Adopting the Cloud-First Approach to Delivery Logistics

A cloud has gathered over the last mile. It’s stirring up a storm over the delivery logistics landscape that promises to disrupt and turn the status quo in its favor.

The cloud in question is cloud-based delivery management software.

In the past, there was only one option. On-premise delivery management software (for example Paragon Routing) was a solution reserved for the deep pockets of the enterprise.

Now, it’s anyone’s, and everyone’s game. The smart money is on the Cloud.

Low upfront costs, fast deployment, high visibility, and even greater flexibility are some of the benefits of cloud-based logistics software. And experts across the distribution and delivery spectrum are embracing the Cloud.

For many of them, the cloud-first approach is a risk worth taking, especially since the only other option is often out of their reach from a cost and implementation perspective.

But it’s also a bold statement about things to come. As more and more companies move their operations on the cloud, the software will evolve with them.

Let's jump in.

What Is the Cloud-First Approach to Delivery Management?

When it comes to cloud-based delivery management software, the role of the Cloud is to make the software available to the users on-demand and provide the capacities to input and store data.

But without direct management of the system itself which is reserved for service providers.

According to Gartner, the leading experts and forecasters of technological innovation, the Cloud is also explained as:

“…a style of computing where scalable and elastic IT-enabled capabilities are provided as a service to external customers using Internet technologies…”

The cloud-first approach to delivery management refers to companies that use cloud-based infrastructure, platforms, or applications as their main tool to plan, manage, and operate their last-mile delivery logistics.

These organizations rely on Software as a Service (SaaS) providers to use their platforms as a service, instead of the former model of taking ownership of perpetual licenses attached to on-premise deployments.

However, that doesn’t mean that they don’t receive a quality platform. Companies that opt for a cloud solution usually end up with even better features and capabilities than those that rely on on-premise software.

Connecting to a centralized delivery management system in the Cloud leads to a plethora of benefits, many of which raise visibility, performance, and efficiency of their last-mile operations.

Not to mention, the solution is both easily scalable and is Operating Expense (Opex) vs. Capital Expense (Capex).

Payment models are often flexible with pay monthly options available and generally even more cost-effective pay-upfront options are offered also.

The longer the contract the lower the unit (monthly etc.) price is.

SaaS Is A More Cost-Effective Solution

Before the invention of cloud technology, last-mile delivery logistics solutions were on-premise. It was reserved almost exclusively for companies at the enterprise-level. Too expensive and unattainable for small or medium businesses.

Now, cloud-based logistics systems are available to all. At an often lower cost, and certainly, with much greater levels of flexibility (Opex vs.Capex).

Companies can attain digital delivery management capabilities regardless of their size or the size of their operations.

This is all thanks to the way payment works for this type of technology.

Unlike on-premise software that always requires full upfront payment, SaaS companies offer more flexible billing plans.

These often include monthly-paid subscriptions or paid-upfront subscriptions (at a discount). Most importantly, there are no capital costs.

This doesn’t mean the cost of a cloud-based logistics software is always less than an on-premise one.

The level of value gained, however, will likely be much higher with monthly subscription plans enabling easier entry and always-up-to-date features ensuring that the customer is always receiving great value for money.

With on-on premise, such upgrades are often chargeable and there are generally professional service fees attributable as well.

Expenditure is optimized, as well. Rather than paying for an entire software package and the unnecessary features you don’t want or need, providers of cloud-based software let you choose a plan that best suits your service.

A company can pick features or capabilities it needs the most and choose a plan based on those requirements.

It can also reject advanced features to lower the price or put off their purchase until it becomes an absolute necessity or the budget allows it.

Some SaaS companies go as far as to allow their users to effectively customize their solution and attach the price of add-ons to the total bill.

Choosing software based on the capabilities you need is a smarter investment than having to pay for everything.

It’s why companies, even at the enterprise level that can afford and manage on-premise solutions find the alternative much more appealing.

So, it isn’t hard to see why more and more companies are turning to cloud-based solutions.

SaaS Is a Secure Option

Even now, many experts cling to the notion that on-premise solutions are the more secure option when it comes to delivery logistics software.

