A common question in transportation management and logistics software often arises: build or buy? Is it better to build a transportation management system or buy logistics software?
The build vs buy debate arises in many industries – not just in the transportation and supply chain space. Let’s consider the build vs buy question from a different angle: home improvement.
Have you ever completed a truly successful remodel in your home? Not painting a room or changing a light fixture, but something that needed plumbing and electricity and a knowledge of buildings and construction. Quickly, that do-it-yourself project creates a lot of costly growing pains. The same is true for trying to build your own transportation management system.
Let’s take a closer look.
Build vs Buy: DIY Mentality of Logistics Software Purchase
If you’ve ever considered a remodel project, it is easy to look at the cost of materials, compare that to what contractors would charge you for the work, and think, “I have YouTube. I can do that myself.”
It’s easy to compare the TMS build vs buy costs and come away with an “I can do that myself conclusion.” However, if cost was simply a matter of materials and time, then many companies would go out of business.
Not quite. You’re not accounting for the true cost of ownership.
Security Risks of a Do-it-Yourself TMS Build
Software is an ongoing investment to maintain and upgrade over time. A decade ago, if you were building logistics software in-house, you likely developed something that was built to sit on an on-premise server. How are you going to take it to the cloud now? How’s your information security?
Logistics Software Development: The Talent Factor
Continuing Costs of Logistics Software Build: Education and training
If you build your own TMS, you’ll need to create video training libraries. Don’t forget that someone needs to provide software training for your staff and your customers. How are you accounting for employee turnover and onboarding when it comes to keeping everyone up to speed on using the software – and any advancements in your technology?
TMS build projects start off well-intended. However, as in the case of construction or home remodeling, software development delays happen. You start with optimistic timelines and a budget. Fast forward 2-3 years down the line, and you’re still struggling to produce a minimum viable product. The build is behind schedule – and potentially over budget – then you’re forced to think about omitting “must-have” features so you can finally put your software to work at a reasonable cost.
In an environment affected by delays, that initial $80,000 per year software purchase cost looks pretty good … except you’re too far invested in your TMS build to scrap it. And remember, during the time you’ve spent trying to develop your logistics management software, all the processes that you needed a TMS to support still haven’t been improved. What’s the opportunity cost to your business for that kind of delay?
TMS Build vs Buy: 2 Questions to Answer
So sure, you can build a TMS. But why would you want to?
Essentially TMS build versus buy will always come down to two questions:
- Is your core competency software development?
- Does your ROI analysis account for the true total cost of ownership?
Unless your answer to both of those questions is “yes, absolutely,” you probably shouldn’t attempt to build or renovate a transportation management system.
This is an area where experts exist for a reason. Instead of dividing business resources between your core competency and software development, you can buy a proven TMS product and can start realizing business value.
The quickest path to business value is buying a configurable TMS. One that can change and grow with you as your business evolves.
The MercuryGate TMS is an industry leader in freight under management across all modes. It is pre-built to support integrations to ERPs, load boards, and visibility providers. Likewise, MercuryGate TMS is equipped with an API that connects you to the largest digital freight marketplace in the industry. We’ve even helped customers transition from internal builds to our TMS platform.
Calculate your potential Saving While Using an enterprise TMS
MercuryGate Experience Fuels TMS Value
MercuryGate has spent over two decades building and refining the best TMS on the market. We accomplished that because transportation management software is our core competency.
Now that you’re convinced that “buy” wins the build vs buy debate for TMS, request a demo to learn more about our portfolio of logistics software solutions. Our transportation management experts can clearly map out your path to business value with the purchase of the MercuryGate TMS.
