Logistics Technology ROI Depends on Behavior Change

May 27, 2021

5 min read

RESOURCES // BLOG

Your organization can realize benefit from your Transportation Management System (TMS) on the first booked shipment. However, achieving broader, ongoing return on your logistics technology investment requires simple, but critical steps to support behavioral changes within your business.
Leaders seeking ROI on investments in logistics technology must manage behavior changes across their organizational hierarchy.

The best logistics technology offers you the ability to standardize and automate business processes, optimize transportation procurement and improve communications across your network.

Accessing those outcomes is likely to require some level of change, and we all know change is rarely easy. Whether we are talking about a new flavor of coffee, a simple shift in routine or a new technology tool, humans are naturally resistant to “different.”

With the right approach to managing a change into a new technology environment, you can minimize the impact on your people and your partners. At the same time, you can maximize the ability of your TMS to implement your business goals, manage those goals, and enjoy the results that drive ROI across your business.

Let’s highlight aspects of our proven process that helps business executives manage change across key stakeholders in a TMS implementation: the leadership, operational management – and your business partners.

Start at the Top, Drive Technology Adoption

Top-down sponsorship is big in any project. When it comes to implementing new transportation management technology, it is even more important. Leadership must articulate and communicate an ROI message that conveys how logistics technology empowers the organization to achieve its business goals.

The work begins when you start exploring the right TMS for your business. Involve the team members who will use the tool day-to-day. These are the people doing the work, help them understand the benefits – a “why” behind the change that is relevant to them.

It gives you more control to help automate repeatable processes, and, in doing so, it gives your team back additional time to be more strategic in their activities.

The why for the organization: you are able to control your business strategy, define your strategy in business rules and put those rules in a system that allows you to execute based on those rules.

Once you communicate the “why,” seek the input for your team.

Your logistics users know the challenges they encounter regularly, and they know the capabilities that will make their jobs easier. Seek their feedback. This creates a sense of ownership in a tool you need them to adopt – instead of discord around a burden mandated for use.

Utilization is paramount. So, too, is standardization, which is a significant benefit of a TMS. Does every user at every location accomplish the same tasks with the same steps? If not, there may be a level of SOP you can capture and implement throughout the design of your operational rules utilized within your TMS.

Then, set expectations that the program will be monitored and measured, including successes and failures. Keep the line of communications open. Encourage users to voice their challenges and concerns. As you refine the technology based on input, you foster greater openness to change. That goes a long way toward making sure your system is easy to use, while you drive compliance in support of the “why.”

Along with compliance measurement comes downstream reporting that is critical to your executive communications with leadership stakeholders. Often when these leadership layers back a logistics technology investment, they do so expecting specific, quantitative return.

Level-set expectations early: ROI is coming, but not until information moving through the TMS arrives in reporting. This is what illustrates savings and transportation performance.

Least cost summary and other downstream reporting coming through your TMS helps measure compliance to routing rules set in place.]

Understand and Manage Technology Expectations

The tactical team is changing their work processes – from the old way to the new way – but functionally, not a lot should change for them. Built correctly around the right business processes, a TMS creates an immediate benefit for these users. Quick results ease a lot of change pain.

The work creates a different challenge for your operational managers. When theyenact the change they will need to have all those conversations about the “why,” earning adoption and compliance. The most challenging aspect is only having a partial adoption rate across your cross-functional user base.

If portions of your team do not adopt the tool, there is a risk for them to vocalize that to executive sponsorship. That is a big reason the users at this level must feel like they have a role in implementing the application. Creating a positive fact-based feedback loop to leadership based on the success of the program will be critical.

At the same time, your operational team must set expectations and bridge the gap to leadership by communicating downstream without creating pushback.

Operational leaders also must maintain alignment between tactical activities and strategic goals, where results are realized more slowly. While the first load booked in a TMS saves time for the tactical user, as I mentioned above, gathering information and building a data case for cost savings and efficiency gains is a longer process.

Just as a level-set for ROI timelines is important with leadership stakeholders, maintain a measure of patience with operational managers tasked with justifying the TMS. Once the best business rules are captured and applied into your organization, your technology platform will provide operational managers with reporting they need to demonstrate the value of the logistics technology to you.

Logistics of External Change: Carriers and Vendors

Be prepared to manage change with carriers and suppliers.

Your current transportation providers may raise red flags when a new party enters the conversation, especially if you enter a relationship with a technology partner. Naturally, they want to keep your business, and they may cite artificial concerns about lost relationships or diminished service.  

The reality is, using a TMS means you execute your carrier routing dynamically based on the best cost and service. These terms dictate the relationships your business should maintain.

Meanwhile, your suppliers and other vendors will need to start providing information into the system and give you a new layer of visibility. This introduces change for your partners and their daily process. Some are resistant. Some are not.

For both your carriers and your vendors, communication is important. It often requires a new process to convey expectations, including additional standardization, to all your partners.

Your vendors may need to sign in to the system to report receipt or shipment, using all the correct reference numbers. Do you communicate these new needs in your purchase order, through the TMS or a direct letter?

Your carriers may be required to input freight movement updates manually. If they do not, they will be accountable. How does that communication occur, and who manages it? While you want to limit the amount of effort required for external users, someone still has to own the compliance management.

Along with these conversations comes the compliance monitoring piece. Any TMS inputs require a level of measurement and compliance that will drive adoption – whether it is internally, or with your carriers and vendors. To maximize the value of TMS in your business, you not only need compliance within your four walls, but also with your carriers and vendors.

Minimize the Impact, Optimize the Logistics Technology

Logistics technology can deliver benefits to your business. Combining that technology with change management support from an expert partner helps you get to those benefits faster and easier.

We have a proven process that includes different levels of stakeholders throughout the implementation. We not only capture your business rules and initiate improvement where appropriate, but also we allow your teams to be part of the overall deployment of the TMS.

We work with you to identify the “why,” help you communicate that across your organization, and implement the compliance tools required to insure adoption. Validate your business case for TMS with customized reporting that combines information from your TMS with our independent freight audit and payment solutions to paint a clear picture of performance.

We also work with your supply chain partners to make sure that they are supporting your initiatives and your success. For your carrier partners, that means protecting the relationships that provide best cost/service. If you need additional providers, we foster those relationships, coordinate meet-and-greets, and make sure expectations are outlined clearly before the first load moves. Importantly, our executive relationship with transportation providers across North America provides a secondary point of escalation that produces faster results than a terminal manager or regional sales rep.

You face a disadvantage if you have a TMS, but lack relationships with your carrier base or have an audit function to validate the compliance of your contracted pricing and routing rules. Because Transportation Insight is able to provide the additional service offerings, and we are involved in supporting the success of your business, we can help shape and affect change management in all the areas related to the technology. And since we have worked across a multitude of customers and industries, we know the best practices that work in many domains – including yours.

Deploying logistics technology into your business does not have to be a huge undertaking. We can help you ease the change by fostering relationships at the foundation of your success. Contact us today to put the power of partnership behind the behavior changes that give you the most return from your TMS solution.

Transportation Insight’s logistics technology offering is backed by experts who help your organization implement best practices, manage behavioral change and give you time to focus on other priorities.

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