So I recently reviewed some commentary by Richard White (below at right), CEO of logistics software provider CargoWise and its parent company WiseTech Global, debating the wisdom of “do-it-yourself” or “DIY” information technology (IT) development: that is, constructing your own software programs to meet the needs of both one’s business and one’s customers.
Now, obviously, White’s firms sell such IT systems so he’s firmly in the anti-DIY camp. Yet, even keeping that bias in mind, he makes some pretty interesting arguments as to why logistics providers – and trucking fleets, too – should give careful thought as to how they craft their IT systems.
This isn’t some academic argument, either, because as well all know freight transportation is heavily dependent on the electronic interchange of data … and if something in that interchange goes wrong, the consequences can be big.
Again, White addresses this DIY IT “dilemma” from the perspective of third party logistics (3PL) providers, but as many truckers offer the same kinds of services, the issues he raises are worth thinking about.
“Logistics providers have a deep understanding of a particularly complex sector of the economy: logistics. They understand customs and trade routes, and have the interpersonal and intercultural skills to deal with customers and agents all over the world,” White says. “They must be constantly focused on the immediate needs of their customers so they can best build and evolve efficient business models to stay competitive.”
But that doesn’t mean that they are best placed to design the software they need to run their businesses, he argues.
“The first is that the development and support of excellent software requires people within a very particular culture, who have a set of very sophisticated technical and team skills that require a deep understanding of this deeply complex art and science,” White explains. “Finding these people is challenging for any business; but keeping them is nigh on impossible – especially if you cannot offer them a constant stream of stimulating challenges.”
The principle reason for that, he believes, is that IT developers tend to prefer to work inside technology businesses, functioning within teams that understand the peculiar challenges of software design.
“The way these companies build their teams and engage their people is manifestly different from the way most companies operate, as their focus on creativity makes them culturally unique in the corporate world,” White says.
As a result, good IT developers need to work with the leading edge of technology all the time because they’re naturally curious and professionally want to keep their skills relevant, he points out.
By contrast, 3PLs necessarily see their challenges from their own unique yet narrow perspective: as a result, will often commit the mistake of hard coding inefficient practices into in-house software, simply because they don’t have the time or the visibility to do things differently.
“To be effective, though, software design needs to go deep into ‘core problems and opportunities’ to replace existing business practices with better, faster and more efficient ways of doing things,” White explains.
“But internal software development projects are usually weighed down as developers are tasked with coding to the level (or a slightly better level) of pre-existing systems and work practices. Thus logistics providers risk spending vast amounts of time and money creating software which is at best ‘similar to the currently available’ and at worst, far behind what is readily and cheaply available,” he warns.
In White’s opinion, internal software projects can become so vast and complicated that “they suck all the oxygen out of the rest of the businesses,” to the point where it can take years and millions of dollars to create something that could be bought “off-the-shelf” for approximately $200,000.
Simply put, software design and manufacturing isn’t easy – and even in cases where an internal development project results in functional software, the rapidly evolving nature of the freight industry means what a company believes is a “final” package must be constantly improved and upgraded.
“New legislation, changes in technology – such as new mobile platforms and innovative operational changes – all need to be integrated into underlying software systems if a company is going to keep up with the competition, let alone take the lead,” White points out.
“Software is not like a fixed asset you can set and forget about,” he cautions. “To be effective, software needs constant attention, and upgrades for both technology and compliance standards. This means that your business will not only be distracted for the duration of the software’s initial development and rollout, but you will also need a software development team to constantly engage with the business as challenges and demands continue to evolve.”
Something to think about, at least, as the freight world continues to become more and more electronically based every day.