Digitalization has been a major trend in various fields. SaaS and cloud-based solutions have proven themselves to be an excellent option for most businesses. However, some companies still prefer on-premise TMS software.
This guide breaks down the pros and cons of cloud, on-premise, and hybrid TMS platforms. Hopefully, this will help you choose the right solution based on your business needs.
Affordable pricing and various cloud-based functionalities are just some of the benefits that make automated transportation management systems a preferred option for most businesses. They offer excellent agility, which is an important feature for modern supply chains. Lower technical requirements make cloud TMS easier to scale.
Unlike on-premise TMS software, SaaS transportation management solutions allow businesses to scale transportation operations without costly IT investments. Lots of businesses benefit from the flexibility offered by cloud TMS solutions. They are suitable for both small companies and already established businesses with large shipment volumes.
Probably the biggest benefit of SaaS TMS solutions is the lower implementation cost compared to on-premise software. Cloud TMS reduces costs by eliminating server maintenance and IT overhead.
Furthermore, additional features and tools are regularly introduced by developers of cloud-based solutions with minimal or no additional costs for their customers. The predictable subscription-based pricing model makes budgeting easier and transparent. With no need for large upfront investments and specialized staff, cloud TMS software is a great option for most companies.
Compared to on-premise installations, implementing a cloud TMS system is much faster. Companies can start using their TMS software in a matter of weeks. That’s because SaaS solutions don’t require the installation or maintenance of physical hardware. Instead, a cloud-based TMS needs to be initially set up. The system automatically updates and improves itself.
Off-the-shelf TMS platforms differ from custom-built, on-premise systems, but both come with their own pros and cons. While off-the-shelf solutions offer faster deployment and lower upfront costs, some companies still choose on-premise setups for deeper customization and full control over their environment. In cases where highly tailored workflows or strict internal requirements are necessary, a self-hosted TMS may be the more suitable option.
As we mentioned, the full control and customization that come with on-premise TMS are a key benefit. This allows businesses to choose which operational features and modules their software has.
Furthermore, the company is fully responsible for the security settings and the IT hardware. This makes hosted TMS solutions a better option for teams with strict data governance or compliance requirements. On-premise TMS allows implementing industry-specific tools without relying on a SaaS provider.
The 21st century has been marked by the technology sector. As such, most businesses in logistics have some type of legacy software, like an existing ERP, WMS, or other custom solutions. That’s why some companies prefer to integrate a self-hosted TMS offered by a developer they’ve already worked with in the past. Most SaaS TMS solutions offer a seamless data exchange and support integration with other solutions.
Hybrid TMS combines cloud and self-hosted features. For example, certain components of the system, such as historical data, might be self-hosted for compliance reasons. Other modules can be cloud-hosted and connected with remote access.
Thanks to hybrid TMS variations, organizations can modernize at their own pace without abandoning their existing systems. A company that already has a self-hosted transportation management system can integrate certain features of SaaS TMS. This allows them to gradually migrate to a cloud-based solution or benefit from additional features and modules offered by SaaS TMS without costly investments.
A hybrid TMS enables businesses to optimize operations by distributing workflows across cloud and on-premise environments. For example, routing and real-time visibility tools may be cloud-based while sensitive data is hosted on the company’s servers. The flexible architecture of hybrid TMS solutions allows businesses to manage risk and gradually transition and scale their operations.
If you’re still curious about cloud TMS vs. an on-premise transportation management system, perhaps the following answers to common questions will help you.
Scalability, low operational costs, and fast deployment are the main benefits of a cloud-based TMS solution. They automatically update and eliminate costly IT investments. SaaS TMS solutions are the ideal TMS deployment option for most businesses.
A cloud-based transportation management system is a platform that’s hosted on remote servers. In comparison, a self-hosted TMS is hosted on physical servers owned and operated by the company. Cloud-based TMS systems usually have a subscription pricing model.
From our perspective, ShipperGuide is the best cloud TMS. Our solutions are considered a top choice for organizations seeking a modern and user-friendly transportation management SaaS.
See how ShipperGuide’s cloud TMS can cut costs, improve delivery times, and simplify your logistics—schedule a demo today.