In 2020, Gartner analyst Balaji Abbabatulla predicted that most most supply chain operations would migrate to the cloud by the end of 2022. As more brokers pursue solutions that support and integrate with the supply chain automation needs of partners and customers, it looks like he was right. More and more organizations in the logistics space — especially freight brokers — are moving financial transactions, transportation management, and other critical processes to the cloud.Why? Here are just a few of the factors driving freight brokers to replace their legacy systems with cloud platforms — and why you should think about doing the same:
1. Integration and Flexibility
Companies developed many of yesterday's legacy systems to handle specific tasks. For example, your legacy payment platform might issue and process invoices, but that's it. While these legacy systems perform their functions well, they have inherent limitations. As a result, freight brokers must often buy different pieces of software to handle different processes, and those software tools rarely communicate with each other.
When software systems don't share data, your team has to spend a lot of time on inefficient administrative processes, entering and reentering the same information into disparate systems.In contrast, cloud solutions are all about integration and flexibility. The average cloud platform bundles multiple functions into a single solution, allowing freight brokers to do more with a more straightforward software system.
For example, Denim's online financial platform can process invoices and payments while also supplying factoring services, credit checks, custom reports, and more.In addition, cloud solutions typically communicate with other cloud software through application programming interfaces (APIs). Essentially, that means different cloud solutions can share data, even if distinct companies make them. That streamlines operations and significantly reduces administrative work for employees. For example, Denim's platform can integrate with QuickBooks and various transportation management systems (TMS), making it easier to track shipments, payments, and vital accounting information.
Cloud applications also have a scalability advantage over their legacy counterparts. Because cloud platforms can integrate with one another, it's far easier for a cloud software ecosystem to grow alongside your business. You can easily add new tools to your arsenal as needed.With legacy systems, tapping into new lines of business, reaching new partners, or gaining new insight into your company's operations often requires purchasing or commissioning a brand-new specialized software solution. Unfortunately, that also means another tool your people need to learn.
With the cloud, on the other hand, you can often find a solution that does the job and integrates with your existing software, creating a streamlined experience that requires only a minimal learning curve for your team. Given the rapidly evolving pace of logistics automation technology, this ability to adapt quickly has become essential.
Because cloud apps are hosted online instead of in-office hardware, you can also access them anywhere. In short, cloud solutions support remote work. As a result, those brokers already using cloud solutions had an easier time maintaining operations during COVID lockdowns. Similarly, cloud-savvy brokers will also find themselves prepared to weather future disruptions.In addition, given that 57% of job seekers want to work remotely, adopting cloud solutions makes your company more competitive in a tight talent market.
Supply chains are complex, with many (literally) moving parts. And freight brokers may have the most complicated position of all — connecting shippers and carriers, managing relationships with both, and ensuring every party gets what they need from the transaction. All that complexity can make it hard to move freight quickly and efficiently where it needs to go, but speed and efficiency are key differentiators for great freight brokers.
Cloud applications can help simplify things in your freight brokerage. By integrating your technology platforms into a cohesive, interconnected system, you make it easier to carry out critical business operations. Data flows between the tools, automating more complicated procedures like processing payments and tracking freight. That, in turn, makes it easier to avoid common mistakes like duplicate invoices and payments. Your team members also have less administrative work to do, allowing them to focus on high-touch, high-value tasks.
4. A Better Partner Experience
While simplicity is a boon to your staff, shippers and carriers will also appreciate the way logistics automation will streamline your operations. You'll be able to make connections between shippers and carriers much faster, and the data gathered by your cloud solutions might even help you make more efficient connections.With a cloud-based payment platform, you streamline the invoicing process and facilitate payment faster from shippers.
This type of supply chain automation means shippers will be happy because they won't have to deal with complicated payment processes, and you could even see fewer late payments as a result. Also, carriers will appreciate getting paid faster, especially if your cloud payment solution has a QuickPay feature. According to some estimates, 90% of brokers still don't have fast digital ways to pay carriers. As such, a cloud platform with QuickPay sets you apart as an ideal broker partner for carriers.
Resilience is the ability to bounce back from tough times and overcome any challenges that come your way. In recent years, resilience has become a must-have for freight brokers, and cloud systems are inherently more resilient than their legacy counterparts.There are a few reasons for this:
- Flexibility. The integration capabilities of cloud platforms make it easier to update your software environment to better support sudden changes in business operations.
- Power. Cloud platforms also tend to be more powerful than legacy systems because they run on the web instead of depending on the processing limitations of an in-house server. That means cloud platforms can typically process more data at a faster pace.
- Security. Cloud apps support data security by keeping your data backed up in online systems. So no matter what happens to your in-house hardware, your data will be secure and accessible. This factor is significant today, with cyberattacks like ransomware on the rise. Cybercrime has increased by 300% since the start of the pandemic and costs the global economy $6 trillion per year. By keeping your data in secure cloud platforms, you can better avoid the costs of cyberattacks — and the damage your reputation would suffer if sensitive partner information were leaked.
Make the Move to the Cloud
Legacy systems may have served your brokerage well so far, but they simply weren't designed for the fast-paced, data-driven, high-tech world of today. You can try to keep up with the rapid pace of supply chain automation by bolting more software tools onto your legacy system.
However, you're likely to end up with an overcomplicated mess that only makes your people's jobs harder.In truth, every modern freight broker must now be a digital freight broker. By switching to cloud platforms, freight brokers can streamline operations, simplify their software systems, and deliver better experiences for shippers and carriers alike. If you’re interested in learning more about how Denim can help grow your credit and help build your business, we’d love to talk.