Cloud Based TMS: Part III – Risky Business

One valuable reason to move towards cloud computing for your TMS is to reduce your business risks.  Power outages used to mean that both your staff and your customers could be left in the dark.  With a cloud based TMS you just need any sort of internet connection to keep on working.

Here’s how the two compare:

1. Exposure due to backups. Traditional on-site solutions are generally only backed up to disk or tape nightly.  Depending on their size, you may be backing up SQL databases more often and (hopefully) storing them on another server to mitigate against a single physical server failing.  Unless you are rotating drives/tapes and storing them offsite you are still exposed to disasters affecting your physical building.  With a cloud-based solution, many providers use servers based in multiple locations with multiple internet connections through different providers and likely technologies.  As an example, they may have host sites in New Jersey, Texas and California.  Big snow storm shuts down the east coast? No worries as your data was already replicated to the servers in Texas and California.  Each facility backs itself up to the other facilities and possibly even a separate backup location.  All of this is included in your monthly cost as the costs are distributed between a group of customers.  Want to do something similar with an on-site server?  Now you are looking at large capital outlays to purchase additional equipment, increased monthly expenses (such as for additional IT staff, rent for the remote locations, duplicate software, increased internet bandwidth, etc.) and significantly increased IT complexity. To paraphrase Dr McCoy, “I’m a trucker, not an IT company!”
2. Power disruptions. With on-site servers you are at risk of a contractor working two or three streets over cutting a line and knocking out the electricity to your office.  That back-up battery that’s connected to the server probably only has 15-20 minutes before it gets to the point that it will start a shut down of your server.  Unless you have invested tens of thousands of dollars for a backup generator you are probably stuck waiting for the local utility company to send out a crew and repair the break.  During that time, you may or may not have phones, so your customers may have difficulties reaching you.  If you host your own e-mail, then that server is also going to be down.  Even if your customer can reach you, you have no visibility as to where their shipment is and you are unable to enter orders or dispatch loads.  In short, you are stuck waiting for someone else to get you back in business.  With a cloud-based solution, it continues to operate even if the lights are out in your office.  All you need to be able to continue providing to your customers is a laptop and a cell phone.  If your router is down and you can’t get to the internet that way, most cell phones will let you tether a laptop to it so that you can share its data and get back to work.  Yes, cellular data can be expensive, but it is likely less costly than losing orders because you can’t access your system.
3. Cybersecurity. Cloud based solutions are based on keeping security up to date as they have skin in the game.  Yes, a hack into your data will be painful, but to the provider it could put them out of business.  So, they will use things like the latest encryption technologies, 2-factor authentication as well as a team of networking professionals that monitor for intrusions as well as do their own testing to make sure that the bad guys can’t get in.  Think that having an onsite server will prevent this? Wrong.  Your network is connected to the internet, so you do have exposure.  Has your staff applied the latest security updates and patches to your servers and routers?  Is there a user with administrator privileges that has a weak, easily cracked password?  Did your consultant forget to remove any default users or passwords from your routers?  You probably do not have a person who spends their full time on these items and that is what a hacker is counting on.
4. Updates. Most software that is hosted on your own servers require being taken offline while updates and patches are applied.  That means paying overtime to have these applied during off hours or it means that your system needs to be taken down and users left waiting for the process to complete and let them back in.  You are probably only doing updates a couple of times a year, leaving you exposed to any security flaws or just not taking advantage of the latest features that could be saving your organization time and money.  With a cloud-based system applying updates are the responsibility of the provider who has the staff to be able to perform these in a way that keeps any down time to a minimum (if not eliminate it entirely).
5. Multiple ways to use the system. May cloud based providers allow you multiple ways to access the system.  This means you get the choice of how your people work – a desktop/laptop, a tablet or even on their phones.  It may be through a website or with an app.  Regardless of what method it means that YOU control how your people work and where.  Need to outfit an after-hours dispatch person? With the cloud it is no problem – you no longer need to provide a laptop and some sort of VPN connection as you could even just use a $100 tablet.  With server-based software you usually must install software on each individual computer and then provide the connectivity to the server.  This takes more time and it offers less flexibility.
6. Disaster Recovery. Have your own server and there is a disaster that wipes out your office building?  Expect to be down for at least a couple of days while you source and equip a new server, find a building to locate it in (if it has the necessary networking connections), load it with an operating system and the required software.  Now you must hope that you have a recent backup that is complete and then cross your fingers that you can restore it.  Even if you have the backup from the night before you are still going to need to recreate some orders to cover the time between when the backup occurred and when the disaster hit.  With a cloud-based solution you were only down as long as it took you to get computers and an internet connection for your people to use – most likely some of them never left home before getting back on the system.  The cloud-based system most likely exists on multiple servers that generally are in multiple locations.

In summary a cloud based TMS includes a whole host of disaster recovery and business continuity solutions within your monthly fee.  These items “just happen” – they don’t need any intervention on your part.  To try and recreate these with an on-site solution requires large amounts of capital and ongoing expenses, if you can get the skills and facilities to make them happen.  If a disaster happens, it will take days to get an onsite solution back up and running while the cloud solution never went down.  Think you can’t afford to use the cloud because it’s too risky?  The real question is can you afford not to and will getting that wrong put you out of business.