How To Reduce Your Technology Costs
by David Letourneau, on Dec 30, 2019
The freight transportation industry is slowly but steadily adopting digital technologies that usher in better efficiency levels, improve on processes, and increase profitability.
Traditional technology systems (hosted on-premise) are purchased and installed on servers you buy and maintain. They typically involve serious upfront investments for the technology, servers, and salary for an IT person to perform regular maintenance, and security of your data. That's to get started with today's version—upgrades are an additional cost. Most companies can't afford to upgrade every time a newer version becomes available, that's why they save them up until it is critical.
Cloud-based technology (also known as Saas) keeps your business running with the latest advances without interruption or additional costs. Below are the pros and cons of turning to cloud technology.
Benefits of Cloud-Based Technology
Cloud technology is quickly becoming the solution for many of the issues troubling the freight industry, if you’re a logistics provider or 3PL, it could be yours too. This technology can make your business accessible from anywhere. Flexibility is one of the benefits to gain from the cloud based technology. Though there are extensive list of benefits of cloud, our attention here is the most effective cost reduction.
With the cloud, your employees can access company ﬁles from any point of the globe (with wiﬁ of course), at any time and from any device. Cloud solutions also allow you to have full control over who can see your ﬁles, which means it helps you keep your resources safe.
Shipping volume is basically the best way of determining risks and saving money. Cloud management allows you to adapt to demand ﬂuctuations in volume while alleviating risks. You’ll have real-time, ﬂexible control over your shipments.
Many Cloud solutions utilize API integrations making it much easier to connect with your other systems than traditional systems. Cloud service providers often develop and maintain "out -of-the-box" integrations with other common systems to provide customers with seamless connections between systems to enhance productivity and ease of use.
Costs of Traditional (Hosted) vs Cloud (SaaS)
With cloud architecture, you only pay for what you use and how much you use on the platform—often all expenses are covered by a subscription fee or per transaction service fee. In addition, IT resource needs are supplied by the software company. This means that there is no need to hire and train in house IT staff or pay for expensive upgrades, which cut into your costs.
But the coin has two sides and so has cloud-based system. While everything mentioned above is true for small and mid-size companies, cloud-based systems may actually cost more for companies with large freight volumes ($100M+) than traditional systems with a ﬁxed upfront cost because of the "pay-for-what-you-use" structure of most cloud systems. That said, some are subscription based, so don't dismiss a cloud service without checking.
But be warned, traditional systems include hidden-fees such as maintenance fees, hardware costs, upgrade/update fees, and labor costs for IT staff to implement and maintain the system. Cloud systems give you peace of mind by maintaining everything for you and often natively integrate with other cloud systems giving you easier access to other productivity and revenue boosting technologies.
There are technical constraints that need to be mitigated, moving to the Cloud requires a well-planned strategy. If you know the cloud service you wish to use, work with them as they can often make the transition much easier. One thing is for certain, the Cloud is here to stay.
Not all Cloud systems are meant to only be replacement systems. Carggo, for instance, can be used either to replace older technology or as an add-on to supercharge your existing systems and increase your team's productivity.
Get started today with a 15 minute intro to learn how Carggo can help you maximize your team's productivity.