Wednesday, May 1, 2013

How Magic Software Beats the DIY vs. Off-the-Shelf Dilemma for Logistics Service Providers

To remain competitive, Logistics Service Providers (LSPs) must have deep knowledge of both their industry and their unique place within it. They must know the complexities of the logistics sector and the custom business practices and processes that make them stand out with a defensible competitive advantage. Automating your proven approaches to everything from customs and tariffs to language, culture and partnerships can accelerate your ability to offer competitive services, business practices, rates and solutions for your customers.
The commonly heard debate between buy vs. build overlooks a third, better option: co-create. The problem with packaged off-the-shelf (OTS) and Software-as-aService (SaaS) applications is that they deliver bland generic capabilities that simply put you at par with last year’s thinking about how-to run a logistics company. Whatever capabilities you obtain in a packaged application are also available to all of your competitors. The problem with do-it-yourself (DIY) programming based on commonly available languages and tools such as Java and C#/.NET is that it puts all of the development burden on your IT department and this often results in project failure.

Magic Software takes an approach to custom development with LSPs that avoids these problems. First, we leverage an application platform on top of common technologies like .NET that will literally save years of development effort. Our uniquely responsive development environment allows us to deliver functionality at the speed of business. The peculiarities of software design are managed automatically by our underlying platform so that our programmers can focus on your logistics business logic. Second, because we manage a highly-trained and motivated team of developers, your IT department is not burdened with recruiting and retaining delicate and expensive human resources.

The primary focus of an LSP business is on the global shipment of goods and even more importantly on customer satisfaction and loyalty. Magic Software is in turn focused on the business of delivering quality software tailored to your business and on your satisfaction and loyalty.  For this reason, Magic Software overcomes the dilemma of choosing between DIY and OTS by doing the work in collaboration with you so that you remain focused on what you do best: logistics.

Magic Software maintains a team of highly-trained consultants, project managers, and developers that can be deployed immediately on development of your applications. We take the hassle out of managing a team of developers and we help you avoid the paralysis that comes with being handcuffed to an OTS package vendor. OTS vendors in the logistics industry are notorious for resisting changes in their packaged applications because it would have ripple-effects across all of their customers. They can’t provide you just what you want precisely because other companies take a different approach. The harder you push for feature requests that provide you with unique competitive advantage, the more likely you are to run into resistance and be presented with highly inflated feature request costs.  And if you do succeed in obtaining the feature you want, you run the almost certain risk that the OTS vendor will rollout this feature to your competitors. You’ve been placed in the untenable position of financing innovation for your competitors!

OTS vendors will try to sell you on the idea that their packaged applications deliver superior business practices that are ahead of what can be created for you. But the reality is packaged applications take the least-common-denominator approach. There is nothing special or uniquely competitive in their approach because it must be designed to please the average company. We all know that in the logistics industry, average companies fail.

Because Magic Software works with a wide variety of customers in the logistics industry from global brands like UPS and DHL to small and midsize 3PLs, we know the industry and can provide experienced consulting to help you brainstorm and design best practice approaches and more importantly approaches that deliver truly innovative value.

Due to our flexible application platform and our experience designing software, we take a software architecture approach that maximizes reusability and flexibility. This requires experienced logistics development teams with an understanding of service-oriented development of applications that deliver just the right level of business process granularity to maximize repeatability and flexibility.  And because our integration platform allows for loosely-coupled approaches to integration, there is little or no coding required to leverage pre-existing systems and business practices.

OTS vendors also take a honey-trap approach to costs by hiding their lifetime total cost of ownership in monthly or annual fee structures. Careful TCO comparisons between custom development of your perfect, “dream applications” by Magic Software and packaged OTS applications that deliver normal average value make it clear that the TCO analysis is heavily in Magic’s favor.

It is true that software development has risks. These risks are overcome by outsourcing the development of your application. You can outsource the development of your application to an OTS/SaaS vendor and get the same average system as everyone else or you can outsource it to Magic Software and get a custom-designed superior solution that is easier to maintain and faster to adapt to changes in the market. The up-front cost is more than justified by the long-term benefit and up-front costs can be financed as needed.

Flexibility and responsiveness are vital to remaining in compliance. The regulatory environment of the logistics industry changes frequently and being held-hostage by the feature request process of an OTS/SaaS vendor can literally bring you to a halt in the face of new regulations in local markets. Magic Software’s long track record of helping literally hundreds of companies adjust their systems on-time for such imposing regulatory schemes as Nota Fiscal Eletronica (NFE) in Brazil is only one example of how Magic Software is more responsive than OTS/SaaS solutions to regulatory requirements, especially in new and lucrative emerging global markets for logistics.

OTS/SaaS vendors expect your business to remain in place until they get around to making changes based on an arbitrated average of user requests. This can kill your business and expose you to massive risk. Working with Magic Software, you get the features and compliance solutions you need when you want them.

So the next time a vendor approaches you with the suggestion to purchase their SaaS solution or packaged application, ask yourself ‘do I want to be average?’ Can you afford to be behind the curve and slow to respond to changing global business requirements, can you give control of your most vital assets, your ability to automate the delivery of logistics services to a company that is offering that same average value to all of your competitors in their next phone call?

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