SaaS Logistics Systems vs Custom Logistics Software: How to Choose

With the increasing demand for timely delivery, logistics businesses must keep up with technological innovations and use appropriate software products. There are many moving parts involved in logistics, and any issues can cause costly delays and losses. While most logistics processes have moved from paper to software-based tools, off-the-shelf tools may not always be suitable for changing business environments. 

That said, let’s discover how businesses are choosing between these two solutions:

Understanding SaaS Logistics Systems

SaaS is short for “Software as a Service”, which means that a business builds a software product that serves a particular purpose (let’s say to track the location of a fleet of vehicles). Multiple companies pay for this recurringly and use an online interface (web-based or mobile-based) to access this individual software.

Why Businesses Use SaaS Logistics Solutions

One of the primary benefits of using a SaaS-based logistics solution for businesses is the quick availability of the solution. The company can generally buy this solution off the shelf without having to wait for a long time.

Challenges to Consider

One of the most significant challenges in choosing software for logistics is customisation. SaaS products are typically built with limited customisation options, so logistic businesses may end up paying for features you don’t need or miss out on features they do need. 

Additionally, SaaS companies usually only add new features if many customers request them, so if you’re part of a small group that needs a specific feature, it’s unlikely to be added. 

What About Custom Logistics Systems?

A custom software or system is built from the ground up for each individual or business based on their unique needs. As such, the custom software development business will first understand all the requirements that your business needs and assemble a set of features that will help you achieve your objectives as a logistics business.

Once signed off, the custom logistics solution is built and deployed for the logistics business to use in their operations. For instance, a study by Oracle revealed that 77% of customers expect companies to offer self-service options for tracking and managing orders, a feature easily implemented through custom software​.

Why Choose Custom Logistics Solutions?

One of the most significant advantages of getting a custom logistics solution is the ability to customise it and tailor it to your specific requirements. It could replicate your existing process and connect with external tools or systems when required based on how you run your operations right now, making it more effective than SaaS-based solutions.

Challenges to Consider

The time it takes you as a business to access the tool. As discussed above, SaaS solutions are off the shelf and can be purchased almost instantly. But a custom solution needs to be built from the ground up exclusively for your business, so it would take some time (based on what and how many features you are looking for in the solution).

Another challenge would be the cost of building it. The cost to build custom software can vary widely depending on the complexity and features integrated into the project. There is no upper limit to the cost, highlighting the significant initial investment required for custom solutions​

SaaS Logistics Systems vs Custom Logistics Software: How to Decide

As a logistics business, you must decide which solution fits your purpose appropriately. Here are a few factors that you should be considering when making this decision:

Access your requirements

Before you visit a SaaS vendor or a custom solution provider, you should have a document ready listing all the challenges you want to solve using this solution. It would ideally result in a feature list, which will form the basis of your search for a vendor. 

Once you have this list, it’s time to review existing SaaS products and see if they meet all the requirements or lack some of the features you are looking for. 

Evaluate budgets and resources

As you start exploring options (SaaS or custom-built), you must consider what budget you have put aside for this. As discussed previously, most SaaS companies have monthly or yearly payment plans. In comparison, most custom logistics solution providers either have monthly (till the product is delivered to the customer) or milestone-based payment (where each feature built is paid for). 

The Role of Data Security and Compliance

Data is everywhere today, and along with it comes the extra responsibility of preparing for the proper security of that data. As a business, your logistics company collects and processes a lot of data daily, including business and individual details like contact information and addresses. 

In fact, A survey by PwC found that 38% of logistics companies have significant unresolved questions regarding data privacy and security. This is why it is essential to have clear plans on how you, as a business, think about the security of this data, which should help you in the solution consideration process.

Long-term Scalability and Adaptability

Another area to consider is how the logistics solution can help you in the long term. As a business, you know that the business environment is changing daily, and your business will have to keep tweaking itself to match where your customers and the market are going. 

In this scenario, you need to consider how the solution you will use for your business can adapt and scale according to your changing business requirements. You must also consider how this solution can help if your business expands to international markets.

The Right Choice for Logistics software

Ultimately, if you’re not leveraging the latest technological innovations, your logistic company might be missing out on optimising processes and maximising your bottom line. 

Have a project in mind? Speak to our expert team at Vector Software to discover how we can help you streamline your logistics operations and enhance your supply chain management.

Vector Software in Action

Consider a project like VISSIM, where we worked with the world’s most extensive vessel management system and helped them upgrade their existing systems per their requirements. By opting into investing in custom logistics solutions, VISSIM was able not just to boost their existing platform but to add brand new features that helped them and their customers better.