BUILD VS. BUY – FREIGHT RATE MANAGEMENT SOLUTION

 When faced with the necessity to implement technology or software solutions to thrive in an increasingly complicated and dynamic industry, freight forwarding companies of all sizes are challenged to decide between two approaches: buy or develop.

The first option is to purchase software or technology from a third-party provider and customize it to the company’s needs. The second alternative entails developing this tool in-house, reflecting its personality, and responding precisely to its requirements.

So, which is the better option: buying or developing? Both options are valid in principle; each company determines the most appropriate one. Top freight forwarding companies in India assesses herein this article which factors must be considered.

 

COST & MAINTENANCE

 

When we calculate the cost we take a holistic approach:-

Cost = Monetary + Opportunity Cost

You believe building your own proprietary software is easier and more customizable but is it really the actual goal of every organization? In reality, it is impossible to build software without spending a fortune and taking years to develop.

Now, imagine having 10 plants and 10 different versions of software for each of these plants because the process varies from plant to plant, if it still doesn’t scare you and you feel you have enough resources and this is a one-time expense then what will you do in case of a technological upgradation or feature enhancement?

And all of this to build out a Minimum Viable Product and next thing you know, you’ve spent literally hundreds of hours building a tool that is not core to your business.

Whereas, if you buy it from a third-party service provider they already have professionals working for them and are serving multiple customers at once because of which they have a better understanding of your needs resulting in a much more developed product that is flexible and can be applied across various industries and across various plants of the same industry.

SCALABILITY & CUSTOMIZABILITY

 

As the needs change over time there is a perpetual requirement to evolve and customize your software. It means that you cannot just set and forget it. You need to ensure that your support team and developers are always available in-house, and as an organization, you should only build a solution if you can ensure scalability with the increase in the magnitude of operations.

On the other hand, buying a solution from an external vendor will save you time to focus on your primary goal and you will end up with a tailor-made solution that has passed scalability tests in terms of user expansion.

Logistics Companies ensure that the product is customized to solve key industry problems as per your business rules and help you boost your customer serviceability with cutting-edge technology and solutions.

Building a custom-made solution in-house that is also scalable is going to be a monstrous task for which you may not always have the budget and management bandwidth.

TECHNOLOGICAL, FEATURE & FUNCTIONAL ENHANCEMENTS:

How will you feel if your customers switch to competitors due to a broken experience resulting from outdated technology in the workplace?

You either end up losing your customers or reconfigure your software from scratch for each plant and bear the humongous cost associated with it.

Also on the company front, studies show working with outdated technology has a negative impact on the job satisfaction of the employees. It can limit their productivity and lead to frustration whereas if you are buying from an external vendor your tool functionality can be improved via a larger user base’s feedback, meaning you might end up with cool new features you wouldn’t have thought of on your own.

PROBLEM STATEMENT & URGENCY:

If you are looking for a solution right away, you cannot afford to waste years on building software especially in a competitive world where time is equivalent to money. In that case, it may be best to find something that’s already on the market with close enough functionality to meet your requirements.

Moreover, if the problem at hand is common to all and there are competitors who are using third-party software to solve a similar kind of problem then choosing third-party software is a wiser option.

By partnering with a third-party vendor you can efficiently speeden up your automation journey.

The process of implementation is very simple and 100% of account setup, configuration, master creation, and training of the  transporters and internal users are done by the Logistics companies.

BUSINESS INTELLIGENCE/ MARKET INTELLIGENCE:

Detailed intelligence about the best business practices in logistics and the industry can be attained by using a third party service provider’s product which gives access to dashboard generated reports that offer a way to examine data to understand historic trends better.

An external vendor has a deep down understanding of the problems common to the industry and the same is reflected in the performance of the product whereas an in-house software is at a very nascent stage due to its limited reach and narrow vision of the company.

Business intelligence(BI) tools give a sense of the current state of the company and this can further be used for making informed decisions about the business.

Logistics Companies serve various customers from different industries across the country with our leaders having a combined experience of over 50 years in the logistics sector which has resulted in a much more mature product after a detailed SWOT analysis of the industry.

 

Before we discovered accounting softwares we all will agree that the job role of an accountant was manual and tedious bookkeeping whereas, today, it has moved to strategic roles like analyzing financial performance, assessing risks, building mergers, etc.

There are so many big and small companies in the market that use third party accounting softwares to record and report a firm’s financial transaction rather than building one in-house because it doesn’t directly contribute to the revenue and it diverts their attention from the primary goal of their business.

Likewise avoid wasting time, effort, money and the most important of all i.e your peace of mind on building software that already exists in the market.

External vendors bring a solution at a justifiable price to the table and help you cross the finishing line by giving you a leg up over your competitors.

 

Logistics Companies  take ownership of your KPIs and work closely beside you to deliver freight cost savings up to 9% and increase in employee productivity by 67%.

 

Make sure to evaluate relevant factors like cost, scalability, customizability, product & feature enhancements, problem statement and Market Intelligence to make an informed decision for your business.