Efficient logistics is crucial for today’s entrepreneurs looking to compete with big businesses or start new ones. It’s especially vital for eCommerce companies to deliver goods to distant locations. However, even a small issue in the logistics system can cause problems like damaged business relationships and canceled orders. As a result, many companies have begun using logistics software.

What is Logistics Software?

In the era of digitization, logistics software automates several key logistic processes and reduces human error. This way it ensures uninterrupted productivity to business owners. Be it inventory, order processing, invoicing, or general ledger, modern logistics software is developed to support all these operations. Connected with enormous data storage in the form of cloud computing or private hosting servers, the sheer amount of data that logistic software manages cannot be processed manually.

1. Real-Time Supply Chain Visibility (SCV): Modern supply chain software can reflect real-time supply chain dynamics. For example, they can display weather analysis ahead of time, select the best route for transportation and give traffic updates. Along with this, logistic software is already popular for providing inventory updates in real-time.

2. Omni-Channel Delivery: Businesses find omnichannel delivery to be more beneficial to customers as it improves the overall customer experience. Thus, to match these requirements, omnichannel delivery management is also integrated into various logistic software. These omni-channels include:

  • Walk-in Store to customer
  • Warehouse to customer
  • Supplier to customer
  • Distribution store to customer
  • Back from customer to the company

3. Virtual Assistants: The entrance of machine learning and artificial intelligence models in the supply chain industry improved the user experience for both customers and business owners. For example, store managers can ask a chatbot for the location of a particular product. The same goes for the customers who can inquire about warehouse stock availability without making a phone call.

4. Data Analytics: Logistics software is made to support Big Data and process large-scale data analysis. The reports prepared by this software assist businesses in streamlining the delivery processes, such as reducing warehouse to delivery hub timings and store products more efficiently.

5. Third-Party Integrations (TPIs): Both custom and SaaS development methods offer various third-party integrations to business owners. These integrations are small software independent of any industry and can be used to increase the functionality and features of large-scale software. For example, Mail Chimp, which is an email automation integration.

Methods for Logistics Software Development

The two popular ways you can develop logistics software for your business are custom and SaaS development. You can read about them in detail and check their pros and cons below:

1. Custom Logistic Software

Custom logistic software is tailored as per your company’s requirements, so it is more efficient at resolving your logistic problems. As the entire custom development process begins from scratch, this route is lengthy but worth spending your money on. On the other hand, there is ready-made software available in the market that IT vendors can customize as per your business needs and provide the same benefits. With custom logistics software, business owners also get the flexibility to integrate any third-party software into the end product.

Pros of Custom Logistics Software

  • Tailored as per your business needs
  • You get the option to select software development technology
  • You exclusively own the software
  • Obtain a lifetime usage license for the software
  • Flexibility to add any third-party integrations
  • Are not subject to any software provider’s processing fee
  • Receive complete documentation for the onboarding process

Cons of Custom Logistics Software

  • Takes time to develop
  • Community support for custom software is not available
  • It takes time to switch to another software (But is usually not required)

2. SaaS Logistics Software

SaaS is an acronym for Software as a Service, meaning it is software that is provided to business owners and transport companies monthly (like a regular service) and is charged on a recurrent basis. Some SaaS solutions providers also offer multi-tier software packages with higher tiers having more features than the lower ones. SaaS logistics solutions are developed keeping the general requirements of businesses in mind, and thus they cannot help you with your unique business problems.

Pros

  • Quick to set up as they are pre-developed
  • Community support is available
  • Have all essential features required to support logistics operations
  • Available at small recurrent costs
  • Are tested and tried by hundreds or thousands of businesses
  • Software updates are frequently launched

Cons

  • The business owner never owns the software
  • Only select TPIs can be integrated
  • Not cost-effective in the long run due to recurrent fee
  • You may be subjected to a payment processing fee

Should I opt for SaaS or Custom Solutions?

Many entrepreneurs find it difficult to make a clear-cut decision between these two. While SaaS appears to be more economically advantaged, custom development promises to solve all unique business problems. You can resolve this dilemma by looking at three factors:

1. Price Factor: Independent of your budget, the price factor includes an estimate for the value you will be getting for your investment in both SaaS and custom software.

Custom software without a doubt provides more value as it is software specifically designed to meet your business requirements. It is reliable for businesses of all sizes. On the other hand, SaaS logistic software is more suitable for small size businesses that are yet to expand their customer base. As SaaS comes with recurring payments, businesses often end up paying more than the software’s worth in the long run.

Moreover, moving on to custom software at a later stage means reinvestment with overhead onboarding costs.

2. Time Factor: For entrepreneurs facing a lot of management troubles and requiring an immediate solution to salvage their crashing business, SaaS is their only option.

