Jeannie Martinez, a customer service representative for Fox Intermodal Corp. of Kenilworth, N.J., begins working at the menu screen of Aljex Software. (Photo by Aljex Software)

4/14/2010  Into the Cloud: The Latest in Web-Based Software
By Diana Britton, Managing Editor

"Houston, we have a problem," is a phrase you'll probably never hear from Houston-based Crane Cartage, which provides ground transportation and logistics services. Crane uses Aljex's Web-based transportation management software, and because the system is hosted over the Internet, Crane can access the system from virtually anywhere.

"If Houston goes down, I don't go down," says Kathi Laughman, who is responsible for Crane's technology strategy and implementation.

Laughman says the Aljex system makes disaster recovery a lot easier. But that's just one of the advantages to choosing Web-based software over an in-house, server-based system. While fleets might be hesitant about sharing their data over the World Wide Web, such solutions are becoming more secure, and the Web-based option can sometimes provide a better fit for small to mid-sized companies looking to have the same capabilities as their larger counterparts, without the high infrastructure and ownership costs.

When Laughman was shopping around for a transportation management system for Crane, she wanted to find a solution that would make it easy for the company's staff to do their main job, which is hauling goods, not information technology. But most operating software has to be maintained and kept current. You need the IT staff to manage it, and this requires a certain skill set, Laughman says.

The costs associated with such infrastructure can often be a hindrance to entrance for small and mid-sized companies looking to penetrate new markets, she says. "The costs very often today are tied up in technology. How do you get the full life cycle management without requiring a data center?"

In the cloud

Web-based software, sometimes referred to as "software-as-a-service," or SaaS, can provide fleets with that same functionality without the upfront costs, infrastructure, and information technology resources needed to run an in-house, server-based system.

Marla Grant, director of major accounts at TMW Systems, defines it as "the ability to access software over the Internet." It runs on a third-party server that is managed by third-party IT staff.

You'll also hear the term "cloud computing." Some people say "cloud computing" is a little different from SaaS. Con-way CIO Jackie Barretta, for instance, says cloud computing is "software delivered via the Internet in a very standardized way, and it's always on demand, self demand." Unlike SaaS, she says, cloud computing does not require licensing, and users only pay for as much as they use. According to InfoWorld, however, SaaS is simply one type of cloud computing, and that cloud computing "encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT's existing capabilities."

Replacing infrastructure

Whatever you call it, Web-based software means fleets don't have to worry about the costs associated with building their own infrastructure. "Normally those smaller carriers would be priced out of this type of solution," Grant says. TMW offers Innovative Access Plus, a complete Web-based enterprise solution, which includes operations, accounting, safety and maintenance capabilities.

For a fleet running an in-house system, there are costs to buy or lease the software, the supporting software, as well as paying for IT staff, a server, air conditioning to support the server, and multiple data centers in case the system crashes, according to Chris Borg, CEO of BorgSolutions, which offers its maintenance management software online. "Pure IT cost of a server-based system shows very fast."

TMW houses the Innovative Access Plus software and data on redundant IBM System i servers, located in secure, temperature-controlled environments in two different cities, Grant says.

Carrier Logistics houses the online version of its FACTS enterprise software in a Tier 1 facility, meaning it's fireproof, secure and the data is backed up. According to Ken Weinberg, vice president of sales at CLI, carriers are looking for ways to outsource functionality that is not an integral part of what their core mission is, especially in this economy. Moving to the Web allows them to reduce their non-mission critical staff, such as IT, Weinberg says.

These days, small carriers are expected to provide the same services as the large players in the market. Online software, such as CLI's, offers them the same capabilities with only a few users in the office, Weinberg says. "It allows the small carrier to be much more competitive."

Cost benefits

Kathy Blaker, a manager at logistics provider Transportation on Demand, says the company experienced more up-front costs using a server-based system. Switching to CLI's online software, the company just had to pay a monthly fee to use it.

