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The Bottom Line Effect Of Trucking Software


The Bottom Line Effect Of Trucking Software

  02:28:07 pm, Categories: efficiencies , Tags: bottom line, roi, tco

In the last six months we have discussed the following topics in our "Trucking Software" blog:

  • Managing Fuel
  • EDI
  • Driver Qualifications
  • Managing Deadhead Miles
  • Choosing Trucking Software
  • How Trucking Software can help your company

In these articles we have outlined the benefits of a trucking software solution. From increased productivity of employees and equipment to increased efficiency throughout your entire company.

We have also discussed enhanced communication capability with web portals, integration capabilities with mobile communication systems and other systems such as routing programs and warehouse management. We have also discussed the projection of your company's image to your customers and vendors. What they see on your checks and invoices affects their image of your company capabilities.

What we have not discussed is the ROI, or "Return on Investment" and TCO, "Total Cost of Ownership”. These are two sides of the same coin. It is not all that different from the consideration involved in the purchase of a truck or trailer for your fleet. The biggest difference is that you can see direct revenue and expense results from the addition to your fleet. With software, the revenue and cost results are more subtle, and if not studied, can be completely missed by attributing the results to other factors.

I always find it amazing how easily some companies can add trucks and trailers to their fleet with little or no anxiety. Spending $100,000 to $200,000 for equipment they may have for approximately five years. Yet when they approach the purchase of trucking software which will help manage all of their equipment, personnel, and finances for the lifetime of their company they balk at a one time investment of a few thousand dollars. Thankfully, there are many companies that realize the tools they invest in to manage their assets are as important as the assets themselves.

When evaluating ROI of trucking software there are several things to take into consideration:

Hard Savings - These are savings that have a direct impact; reduced overhead, reduction in errors such as billing errors or payroll, increased revenue directly attributable to system capabilities, integration, EDI, Website etc., and improved data resulting in better decisions.

Soft Savings - These are savings that are less tangible but still have a large impact, such as customer confidence in your ability to provide timely information, and professional documents. Processes that take less effort creating a less stressful work environment and peace of mind knowing that you have a system that will not hold your business back but rather provide you with solutions no matter what challenge comes next.

TCO or "Total Cost of Ownership" - When evaluating a trucking software package you will want to know how much the system is going to cost you each year. For instance maintenance and support contracts, license renewal, upgrade costs, system updates, and customizations.

Many systems utilize Windows servers which require costly license and upgrade fees, in addition to the trucking software program license and upgrade costs. You need to also watch out for companies that charge separately for system updates in addition to annual maintenance and support contracts. Also, be sure to have a realistic projection of your expected growth. If the system you are purchasing is not going to be able to support your company's projected size in two or three years you would be money ahead purchasing a system that may cost slightly more now but will be able to support your company's growth.

Transitioning systems in mature company's can be a painful and costly experience. Typically you lose visibility of your historical data, and your employees have to maintain their level of performance while learning a new system.

Trucking software encompasses the management of your entire company. It isn't just dispatching, or billing, or payroll, or maintenance, ideally it is a group of integrated programs specifically designed for the trucking industry. Good trucking software should be enterprise level, not your typical "off the shelf" home accounting package beefed up for business. Yet it must be easy to use and simple to follow so that your employees will be easily trained on it and enjoy using it.

In today's economy, we must carefully manage each dollar. However the cheapest solution is rarely the best solution. We must take into account the return on our investment and the total cost of ownership in order to be successful in the long term. While we may not have money to simply throw at problems, we do not have money to simply throw away either.

For a sustainable, long term, affordable, trucking software solution contact TruckMaster today. You will be glad you did for years to come.

Kurtis Brown
TruckMaster Solution Provider
TruckMaster Your Trucking Company

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