Syntelic White Paper

June 2011

Build vs. Buy

The choice between an in-house application and Syntelic for Transportation Intelligence

Table of Contents
Executive Summary Introduction The Transportation Data Challenge The Build vs. Buy Decision What is the strategic value of a new system? What will it take to build an in-house? How would an in-house system be deployed? How will we support and maintain our own system? The Syntelic Solution Conclusion

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Build vs. Buy

Executive Summary
Companies that need to integrate their transportation data to better execute daily operational activities, enable analytics, and improve visibility, have a decision to make. For Transportation Intelligence should they build an in-house solution or invest in a third-party solution? This white paper examines the challenges of in-house system development and the factors to consider when making the buy vs. build decision, including weighing the strategic value, the requirements, the costs, the maintenance considerations, and the bottom-line trade-offs. The paper also describes the benefits of Syntelics transportation solution compared to in-house development or settling for the status quo.

Introduction
When considering a new information technology (IT) project for a business organization, one of the first questions often asked is: Should we buy it or should we build it? Most large companies have internal IT staffs that include software developers, database administrators, network administrators, and other technology skill sets. These internal teams are often capable of tackling a wide array of projects. They have the necessary knowledge and resources to develop in-house solutions, manage development projects through third party contractors, or augment existing systems with off-the-shelve tools. However, in the final analysis, these three questions drive the decision: 1. 2. 3. Can an outside vendors solution meet our business requirements? Will we save money by building an in-house solution? What are the advantages and disadvantage of either path?

Companies with smaller IT departments often face the choice of licensing desired solutions, or using some combination of existing off-the-shelf products to address needs, often living with the inadequacies. In both cases, the costs of each optionbuild or buyshould be carefully considered before making a decision on which approach is best for your company.

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The Transportation Data Challenge

Building a solution to manage and leverage the value of transportation data presents a unique set of challenges to both large and small companies and their IT staffs. Data for transportation metrics is primarily derived from two sources: route planning systems (planned data) and onboard computer systems (actual data). This core data can also be supplemented by customer credit and order data from an order management or a warehouse management system. Defining a data structure and interface processes to blend planned and actual data into an easily accessible format can be a complex task. Planned route data is typically stored in a hierarchical structure of route, stop, and order with supporting data such as trailers, tractors, and drivers. Onboard systems usually track route activity as sets of events such as driving, unloading, layovers and delays. Onboard computer systems also create additional records to track information such as fuel consumption, idle time, and odometer readings. The distinct differences between the two data structures makes accurately associating the plan with the actual a tricky problem.

Planned Data
Routes Stops Orders Trailers Tractors Drivers

Actual Data
ROUTE EVENTS Driving Unloading Layovers Delays PERFORMANCE Fuel consumption Idle time Odometer reading

The onboard computing world is constantly changing in order to better leverage technologies such as GPS. These changes affect the content and structure of the onboard data, making the interface process a moving target. To further complicate the management of onboard data, much of the data quality is dependent upon user activities and input. Building an effective interface often requires a fundamental knowledge of the business processes, timing, and data flow of the source systems. Some companies elect to use only the reporting tools provided by either the routing system or the onboard system. These tools usually provide basic transportation metrics

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but do not provide users with the flexibility to fully leverage the available data by creating flexible on-demand reports that reveal historical trends and performance comparisons between drivers, equipment, and other factors.

The Build vs. Buy Decision

In most cases, the return on investment of a readyfor-market system can be realized in less time than it would take to build a similar solution in-house.
When making the build vs. buy decision, companies should carefully to define and quantify all of the comparative costs. Building and owning an internally developed system usually involves costs beyond the initial development price tag and includes system deployment and training, ongoing development, user support, and documentation. Companies often overlook the substantial cost of deferred benefits incurred while waiting for a new product to cycle through the IT teams busy schedule. In most cases, the return on investment of a ready-for-market system can be realized in less time than it would take to build a similar solution in-house. Your organizations needs, resources, and business priorities must be weighed in making this important decision to build or buy Transportation Intelligence. Such a decision should not be made narrowly to address an obvious need without also including input from expected users, transportation management, IT managers, and business executives.

What is the strategic value of a new system?

The potential flaw of any in-house solution is that the scope of its functionality will be narrowly defined to fit a limited set of initial requirements. Limitations become roadblocks when users need to do anything beyond the narrow functions that were first specified and hard-coded into place. With the passage of time, and evolution of business processes, if the system is not designed to adapt to meet new requirements, it will lack long-term strategic value. Even its tactical usefulness might fade. For example, most route planning and onboard computer systems include a basic set of transportation metrics reports. These systems usually provide snapshot type reports focused on a days activities, as well as a limited offering of historical and comparative metrics. In most systems, these metrics are hard-coded and provide the users with limited flexibility. They are not designed to be modified once installed. Any robust Transportation Intelligence system should provide some or all of the following features: Ability to incorporate client-specific data into the metrics. Comparative metrics for company resources drivers, tractors, supervisors, and customers. Historical performance and trending reports. Multi-layered data to provide the correct level of detail for all users. Drill-down capability to allow examination of causality of performance changes.

