The value of a transportation management system (TMS) is directly proportional to the expertise of the people using it. We explored this relationship in our recent posts Turning Tacticians into Strategists and Developing an Analytical Playbook for Your TMS. And the individuals who are best equipped to extract this value are power users.
As industry analyst Steve Banker says in a recent blog post, “What is the point of buying a Ferrari and then having your nearly-blind grandmother drive the car?”
According to Banker, not only should power users be behind the wheel, but these highly skilled professionals represent one of the important benefits that come with an effective TMS solution. He believes that “a greater ability to develop power users” is a key advantage of transportation managed services. Power users are seasoned transportation experts who are adept at getting the most out of a TMS. In an outsourced environment they can take on much of the day-to-day management burden off the shipper’s shoulders, freeing up staff managers to concentrate on more strategic tasks.
The specific role that these experts play in a TMS team varies with the type of application. In a TMC account team, for example, there might be a customer service representative, a logistics analyst, and an operations manager who oversees the team or a specific region depending on the resources required by the client. There is also likely to be a global account manager who is a power user, and who focuses on more strategic metrics and KPIs.
Alternatively, a shipper might choose to operate the TMS itself and to train its own power users. These designated individuals are the in-house experts who must keep abreast of TMS developments.
It is important to appreciate the growing influence of these talented experts. First, as they raise operating standards across the industry it will probably become more difficult for non-TMS users to compete effectively. Top power users excel at wielding the advanced analytical tools that sophisticated TMS solutions provide. Moreover, as the technology continues to evolve – control tower applications are advancing rapidly, for example – this analytical power can only increase. Second, it may be that a lack of power users is the real reason why a system is not performing well, ultimately leading to the decision to abandon the technology.
“TMS is an application area where I’ve seen companies implement a solution, drive real value in the first year or two, but progressively less after that. I’ve come across several companies that have thrown away their TMS after five years or so and implemented a different solution,” says Banker.
What is the reason for this course change? “I usually attribute this to their failure to develop power users, or the loss of the one or two power users they had. If you can’t stay on top of changes to your transportation network, routing guide, service levels, etc., your TMS has no chance of delivering value,” offers Banker.
The growing importance of the power user role raises some important questions for shippers, particularly those that are looking to acquire a TMS or to upgrade an existing system. For example, do they have the resources to provide the ongoing training and career opportunities that these specialists need? Also, how can a company justify such a resource if the power users are not fully employed? This situation can arise in highly seasonal businesses, for instance, where skilled TMS operators are in demand only during certain times of the year.
As transportation management Ferraris become more commonplace on the freight industry’s competitive track, there will be an increasing need for the services of power users. This, in turn, will raise the competitive stakes and pave the way for even higher managerial standards and further advances in TMS technology. In Banker’s opinion, “increasingly the designation of power user will go to those who can effectively use the TMS’s out-of-the-box analytics and emerging network-generated benchmark metrics, as well as those who can generate ad-hoc reports to solve new problems.”