Building a Business Case for TMS: How to Realistically Position Return on Investment

Before your team can adopt a transportation management system and enjoy all the benefits that it can bring, you need to convince your leaders that it’s a worthy investment. That can be challenging, especially when you’re competing with other, often more visible departments all vying for the same pot of money. Building a compelling business case is critical—and a big part of that is establishing the ROI that your new TMS will deliver.

Recently, we shared some guidance around how to frame your argument to stakeholders. Once you’ve established this framework, your ROI calculations can seal the deal. But it’s important not to get carried away and oversell the tool, as this can erode your leaders’ trust and make it harder to secure investments in the future. Since some of the savings that a TMS delivers are harder to quantify, you need to be crystal clear about what they will and won’t see, and why it matters.

Here’s how to position the ROI of a TMS effectively yet realistically—so you can achieve buy-in and build leaders’ confidence in your department.

Provide benchmarking data to establish hard dollar savings

A robust TMS will deliver both hard and soft dollar savings—that is, money directly saved by the tool and money indirectly saved as a result of other benefits the tool brings, such as greater efficiency.

Let’s be real: hard dollar savings are going to be more immediately attractive to your leaders, so it helps to start your business case with these to grab their attention and convince them to hear you out. But vague assurances aren’t enough. Aim to provide specific details—like the percentage of transportation spend that could be slashed and the number of dollars that could be put back in the bottom line.

Benchmarking data can help here. For example, at CTSI-Global, we work with supply chain professionals to benchmark their current costs and compare this to what they could have paid on a shipment-by-shipment basis using our TMS. They can then demonstrate to their leaders how much money could be saved on a monthly or even a weekly basis if they had a TMS. That way, it’s not speculation or best-case scenarios that raise the bar too high—it’s real, undeniable data that opens eyes and drives investment.

Go beyond anecdotes to prove soft dollar savings

Once you’ve reeled stakeholders in with hard dollar savings, you can give them the final nudge they need by emphasizing the additional value a TMS can bring in the form of soft dollar savings.

Efficiency gains are perhaps the most obvious of these savings. By automating time-consuming manual tasks, a TMS turbocharges your day-to-day operations and expands your team’s capacity. This, in turn, gives your team more time to focus on strategic work, which can lead to innovation gains down the line. And since they no longer have to spend their days dealing with tedious tasks like data entry, their job satisfaction is likely to go up, reducing costs associated with low employee engagement and high attrition.

Of course, anecdotal evidence can only take you so far, so look for ways to drive these soft dollar savings home with facts and data. When we’re working with supply chain managers to help them build their business case, we provide an ROI calculator that they can use to bring these savings to life. They know their businesses better than we do, so we give them the tools they need to turn that knowledge into tangible data.

Provide reports after investment to reinforce the benefits

After you’ve achieved buy-in and implemented your TMS, be sure to provide follow-up data that proves ROI.

If your TMS has built-in business intelligence and reporting capabilities like Honeybee TMS™ from CTSI-Global, compiling and sending out these reports should be a breeze. We make it easy for the shippers that partner with us to customize their reports and share the data their leaders care about the most—all presented in a way that’s easy to read and quick to impress.

With impressive reports coming in month after month, leaders will be left in no doubt that they made the right decision—making them more receptive to future requests from your team.

Don’t undermine your business case with dodgy ROI calculations

The ROI that a TMS generates can be unbelievable. But by striking the right balance between impressive and attainable, you can make your leaders believe—and prove to them that their belief was warranted.

If you need help crafting your business case and keeping it grounded in real data, we can help. Get in touch with our team today and discover the true savings a TMS can bring.

Reader Interactions