How to Choose Between Hosted and Enterprise TMS Software

One of the most important choices you will make on any new Transportation Management System is this: should your new system be installed or hosted? Tom Heine, CEO of Aljex Software, offers these tips to help you make the right choice.  Excerpt from Inbound Logistics.

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 1Server vs. The Web. Enterprise software is installed on servers that you buy and maintain. The more recent – though hardly new – form is SaaS, short for Software as a Service. SaaS is software provided, maintained, and hosted by a vendor on that vendor’s servers and made available to you over the Internet.  End users see little or no difference between the two.  However, in other respects, enterprise and SaaS are very different.


2. In the Short-Term. SaaS is pay-as-you-go with no major investment up front. You pay for it like electricity, as you use it. Cost should always relate directly to business activity and thus to revenue. Enterprise software represents a serious upfront investment whether accounted for as an operating or a capital expenditure.


3. For the Long-Term. SaaS costs less for the long haul as well. Enterprise software requires someone to be on top of anti-virus and security measures at the very least. It may even require a full-time IT person. SaaS has no such requirements. And with enterprise software, you only get today’s version. You will pay for tomorrow’s in upgrades as time goes on.


4. Think Hardware. To run enterprise software you must buy and maintain expensive server hardware that should be replaced every three years. For SaaS, you only need local computers for your people to access the Internet.


5. Upgrades & Tweaks. An SaaS vendor can upgrade the software in small increments applied when they’re proven and ready to go. Using the software day-to-day you might not notice an upgrade being deployed. Enterprise software changes are saved up and issued, say, once a year in a major upgrade. A substantial, multipart upgrade can be disruptive as it is installed and it will cost you money as well. The incremental, real-time upgrades to SaaS, on the other hand, rarely cause downtime and are usually free.


6. Backup & Maintenance. SaaS data is backed up professionally by your vendor as part of the service. SaaS backup is more redundant and secure than anything most companies set up for themselves. Maintenance is not an issue at all since the software resides on the vendor’s servers. Maintaining, tweaking, and upgrading are the SaaS vendor’s stock in trade.


7. Support & Training. SaaS is, naturally, provided by Internet-savvy companies. They offer scheduled webinars as well as tutorials on demand over the Internet, which is a helpful support tool. That may not be the case with enterprise software providers, especially those who rely on traditional, location-specific training sessions. But if you need on-site training, most SaaS providers can do that too.


8. Consider Security. Even if you run enterprise software locally, your servers are likely connected to the Internet. They are at least as vulnerable as any hosted solution — and probably much more so. SaaS professionals are in the business of data security and uptime every bit as much as they are in the business of providing operational software. As a result, your data is safer and uptime greater with SaaS than is at all likely with enterprise software.


9. Getting Started. Enterprise software often entails a disruptive, on-site installation and shakedown period. With SaaS, on the other hand, there is no on-site installation. SaaS is already up and running so you’re ready to work in a fraction of the time — days instead of weeks.


10. Connect & Collaborate. By its nature, web-based software offers more opportunities to collaborate and expand. For example, it’s easy to establish a new office.  The people in your home office will be working with the same information as those in your new office wherever it is.  With enterprise software, it can get complicated.