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Visual display of data for creating dashboards and scorecards Interactive on-demand reporting capabilities for all user levels Comprehensive suite of key performance indicators (KPIs) including the following: Planned vs. actual route execution; On-time delivery performance; Driver performance and score-carding; Fuel efficiency; driver safety; and Delivery accuracy Flexible data import/export capabilities

What will it take to build a similar system?

To successfully develop a unified in-house system, your internal team will need to acquire in-depth knowledge of the onboard and route planning systems, both operationally and in terms of the data structures. You will need to determine how to blend the two data sources (planned and actual) through a matching process that accurately associates all of the actual driver and equipment activities with the correct stops on the planned routes. This is the first and most critical aspect of the system design. The connection between planned and actual route data must be consistent and reliable if the metrics are to be meaningful. The metrics capabilities can also be expanded to include sales, credit, and ordering trends. Adding these metrics will broaden the system to include a customer-focused view of your operation. An easy and reliable integration process between Enterprise Resource Planning and the transportation system will be required to add this valuable dimension to your system. For the ease of use that will make the system successful, your team will need to develop intuitive user interfaces for reports development. This should include pre-defined formulas for common metrics, graphic data visualizations, and multi-layered data views that meet the needs of all employees from executives to shift supervisors.

Complex programming tasks:

User Interface Design Pre-defined formulas for common metrics Graphic data visualizations Multi-layered data views Security User roles & permissions Firewalls

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For larger companies, a flexible security structure will be required to allow system access to all users while properly managing access to appropriate data. All of these components are complex programming tasks that will consume many costly man hours. An alternative approach to building a single solution is to utilize one or more common commercial tools such as Crystal Reports or Microsoft Excel and Access. These tools include some graphics capabilities, dynamic data filtering, and database management capabilities. This approach might seem more desirable for smaller companies where large software development projects are impractical. The primary challenge with this type of solution lies in the data exchange process. Using multiple tools typically requires manual movement of data in various formats between systems. Loss of data, data integrity, or consistency between systems is always a risk. The keys to success with this type of system are: a well-defined data exchange process; a system maintenance process and schedule; and a data validation strategy. Another challenge with using general purpose tools is that they are not tailored specifically for distribution operations. Thus, time and resources must be invested in the development process to ensure that the tool works with other distribution solutions. Weighing the costs It may seem as if there are no costs associated with an in-house IT project, since the salaries of in-house programmers are already being paid. However, tracking the total hours spent on the projects software development will measure the opportunity cost of whatever important work it displaced. The time spent on the inevitable new research required to solve the projects challenges as well as software testing and deployment, might be considered sunk costs if the knowledge is never used for other IT projects. The delay in productivity gains during the months (and sometimes years) it takes to perfect the in-house system, are further measurable costs.

How would an in-house system be deployed?

To deploy an in-house system, your company will need an implementation team with the appropriate skill setstraining, transportation knowledge, and knowledge of the new application. The implementation process will usually require some travel, reassignment of regular duties to other staff, and availability of the project team for follow-up activities with the user base. Key members of the implementation team will usually function as design consultants for the application, which is another costly commitment of resources. Deployment of a new system will require preparation of effective training plans and materials. The relative expense and effort level for this preparation is dependent on the companys in-house resources and skill sets.

Build vs. Buy

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The costs and implications of reassigning or deferring the work responsibilities of project team members should be factored into the build vs. buy decision. Reassignment of duties often results in training costs for replacement staff. Deferring or delaying of other assignments can result in lost savings when team members must choose one productivity project over another.

How will we support and maintain the system?

An in-house system will require permanent company resources to support and re-train the user base as employees come and go. As reporting needs evolve, there will be a constant demand to provide additional data interfaces, metrics, and system features. This can be prove expensive over time. Additionally, as routing and onboard systems change or are replaced by other technology solutions, the internal development staff will be tasked with modifying or re-designing the primary data interfaces. In some cases, re-designing the interfaces may involve new technologies, such as moving from database connectivity to web services. Your development team will need to dedicate ongoing resources to maintain an effective, centralized system.

Hidden Problem: Lack of Process Improvement

There is the real possibility that an in-house development team sticks with what it knows how to do, falling back on tried-and-true methods rather than the latest software advances. Custom-built solutions tend as time goes on to fall into the category of legacy systems, those complex amalgamations of code written by programmers who may no longer be around to explain their work. Thus, inertia creeps in, and any attempt to make changes risks having the system crash.

The Syntelic Solution

Syntelic Solutions Corporation is a Microsoft Silver Certified Partner. To achieve this status, the company has undergone a thorough, auditable selection process to demonstrate its expertise as an Independent Software Vendor (ISV).