This comes from the belief that companies that own and operate in-house servers can store and access data safely under their exclusive firewall protection.

On the other hand, the hype around cloud computing has led others to believe in myths about its capabilities.

One of them is that software operating on the cloud is more secure than similar on-premise digital logistics solutions.

The fact is that both sides are right and wrong at the same time. Software security is always a risk, be it on the cloud or on-premise.

In both cases, the biggest concerns are cyber attacks. But in the case of the public cloud at least, there have been very few recorded breaches in security caused by external factors.

The majority of security issues happen within the company and involve some type of user misconfiguration or mismanagement of the software.

Customer companies, alongside the delivery management cloud software provider, also have to assume responsibility for assessing the security capabilities of the software they choose, and train staff to operate it according to the directions of the provider.

If both parties share the burden of security, they will not only lower the risk of breaches but also maintain the quality of the delivery management system that brought both of them to the cloud in the first place.

SaaS Offers Better Scalability Through Agility and Flexibility

Apart from security, another concern with delivery software in the cloud was the loss of control.

But as cloud computing gradually evolved, many of those key initial concerns were addressed or eclipsed by the sheer power and appeal of its benefits.

That was the case when companies found out how easy it was to scale operations with the new system on the cloud.

Unlike on-premise solutions, cloud-based software doesn’t need to be installed.

It’s accessible via the relevant user account on every device and from every location, while all of the upgrades, patches, and add-ons are handled by the vendor and automatically updated across the system.

If there is anything that requires installation, it is usually easy to do and related to the deployment phase or desktop and mobile delivery apps that improve the UI and UX for the workforce.

All of the features are continuously functional and available. If a company wants to add a new feature or increase the capabilities of existing ones, the provider can simply unlock them for that account after the two parties reach an agreement.

Unlike the cloud, on-premise software is less flexible and too slow for agile scalability.

If, for example, a company that operates its service in three cities, it would need to purchase, equip, and deploy the system at all three locations.

Because all locations operate independently from one another, it’s much harder to coordinate operations between them. Not to mention access data and issue tasks.

The agility of the cloud is attractive to the mobile nature of last-mile delivery. It’s the ability to apply multi-client and multi-channel options from one central hub is the ideal solution for the fast tempo of the contemporary delivery landscape.

Apart from flexibility, a centralized network like that also improves real-time visibility through advanced connectivity across the grid.

Higher Connectivity Across the Entire Supply Chain

Advanced connectivity is another central feature of cloud-based systems.

Unlike traditional on-premise solutions that operate independently, software on the cloud is connected by the cloud via the Internet.

The entire network is connected through a single, centralized system. This allows organizations to plan resources when demand exceeds capacity, rather than being geographical constrained, and remain in communication with all the moving parts across the supply chain.

Since all the data also flows in and out from one hub, it’s easier to share and access relevant information about past, future, and ongoing operations.

This raises end-to-end visibility over the service to a real-time level and permits operation managers to act and react to changing situations as they happen.

But the connectivity of a cloud-first approach also makes it easier to adopt and deploy the system.

Because these systems operate on the Cloud, they can easily integrate with any other cloud-based solution, such as customer relationship management tools.

Not only that, but this higher level of connectivity will be useful during the next stage of the digital transformation of the last-mile and lead to even more cloud-first adoption.

What’s next for cloud-first adoption?

There is no denying the fact that the future of the delivery logistics arena is firmly fixed in tech innovation. The change of the landscape brought upon the cloud has shown as much.

But the role of the cloud as a driving force of last-mile automation will remain relevant even as new technologies emerge.

Already, cloud computing is paving the way for the next wave of digital transformation. The connectivity and agility that is helping organizations achieve their business goals are also enabling integration with AI and machine learning systems.

Companies are using AI algorithms when extracting, analyzing, and using data from third-parties to increase the efficiency of the final mile.

But even more, changes are yet to happen. Companies that position themselves well now, will be in a better position to reach their goals tomorrow. And that’s why the adoption of a cloud-first approach to delivery management is so important.

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