems as the two software packages most applicable for SaaS, Gonzalez says the delivery method makes the most sense for “business processes that are inherently network-centric, processes that involve extensive communication and collaboration between different trading partners.”
According to Gonzalez, SaaS appeals to companies of all sizes, and across most industries. He also discussed pricing options, noting that they range from upfront license fees to payments-per-transaction. Most common, he says, is a one-year to three-year subscription model with monthly payments.
That investment can result in a significant payoff, says Gonzalez, who cautioned shippers not to view SaaS only as a software deployment, but also a platform for benchmarking and continuous improvement. Expect to see iPhone-like innovations in the future, he says, with applications for procurement and carrier scorecarding as viable possibilities. “Going forward,” says Gonzalez, “we’ll see business models and payment structures that facilitate adoption of SaaS across a broader range of companies and users.”
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