Syntelic Solutions Corporation has dedicated our efforts to providing best in class solutions for the transportation needs of companies with private fleets. Our business focus and the backgrounds of our team members have allowed us to provide a unique solution that is not easily replicated by an internal system solution. Syntelics Product Development and Client Services teams have many years of experience in the transportation and distribution industry. We have spent the past 15 years working closely with every major onboard computer and route planning system vendor to build interfaces between those systems and Syntelic. Through years of partnering with other vendors we have acquired in-depth understanding of operational processes and data structures of many transportation support systems.

Build vs. Buy

Syntelic Solutions Corporation

The knowledge we have acquired has allowed us to design, evolve, and perfect efficient interfaces to all of these systems. We have developed a unique matching logic that blends the planned data from any routing system with the actual data from any onboard computer system. Syntelic can ensure that every activity logged in the onboard computer systemdriving, on-duty, delays, layovers, odometer reading, etc.is associated with the correct route and stop from the routing system. Syntelic provides the widest array of transportation metrics and reporting tools available on the market. Our system is easily tailored to the specific needs of each client. Syntelic provides on-demand access to the KPIs that make or break your business. Among our standard suite of metrics are: Planned vs. actual route performance On-time delivery statistics Service time analysis Driver productivity Fuel efficiency Delivery accuracy

All of the standard metrics provide summary level views and dashboards for company executives, as well as detailed information needed by managers and supervisors. Syntelics user-friendly reporting engine can also be used to develop scorecards, graphical views, historical trend analyses, payroll functions, and many other valuable tools. Syntelic gathers data from many external sources, including onboard computers, route planning systems, warehouse management systems, and spreadsheet programs. It then

ROUTING SYSTEM

ON BOARD COMPUTER

Planned Routes

Actual Routes

WMS ERP OMS

Orders and Credits & Claims Item Master

SYNTELIC
Transportation Metrics Driver/Equipment Mgmt
HR, Equipment, Financials

INTERNAL DATA

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Syntelic Solutions Corporation

blends these disparate data elements into a single unified database. All of these data elements are logically interconnected, which simplifies accessibility for the users and enables in-depth data drill downs. Syntelic provides pre-built formulas for your common transportation metrics such as MPG, cases per hour, average speed, plan vs. actual variance, etc. to empower your user base to create queries and reports without the need for extensive training. In addition to accurate data management, Syntelic has developed and refined its user interface and reporting engine to be very easy to use. Syntelic provides many valuable features, such as intuitive data view design, drilldown features, configurable menus, graphical reporting, dynamic sorting and filtering, pre-built common formulas, flexible data exports, and email capability. Syntelic also includes a robust security structure that provides users with system access that matches their roles and job responsibilities. Syntelics security is designed to manage access to multiple business units and data levels within a single environment. Syntelic offers implementation services to efficiently configure and deploy its products across multi-location businesses with large user bases. Implementation specialists help configure the system, develop the security structure, and define and build custom metrics required for your business. Syntelic also provides user training for all levels and types of users including System Administrators. Many large companies prefer a train-thetrainer approach. These services are available as well, and include training materials and a classroom agenda. Syntelic provides regular software maintenance releases on a quarterly basis, as well as two major releases per year. In addition, we respond quickly to emergency requirements such as version changes to routing and onboard systems, and occasional system defects. There are many long-term costs associated with building an internal system that ultimately results in a more costly product than that is inferior to Syntelic. We expect our clients to see their return on investment within one year of deployment. In most cases, building a similar in-house system will take more than one year to complete and deploy. By the time the system is ready for use, Syntelic would have already paid for itself and saved the company the internal project costs.

Conclusion
Building your own homegrown Transportation Intelligence solution is an option for large companies with the IT resources in place to develop, deploy, and maintain such a system. However, as this white paper details, when fundamental strategic issues are taken into account, licensing Syntelic may well be the best option. Syntelic is designed specifically to meet the reporting and analytics requirements of diverse distribution operations by being highly robust, flexible, scalable, fully integrated, and regularly updated.

Build vs. Buy

Syntelic Solutions Corporation

About Syntelic
Syntelic is a focused distribution solution for analyzing data and driving daily warehouse and transportation activities.

The Decision Engine that increases operational visibility,

unlocks operational improvements, and empowers users to make better decisions.

The Hub that integrates your vital supply chain data, transforming raw data into business intelligence.

The Dynamic Workspace that is flexible enough to adapt

to your business processes, go beyond the limits of other systems, and evolve with your changing needs.

Build vs. Buy Published by Syntelic Solutions Corporation 20410 Century Blvd., Suite 210 Germantown, MD 20874 | sales@syntelic.com | www.syntelic.com 2011, Syntelic Solutions Corporation. All rights reserved.