Differences Between On-Premise TMS and Cloud-Based TMS

Are you looking for a Transportation Management System (TMS) for your trucking and freight company? You may not realize it — but you have different options on the market. On-premise TMS and Cloud-based TMS platforms give freight companies the option to choose the platform that fits their needs best, which makes it important that companies understand the key differences between On-premise TMS and Cloud-based TMS. 

On-Premise TMS vs. Cloud-Based TMS

In the world of logistics, a complete and comprehensive Transportation Management System (TMS) platform is almost a necessity. It's the central nervous system for freight operations that will help freight companies optimize operational processes, streamline workflows, and gain visibility into your supply chain. But when it comes to paying for and implementing a TMS, there is a fundamental decision that needs to be made — should you choose an on-premise solution or embrace the flexibility of the cloud? Your choice has significant implications for your budget, IT resources, scalability, and operational efficiency that are important to consider.

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What Is an On-Premise TMS?

An On-premise TMS is a software system that is installed and runs directly on a company's own servers and employs their own infrastructure within their physical location. Think of it like owning your own personal data center. For example — a large manufacturing company might have a dedicated server room where their TMS software is installed and maintained by an internal team of IT specialists. This means the company is responsible for all aspects of the system, including hardware, software licenses, maintenance, security, and updates. The data for your TMS is stored locally, giving you direct control over its management and access.

Benefits of an On-Premise TMS

While an On-premise TMS can mean a significant upfront investment, On-premise TMS solutions can provide distinct advantages for certain businesses — especially those with specialized needs or strict data control requirements. These systems may appeal more to organizations looking for complete control over their software and data security.

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• Full Control: You have complete command and control over your data, security protocols, and system customizations.
• Enhanced Security: When a company works with highly sensitive data, some organizations prefer the perceived security of having data physically housed within their own facilities.
• No Recurring Fees: After the initial purchase and setup, ongoing costs might be limited to maintenance and updates, rather than the recurring subscription fees associated with an SaaS model.
• Customization: Businesses that employ an On-premise TMS enjoy greater flexibility for customization to fit very specific and unique business processes.

What Is a Cloud-Based TMS?

A Cloud-based TMS is a software solution hosted on remote servers with online access via a web browser. Rather than buying and maintaining on-premise hardware, businesses subscribe to the cloud-based service — like paying a monthly utility bill or paying for a streaming service. An key example of this would be a third-party logistics (3PL) provider that uses a Cloud-based TMS platform — like TransPlus — to manage shipments for multiple clients. The 3PL simply logs into the platform via their web browser and the TMS provider handles all of the infrastructure, maintenance, and security. Data is stored in the cloud and is accessible from anywhere with an internet connection — which is a key benefit for drivers and dispatchers.

Benefits of a Cloud-Based TMS

Cloud-based TMS solutions have gained popularity due to their versatility and cost-effectiveness, making them an attractive option for trucking and freight companies interested in flexible and scalable transportation management software. The ability of a Cloud-based TMS to deliver powerful functionality without the higher upfront costs and ongoing infrastructure maintenance has made this platform a favorite option.

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• Lower Upfront Costs: A Cloud-based TMS eliminates large initial investments in hardware and software licenses, and typically involves a more cost-effective subscription model.
• Scalability: Cloud-based TMS platforms can be easily scaled to fit your business needs, adding or removing users and features as required.
• Accessibility: Access to a cloud-based system from anywhere, at any time, on any device with an internet connection promotes remote work and flexibility.
• Automatic Updates and Maintenance: The TMS provider handles all software updates, security patches, and system maintenance, which reduces the time and effort your IT Team needs to invest in the platform.
• Faster Deployment: Cloud solutions can be implemented much faster than on-premise systems, allowing for a faster return on your investment.

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READ MORE: What Are the Different Types of Transportation Management Systems (TMS)?

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In the end — the decision between an On-premise TMS and a Cloud-based TMS depends on your business needs, IT capabilities, budget, and long-term goals. Each option presents a distinct set of benefits and things for you to consider.

‍Contact TransPlus today to learn more about how the TransPlus TMS platform can revolutionize your logistics operations with a personalized demo!