Custom logistic development does come up with fast development options, such as readymade solution customization and agile development methodologies. However, it still cannot match the deployment speed of SaaS solutions that only require businesses to sign up and set up the software on their server.

3. Quality Factor: In the third factor, both SaaS and custom logistic software come with varying quality levels. This means that if you make a bad selection in a SaaS provider or custom software development firm, you can end up with poor quality software that may give a lot of bugs and errors.

Moreover, both SaaS and Custom logistic software have their pros in terms of quality. For example, while you cannot control the quality of SaaS software, you can easily switch from one SaaS solution to another. On the other hand, switching from custom logistic software is difficult but you get full quality control over the logistics software.

How to Find a Custom Software Development Company?

The list of SaaS logistics solutions is easily available on the internet. However, the businesses opting for custom development do require a proper set of guidelines to find a company they can rely on. We have divided these guidelines into our ‘To Do’ and ‘Not to Do’ list below:

To Do: Search on Critic Websites

Professional critic websites are already evaluating software development companies throughout the year. Plus, they are also aware of the criteria to accurately estimate the performance value and work quality of an IT company. Some websites like softwareworld, Clutch, and Good firms also distribute yearly awards to top-performing companies.

Not to Do: Search on Freelancing Websites

Freelancing websites like UpWork and Freelancers are populated by developers whose work is difficult to evaluate. While the number of their completed projects does highlight their experience, it is not a measure of quality and performance. In addition, there are also numerous fraudulent companies operating on UpWork who outsource projects at cheaper rates to inexperienced developers.

To Do: Discuss your Requirements with the Sales Team

To ensure how good a software development company will be for your logistics project, discuss your requirements with its sales team. Not only the team can guide you towards the development process, but also explain how it aims to develop the software. You can also ask for a quotation and negotiate.

Not to Do: Select the Software Development Impatiently

After discussing your project requirements with one company, it is wise to move on to the next custom software development company and share your requirements. This way, you can get multiple quotations and delivery timelines. Next, you can compare two companies against each other and select the most reliable one.

To Do: View Portfolios and Case Studies Thoroughly

Maybe a company has worked for similar projects before and those projects shared the same requirements as yours. To know, you can ask the sales team for a case study and portfolio. They are a very reliable way to evaluate a company’s work quality and usefulness.

Not to Do: Avoid Customer Support and Post-Deployment Support

Various IT companies offer free technical support for a limited period of time. Other companies don’t even respond in case of any issues. Make sure you select the one that provides efficient omnichannel technical support to keep your business running smoothly.

Summing Up

Improved logistics means better warehousing, quicker transport, accurate inventory tracking, and much more. To benefit from these streamlined operations, businesses can opt for both SaaS or Custom logistics software. As long as this software perform their job and assist businesses in resolving their logistics problems, they are highly recommended to both online and offline businesses. Choosing between SaaS and custom solutions is up to the business owner and we hope the aforementioned information helps you.

FAQs:

1. Which is cheaper to use: SaaS or Custom Logistics Software?

As SaaS comes with recurrent costs, over time, it can be more expensive than custom software. For example, let’s suppose a custom logistic software costs you $3000 and a SaaS solution costs $80 per month. You own the custom software but not the SaaS solution. In a period of 3 years, you will end up paying more than $3000, i.e. the cost of custom software. As more time passes by, let’s say 5 years, you would have paid $4,800. This amount will keep on increasing and in the end, you will end up paying more than the solution’s worth. Also note that all these calculations are excluding any processing fees, technical support, or TPI costs.

2. How to do Feature Selection for Logistics Software?

Be it custom software or a SaaS solution, as the business owner, you should be aware of the features you are looking for in your logistics software. This feature selection can take time. SaaS solutions have a fixed list of features, it is possible that you may not find all the features that you require in a single SaaS software. On the other hand, you can get any feature you want in custom software. You can select these features after reading guides on the internet or doing a comparative analysis of different SaaS software. Lastly, your software development company can also assist you in feature selection.

3. What is the Processing Fee in SaaS Software?

The processing fee refers to the payment processing fee in case any funds transfer is done from the software. This processing fee is charged per transaction and is to be paid along with the monthly recurring fee. For example, if the total monthly transactions are done on the software amount to $1000, the processing fee is 5% and the monthly fee is $80, the total amount you pay for this particular month is $80 (monthly charges) + $50 (processing fee) = $130.

4. What is the Fastest Approach to Custom Logistics Software Development?

If you want early hands-on software, the most recommended software development approach is agile development. In this approach, the software is developed in multiple sprints and each sprint is a small development cycle on its own. The first sprint only includes the basic features required to make the software feasible and is launched early. Thus, you can start using the software after the completion of the first sprint, whereas advanced features can be added later on.