The ROI for IT

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As I’ve noted in this space before, information technology is now a fundamental part of the global transportation business (freight and otherwise). The question many fleet managers rightly ask themselves, though, is how to figure out the return on investment or “ROI” for all the dollars being spent on IT.

Interestingly, a recent survey of global logistics and transportation companies in six countries conducted by Intermec back in April puts some impetus behind that ROI question, as the firms responding to Intermec’s poll believe that they could cut pick-up times by 30% and delivery times by 29% by using the right mobile technology – savings which could be crucial in boosting operational efficiency levels and meeting customer demands.

Now, true, Intermec is not an impartial observer in the transportation IT space, but the firms being surveyed are no doubt as hard-nosed about the freight business as anyone and thus would “tell it like it is” so to speak.

For example, Intermec’s survey finds that 38% of US organizations view operational efficiency as the area of most strategic importance for their business, with more than three quarters (77%) of organizations across U.K., U.S., Germany, France, Australia and New Zealand say their customers now demand same-day delivery services.

Also a further 92% of those companies also claim that meeting these expectations is placing significant challenges on their business to adjust – and answer that should surprise no one in trucking, as delivery times are indeed getting tighter and tighter all the time.

Intermec’s poll also found that most logistics and transportation firms feel that customer demand can best be made through automating key processes in the pick-up and delivery areas, and adopting new technology for drivers such as GPS, mobile and broadband communications.

Those companies also anticipate that by adopting these technologies, the time taken for each pick-up and delivery can be cut by 2.68 and 2.41 minutes respectively, providing a significant boost to the efficiency of the mobile worker and savings over time for the bottom line.

Here are some other findings from Intermec's poll:

  • The survey respondents believe broadband mobile communications (60%), integrated vehicle telematics (44%) and radio frequency identification or RFID (38%) offer the most promising return on investment to their organization.
  • The efficiency gains from new technology could extend to back office staff as well. The survey respondents report that they are receiving 6,677 calls per day from customers asking for order status updates.
  • By providing proactive shipment updates, a process enabled by location-based and mobile technologies, these same companies believe they could eliminate 24% of those calls immediately.
  • This equates to 1,602 calls per working day, a time saving that could then be used to better serve a wider range of customers.
  • A further 44% of companies feel that process re-engineering is the most effective means of improving operational efficiency levels.
  • Overall, transport and logistics managers feel that a process re-engineering effort can improve efficiency levels by over 13%.
  • Yet despite this, over a third (39%) of them said they’ve failed to complete a process re-engineering effort in the last year. 
  • Of these, nearly three quarters (72%) have not evaluated their existing processes for at least two years.

Something to think about as the IT only continues to entrench itself deeper into the bones of the trucking business. 

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