SaaS vs. Hosted vs. Hybrid: Which TMS for Parcel Shipping is Right for You?
Not every TMS for parcel shipping out there, several of which are objectively great, is ideal for your company. After all, your business has a strategy, infrastructure, and budget specific to you, and this landscape might be very different than even your best competitors. Finding the best solution – and the best delivery model for it – comes down to clarifying your needs and articulating what you’re looking to achieve with a TMS for parcel shipping. Only then will you be able to determine which TMS – and which delivery model, SaaS, hosted, or hybrid – can improve your specific shipping environment.
Three Basic TMS Delivery Models
There are a few different delivery models for TMS for parcel shipping solutions: software as a service (SaaS), hosted, and hybrid. Each delivery model has its advantages and disadvantages, and the ideal delivery model for your shipping environment depends on a variety of factors.
Software as a Service (SaaS) TMS for Parcel Shipping
A SaaS, or cloud-based TMS, is a parcel shipping solution that is accessible to users via the internet and is managed by a third-party vendor. Rather than installing and hosting the software locally on your servers, you basically “lease” it on a fee basis.
A SaaS delivery model improves scalability, accessibility, and security – seamlessly connecting people, processes, and third parties to your parcel shipping operations in real time, regardless of location and with minimal upfront costs and IT investment. All users can execute, track, and analyze parcel shipping in a single solution – improving reaction time, collaboration, and decision-making accuracy.
And since the solution provider hosts and maintains the SaaS TMS solution, the software doesn’t monopolize space on your servers or consume your IT resources. The solution provider is responsible for all upgrades, repairs, and support, which means the solution deploys faster and enables you to realize a return on investment quickly — without the hit of an initial investment and with the benefit of accelerated implementation and integration processes.
Also important to note: an additional benefit of a SaaS model is security. A reputable SaaS TMS for parcel shipping vendor will potentially provide more robust data security than you could yourself – particularly if you lack deep IT resources, staff, controls, or expertise.
All told, however, this does mean the solution provider ultimately “holds the reigns” for the tools, technology, and user experience. As you evaluate solution providers, make sure they’re transparent about their product roadmap (and willing to seek client input into it) and/or are willing to customize the solution for clients with unique features and functionality needs.
Hosted TMS for Parcel Shipping
A hosted, or on-premise, TMS delivery model is exactly that – the solution is hosted on your premises (aka your servers). This means the system is reliant on your network and your IT resources. While this can mean faster LAN speed and file access, it also means you need the right infrastructure in place to manage your system’s security, maintenance, IT, upgrades, and support. Many companies find that as they scale (think e-commerce), they quickly become underwater.
For those businesses in highly regulated industries, however, the decision might already be made for them as to whether to house their applications on premise. And in general, on-premise systems are much easier to modify. As a result, many organizations, especially in niche industries with unique shipping processes, prioritize the ability to customize the solution to their specific needs and requirements and implement an on-premise solution.
Hybrid TMS for Parcel Shipping
A hybrid TMS for parcel shipping combines both SaaS and hosted solutions. From the user’s perspective, there’s only one TMS for parcel shipping system in place, but a peek at “the plumbing” will reveal both cloud-based and on-premise servers at work.
A hybrid TMS for parcel shipping solution is ideal for organizations that want control over where their data is stored but realize the benefits of global accessibility. For example, you might store sensitive customer data on your private cloud and use a public cloud to manage the rest of your shipping operations.
Why a SaaS-Based TMS for Parcel Shipping Solution May Be Best
Today, most organizations prefer a SaaS-based TMS for parcel shipping solution over their hosted or hybrid counterparts. In fact, according to Gartner, global SaaS revenues could hit $113.1 billion by 2021, a 30% increase from 2019. The reason for SaaS’s rise in popularity? Companies are attracted to SaaS’s fast implementation times, minimal support requirements, accessibility, scalability, and cost.
A SaaS TMS for parcel shipping solution enjoys a significantly faster implementation time than that of a hosted or hybrid solution. Essentially, it’s ready from the moment the contract is signed. SaaS solutions can be deployed in as little as a few weeks, whereas a hosted or hybrid solution can take months. And because SaaS TMS solutions are cloud based, they’re more time-efficient when it comes to sharing and managing shipping data on an ongoing basis. This means you receive a double benefit: time savings upfront and time savings over the long-term.
If you don’t implement a SaaS TMS for parcel shipping, your IT team will be responsible for fixing bugs, deploying upgrades, and identifying ways to optimize your technology. This is expensive, and it will consume a significant amount of resources in the form of time and labor. In addition, your needs will compete for IT resources against other priorities within your organization, and if you’re on the losing end of that battle, your performance will be sub-optimal – perhaps for lengthy periods of time. Alternately, a SaaS TMS for parcel shipping will have a Professional Services team in place to maintain and optimize your system and help your business evolve.
A SaaS-based TMS for parcel shipping only requires internet access. There’s no need for users to use a VPN or to be on the office network. This kind of flexibility enables everyone from shipping teams to customer service representatives worldwide to have 24/7 access to your shipping operations. And in a dynamic shipping environment, access results in on-time deliveries.
Before implementing a TMS for parcel shipping solution, you need to think long-term and consider how it will scale as your organization grows. If you anticipate that shipping volumes will increase, for example, or that the number of carriers in your network will grow, you need to understand how your solution – and your resources – will manage. SaaS TMS solutions are turnkey technology, allowing you to respond immediately when your needs change without incurring additional (and unplanned) IT budget or requisitioning additional personnel.
One of the main advantages offered by SaaS is the financial savings companies can realize. In fact, for many organizations, a lower total cost of ownership (TCO) is the primary and most attractive benefit of a SaaS-based TMS for parcel shipping, since companies save on human resources to service the application and on overall operating expenses (OPEX).
See Whether a SaaS TMS for Parcel Shipping is Right for You
Your unique business needs will determine whether a SaaS, hosted, or hybrid TMS for parcel shipping solution is right for you. If implementation time, support, accessibility, scalability, and cost are priorities for your organization, a SaaS TMS might be the ticket to improving your parcel shipping operations and generating a quick ROI on the solution.
To learn how to choose the right TMS for parcel solution to meet your business needs, download this checklist.