OPTIMISING TMS IMPLEMENTATION: BALANCING ONE-TIME COSTS WITH LONG-TERM VALUE

In the competitive landscape of supply chain management, controlling costs while extracting maximum value is a critical priority. For shippers investing in Transport Management Systems (TMS), achieving this balance requires a strategic focus on implementation costs—a one-time expense—and the long-term operational benefits the system can deliver.
Elmer Spruijt, Vice President of Global Sales at Descartes, provides a blueprint for navigating this pivotal process.
Understanding the Cost Dynamics
A TMS investment involves two primary cost categories: recurring costs tied to shipment volumes and implementation costs incurred during system setup. The latter, often ranging from €30,000 to €900,000 (£25,000 to £750,000), can be significant. However, these expenses must be assessed in the context of the system’s long-term value and return on investment (ROI).
To ensure optimal outcomes, shippers should begin by clearly defining the value they expect a TMS to deliver. This enables businesses to select the right solution, streamline implementation, and position the system for sustained success.
Key Drivers of Implementation Costs
Several factors influence TMS implementation costs. Careful evaluation of these elements can help shippers minimise expenditure while maximising the system’s potential.
1. Connectivity with Carriers and Forwarders
Automation is the cornerstone of an efficient TMS, particularly for high-volume shippers. This requires seamless integration with internal systems such as enterprise resource planning (ERP) tools, as well as external carriers and forwarders for booking, tracking, invoicing, and status updates.
Some TMS providers offer published APIs for carrier integration. However, carriers may charge shippers for establishing these connections. Opting for a TMS with an extensive pre-connected network can significantly reduce connectivity costs and ensure smoother operations.
2. Complexity of Business Rules
Advanced TMS solutions support diverse transportation scenarios, from multimodal logistics to regional variations. These capabilities often necessitate tailored configurations. In contrast, basic systems with rigid workflows may fail to accommodate specific operational needs, leading to inefficiencies and potential contract terminations.
Shippers should prioritise solutions that enable customisable business rules to automate tasks such as shipment consolidation, routing, and carrier selection. Expert guidance during implementation is essential, as it lays the foundation for long-term value.
3. Dependence on Third-Party Solutions
While modern TMS platforms promise end-to-end functionality, some rely on third-party solutions for capabilities like real-time visibility or parcel rate shopping. Integrating these additional tools adds complexity and costs, both during implementation and ongoing maintenance.
Selecting a TMS with comprehensive built-in features can mitigate these challenges, reducing both initial and future expenditures.
4. Expertise of the Project Team
The expertise of the implementation team is critical. Some ERP vendors delegate TMS implementation to external partners, potentially resulting in suboptimal configurations and extended timelines. In contrast, experienced teams bring best practices and industry insights, ensuring an efficient setup that maximises the TMS’s potential.

Strategies for Cost Optimisation
To control implementation costs and streamline the process, shippers can take proactive steps:
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Consolidate Carriers: Reducing the number of carriers or using carrier portals for smaller providers can limit integration expenses. Real-time visibility for these carriers can still be achieved through platforms like Descartes MacroPoint™.
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Minimise Vendor Involvement: Limiting the number of vendors simplifies project management and reduces the risk of unforeseen complications.
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Leverage Internal Resources: Active participation from internal stakeholders, including IT support and project managers, is crucial. Aligning key users on optimal processes helps minimise change requests and avoid costly delays.
The Importance of a Robust Planning Phase
A thorough analysis and design phase is vital to TMS implementation success. Shippers should invest time in crafting a detailed solution design document and conducting comprehensive acceptance testing. These steps reduce the likelihood of costly revisions and ensure a smoother implementation process.
By evaluating implementation costs through the lens of long-term value, shippers can make informed decisions that optimise their TMS investment. A focus on upfront planning, stakeholder alignment, and strategic cost control will not only limit one-time expenses but also establish a foundation for enduring operational efficiency and ROI.