Executive Briefings

Should 3PLs Outsource IT to a Third-Party Software Provider? Here Are Some Factors to Consider

The changing dynamics of global business are causing more logistics providers to consider outsourcing their IT capabilities to a third-party software provider. But any such decision must be preceded by an in-depth evaluation of in-house IT resources, as well as customer requirements. That is the view of CargoWise edi, a vendor of software for managing international logistics and supply chains. New technologies and IT initiatives are providing forwarders and other logistics providers with a "vast array" of software options, says Melinda Elmowy, vice president of global marketing with Cargowise. "But before making a decision on whether to outsource their IT solutions, logistics providers should evaluate their own core competencies, internal capacity and commitment to minimizing developmental risk while maximizing business success," she says. A company's cultural alignment, including its ability to communicate among departments about IT matters, will be the deciding factor in whether to keep supply-chain management systems in-house, or hand them over to a third party, Elmowy says. In addition, a provider should determine its commitment to necessary capital expenditures, including the cost of employee training, regular technology updates and software maintenance. "If your company culture does not include IT logistics as a driving force in your overall operations," Cargowise says, "you probably cannot leverage these expenses in-house."
http://www.cargowise.com

The changing dynamics of global business are causing more logistics providers to consider outsourcing their IT capabilities to a third-party software provider. But any such decision must be preceded by an in-depth evaluation of in-house IT resources, as well as customer requirements. That is the view of CargoWise edi, a vendor of software for managing international logistics and supply chains. New technologies and IT initiatives are providing forwarders and other logistics providers with a "vast array" of software options, says Melinda Elmowy, vice president of global marketing with Cargowise. "But before making a decision on whether to outsource their IT solutions, logistics providers should evaluate their own core competencies, internal capacity and commitment to minimizing developmental risk while maximizing business success," she says. A company's cultural alignment, including its ability to communicate among departments about IT matters, will be the deciding factor in whether to keep supply-chain management systems in-house, or hand them over to a third party, Elmowy says. In addition, a provider should determine its commitment to necessary capital expenditures, including the cost of employee training, regular technology updates and software maintenance. "If your company culture does not include IT logistics as a driving force in your overall operations," Cargowise says, "you probably cannot leverage these expenses in-house."
http://www.cargowise.com