TMS adoption is on the rise and rightly so. Limited capacity is likely to hike freight rates by as much as 4.9% this year. Shippers can not only offset these charges, but further improve their productivity by using Transportation Management Solutions (TMS). TMS make it possible for shippers to streamline their supply chains, and gain from the optimization of time and cost. The savings can be as high as 8%, as reported by the ARC Advisory Group.

So, if you, like many other enterprises, is wondering which solution to go for, let’s begin with analyzing the Gartner’s 2018 Magic Quadrant for TMS.

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Oracle Transport Management Solution (OTM) and SAP Transport Management Solution (SAP TMS) both are tagged ‘Leaders’. However, Oracle is clearly leading the pack because of the depth and scale of its solution. Having added over 100 customers in 2017 alone, it is also one of the fastest growing TMSs. In the past two years it served 22 industries sealing its appeal across verticals.

At the moment, Oracle is focused on growing its cloud offering for SMB customers. While solutions for large enterprises can be described as priced at a premium, the ones designed for SMB customers are competitively priced.

The adoption of SAP TM is being driven by its ERP customer base. As per the Gartner Magic Quadrant report for 2016, a majority of SAP TM customer references identified ERP and TM integration as one of the key advantages and reasons for selecting SAP TM. However, the report states that according to some customers, this integration wasn’t as simple as they expected. They also cited lack of integration with trading partners as problematic.

Being a newer solution, it is natural for SAP TM to lack the maturity of an older solution such as Oracle. However, SAP is known to be focused on R&D and is working to close all gaps. So, to understand which one would suit you better, ask yourself the following questions:

How do you categorize your organization’s transportation operations?

While historically, TMS was primarily used by level 4 and 5 shippers i.e for those needing advanced planning and globalization, the developments over the past few years, specifically in cloud technology, has made TMS appealing to even Level 2 and Level 3 players i.e. the ones focused on execution and expanding their footprint.

OTM was initially designed to serve level 4 and 5. But with the advances in cloud technology, it provides the same features at competitive cost to organizations needing level 2 & 3 TMS. SAP TMS is designed to cater to level 3 and 4, (and occasionally 5) while OTM can address the needs of organizations of all sizes.

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Which ERP do you use? Hold on. That doesn’t really matter.

If your organization is already using SAP ERP, opting for SAP TMS would seem to be the natural choice. The 2018 Gartner’s report states: “With SAP TM now available for S/4HANA, this will further strengthen companies’ strategies to create a uniform platform across the SCM landscape and will be a major reason for choosing SAP TM.” However it not necessarily be that way. You need to figure out whether this works for your organization or not.

A 2015 whitepaper by Oracle on the subject of coexisting with SAP explains: “The bottom-line is no software vendor has the best solution to every business problem. And companies are finding that the value delivered by the best solution is far greater than any purported costs to integrate or manage those applications.”

Do you want to benefit from cloud technology?

If yes, you are not alone. “We’re seeing a lot of companies moving from older, on-premise platforms to either multi-tenant or Cloud-based solutions,” says Bart De Muynck, Gartner’s research director. He noted that the rush to adopt TMS is driven largely by the desire to make use of new features. Small and medium businesses, however, are joining the bandwagon because of the lowered cost structure. And this trend can mainly be attributed to the easy availability of cloud technology.

Bridget McCrea, Editor at Logistics Management states: “As one of the first supply chain applications to make its way into the Cloud, TMS continues to shift from being an on-premise/installed solution to a web-based platform where shippers, business partners, carriers, third-party logistics (3PL) providers, and even customers can access pertinent information via the web on a 24/7/365 basis in real-time.” She further quotes Amit Sethi, senior manager of logistics and supply chain at Capgemini who says: “The Cloud just naturally lends itself toward TMS. After all, most TMS-related data is outside of the four walls of the company anyway, so why constrain your system to just being inside the four walls?”

That’s a valid observation. And in this aspect, Oracle is the clear winner. Having foreseen the appeal of cloud technology, it started innovating early on. As of today, the OTM Cloud can address both – the most complex transportation requirements of large and sophisticated shippers, as well as cater to simpler demands from smaller shippers. That is why OTM is also competitively priced while SAP TM has a much higher Total Cost of Ownership (TCO).

How important is the community to you?

Oracle’s ecosystem is vast. Its customer base ranks first in terms of global spread and it has the biggest ecosystem of implementation partners. The OTM Cloud customer base is spread evenly across North America and other regions. As per the 2018 Gartner’s Magic Quadrant report, Oracle, “continues to build its ecosystem of third-party service providers, spanning thousands of carriers, multiple modes of transportation and multiple geographic regions as well as solution integrators.” If you were to choose OTM, this would mean that you would have a community to back you up through implementation, integration, training, and support.

Even SAP has a global presence and a large and expanding ecosystem of customers and partners (both technology and implementation). Furthermore, SAP’s ultimate goal is to create a network of networks. For this it partnered with Descartes to provide carrier connectivity through the Descartes’ Global Logistics Network. However, since it is a newer solution, the reach isn’t as vast as that of OTM.

Parting note: Getting the right third party implementation partner is key to success

Both OTM and SAP TM have their advantages and drawbacks. SAP TM lacks maturity and its cost might be prohibitive for some. Oracle still lacks capabilities such as brokerage and transportation modeling that larger customers, 3rd party logistic providers and shippers are increasingly demanding. The situation, interestingly, is the way it usually is for all solutions at all times: imperfect but operational.

That is why it is important for you to step back and see what works best for you. And the pragmatic way to go about it is to get an implementation partner. Third parties, because of the nature of their work, are exposed to companies with diverse businesses and varied needs, thereby requiring customized solutions. They develop a distilled view of the advantages that particular solutions offer, and can map them against the requirements of their clients. They don’t base their decisions on generic reports. They analyse your organization’s specific requirements and see which solution, or rather, which combination of solutions, would give you the desired business benefits at low or reasonable cost.

Therefore take your time, study your requirements really well, and don’t hesitate to take advice from a third party before investing in a TMS.

Looking for a Transportation Management Solution Partner?

Aptude is a transportation systems implementation and integration innovator with nearly 20 years of IT consulting experience. As a Microsoft and Oracle Certified Gold Partner, we have the experience to get your technical solution implemented properly.

Capabilities include:

  • Business Intelligence & Reporting
  • Big Data Solutions
  • Application Support
  • Mobile App Development
  • Oracle Transportation Management

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Keep Moving Forward with Aptude

Aptude is your own personal IT professional services firm. We provide our clients with first class resources in a continuous, cost-containment fashion.

Our support services will free up your senior IT staff from the overwhelming burden of day-to-day maintenance issues. Now they’ll have time to launch those new projects and applications you’ve been waiting for. Simply put, we can free up your resources and contain your costs. Let’s have a quick chat to discuss our exclusive services.