According to Tom Heine, president of Aljex, the Internet allows software to be priced differently. "Your ongoing expenses become cheaper the first day," he says. Customers can pay to use Aljex's transportation software in three-month intervals, so there's very little risk involved. In addition, there is no up-front software investment, and customers only pay for the features they need.

Less-than-truckload carrier Con-way Freight made the move to the Internet for its applicant tracking and customer relationship management systems, in large part because of the lower cost model, says Barretta.

For example, Con-way Freight has peak times when the systems are buzzing, such as in the morning and late afternoon when drivers come back to the terminals. But when the company has trucks sitting idle, they don't have to pay to use the system, Barretta says.

Easy updates

"Just because it's online doesn't mean you can't get exactly what you want," says Aljex's Heine.

And because software is now on the Web, users can get what they want faster than before. "We can make a change to our system right now," Heine says.

With server-based systems, software providers can take several months to develop an update and send it out to customers via CD. Now, all they have to do is push a button to update everyone's system in real time. "With one click, you can update 10,000 people," says Tony Stroncheck, president of ProMiles, which offers mileage, routing, fuel tax reporting and fuel purchase optimization software.

Several of ProMiles' offerings are available online, including ProMilesOnline, truck mileage, routing and fuel optimization; FuelTaxOnline, fuel tax reporting and automation; and TruckMiles.com, free truck mileage, routing, mapping and fuel prices.

Last year, the company launched FuelSurchargeIndex.org, a collaborative effort of carriers, shippers, software developers and other companies and individuals to properly calculate a fuel surcharge based on daily retail fuel prices along a specific lane.

With roads and fuel prices changing constantly, the Internet-based system lends itself to keeping all these systems up to date. ProMiles is always collecting data, and the Web allows the company to push information out to the industry as quickly as possible. The provider updates tax information, weather and fuel price averages on a daily basis.

BorgSolutions releases a new version of its Web-based Borg Fleet software every three months. "They constantly get the latest and greatest," says Chris Borg. With server-based updates, interfaces can change a lot in three years, he says, and this involves having to re-train employees when a new interface is introduced. In addition, while some providers charge about half or three-quarters of the cost of the previous version to purchase the newest version, he says, Borg and many other companies do online updates for free.

The implementation period also tends to be shorter with Web-based software, says CLI's Weinberg. For example, with CLI's enterprise system, its SaaS solution generally takes about one to two months to implement, while its comprehensive on-premise system requires three to six months.

"All of [CLI's] customers benefit from anything that's updated in their system," says Transportation on Demand's Blaker.

Potential drawbacks

One barrier to adoption for Web-based software is the issue of security. With cloud computing, you may think that data is being entered into the computer in front of you, but that's not the case. "It's going into the clouds," so to speak, says CLI's Weinberg, hence the term "cloud computing."

This is the main reason CLI was hesitant about moving into this market. At first, the company was pulled into the segment by customers in Europe who were asking for it. But when U.S. customers started demanding it too, "It surprised me," Weinberg says. The lower costs of using Web-based software, the expertise available to customers and other benefits seemed to far outweigh any security concerns.

But as more and more technology providers have jumped on board with SaaS, these systems have become more secure.

According to Con-way's Barretta, SaaS vendors, by definition, have multiple sites for housing data, offering fleets built-in "failover" (the ability to automatically switch to a redundant system) in the case of a natural disaster. For example, Salesforce.com, Con-way's new CRM provider, has a site on the East Coast as well as one in California.

Customers of TMW's Innovative Access Plus also benefit from two servers, so their data is backed up.

If you do decide to switch to Web-based software, "be cautious of what information you put on the Internet, and where you put it," ProMiles' Stroncheck warns. "The Internet is a powerful tool if you use it correctly."

For links to more resources about computing on the Web, go to www.truckinginfo.com/hdt/cloudcomputing.

From the April 2010 issue of Heavy Duty Trucking.





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