Why to Buy, Not Build, Your Digital Customer Experience

With a push to digitize being felt across the logistics industry, a tech-enabled Customer Experience has become a driving force in the decision-making process for shippers as they evaluate freight forwarders. Many forwarders are already seeing the ROI of digitizing through their happy customers, their efficient operations, and the overall success of their businesses. But the question forwarders are now exploring—in order to compete and win new business—is whether to buy or build a solution that will elevate their shipper’s experience.

For small- to mid-sized freight-forwarding businesses, there are strong arguments behind buying your digital Customer Experience solution. Although there’s no one-size-fits-all solution, for many forwarders several factors back the allure of buying a solution over building it.

5 Arguments that support buying your digital Customer Experience:

  • Initial Cost
  • Maintenance Cost
  • Technical Debt
  • Time to Value
  • Keeping Up with Emerging Innovation

Before deciding if it’s better to build a platform from scratch or to acquire existing technology, make sure you consider the following points.

1. The Lower Initial Cost of Buying Over Building 

When deciding to buy or build a new Customer Experience solution for your company, it’s important to consider the initial cost of building versus the cost of a subscription to external software.

To Build:

To build a customized, in-house customer experience tool from scratch, there are significant upfront and ongoing costs. The cost of forming a team to build your solution, the time spent building, and the upfront price can make this the wrong route for many forwarders. Additionally, as a freight forwarder, software development isn’t the main focus of your team, and an in-house build may shift attention from the core execution goals of your company.

To Buy:

Purchased solutions include monthly subscription costs that are considerably less than a create-your-own option. These lower initial costs remove the barrier to entry that many forwarders have faced when looking to digitize. 

You’re talking about getting something that’s subscription-based, where you’re going to pay $250k-300k a year, versus spending $3 or $4 million of cash right now.

Greg Bollefer, Green Worldwide Shipping Executive Vice President of Commercial and Product Development

Since vendors have multiple clients, they can spread out their need for revenue across them, reducing costs for each individual customer. Look for software providers that also help the integration with hands-on training and support. Demands to your internal IT will be low as well, saving the cost and time of finding a new employee or team to handle the new software. The lower initial cost can make the endeavor of upgrading and investing in digitizing your Customer Experience a more manageable task.

2. The Continued Maintenance Cost Of Building Your Software Solution

The digitization of the logistics industry has forwarders implementing different software solutions into their workflows and tech stacks to offer the best experience for shippers. Whether it is a Customer Experience solution or another digitized tool, that software needs to be continuously maintained.

To Build:

The maintenance of an in-house Customer Experience software would not only include the upkeep of software, but also having a team of people dedicated to these tasks. Maintaining software requires monitoring it, enhancing it, supporting it, and sometimes implementing new solutions to problems. It requires that specific software development expertise is known by existing team members or a hiring process is started to secure this new talent. Once the right talents are found, having an in-house group of developers can be much more expensive than working together with an external service provider. 

To Buy:

When you choose to buy your Customer Experience solution, you will have a partner to support and continue to improve your shipper’s experience. Software companies are using their expertise in software related hiring to staff their team with people who make your solution run seamlessly. Their work with other companies to provide software will also give them previous experience that will aid them in predicting the maintenance your company will need.

3. The Price Of Technical Debt When Building

Technical debt refers to the cost (time and money) associated with any rework of a software solution. When deciding to build software, there are many factors that can increase your technical debt.

To Build:

Errors in the coding, workflow, TMS integration, features, aesthetics, and more can cause built solutions to stack up technical debt, resulting in additional time and money spent on an already time-consuming project. Trying to stay up to date with emerging innovations, and the pressure of time to value, can cause rushing in-house and lead to more rework. If the solution is shared with shippers before issues are discovered, Customer Experience can be negatively impacted by:

  • Glitches
  • Slowdowns
  • System Errors

Such problems can also lead to your operations team spending more time reporting issues and resolving them internally, instead of having more time to focus on high-value tasks.

To Buy:

Technical debt is not on your company’s plate when you buy. Your solution provider will be spending their time focusing on keeping technology up to date, correct, and applying new innovations in the industry. If any small issues are seen by users, the external software company will be the one tasked with resolving them.

4. The Quicker Time to Value of Buying

An amazing new digital Customer Experience solution for your shippers can mean winning new customers, retaining existing shipper relationships with superior offerings, and even creating a better working environment for your operations team. The sooner that quality solution is in place, the quicker the return on investment.

To Build:

Building a solution takes extensive work and time for companies in-house, but also risks producing solutions that are outdated by the time they launch. Software design conceptualization, development, integration and testing, and iterative modifications must all happen before releasing the product. Additionally, software development projects are known for running late. Spending money on something your customers can not use yet and that will not be up to competitive standards by the time they can, is a recipe for disappointment. 

And they have to get out of that mindset that says, ‘Well we’ll spin something up in-house and we’ll spend the next five years investing internally’ only to deliver something that’s outdated

Holly Scott, OrangeLime Consulting Director

Why wait months or years to solve a problem that you know, once solved, could win you business today?

To Buy:

Buying your solution means having an accelerated time to value due to a ready-for-action platform. From software design to iterative modifications, the process will be handled by your software partner. A software company’s short setup time for your Customer Experience solution can mean a quick, tangible return on the investment and gives value to your shippers immediately. Make sure you choose a company that will help you roll out this solution to your customers and ensure the success of their software with your TMS to get prompt value from it. Logixboard provides integration and continued support to forwarders who partner with us. As we understand the need for efficiency, we ensure that your new Customer Experience is up and running in under four weeks.

Getting that software out there, with no errors and with maintenance strategies in check, is still not the end of the story. Software is in need of constant innovation to stay relevant, especially in industries going through such drastic adoption of digital solutions as the logistics industry.

5. Keeping Up with Emerging Innovation with Bought Solutions

Technology is always evolving. If your new Customer Experience solution is not ready to keep up with the latest innovations, you will be setting yourself up to miss out on new business opportunities.

To Build:

If your freight-forwarding company is considering building in-house software, you need to ask yourself if they can build, maintain, and support a scalable solution. Apart from the frequent maintenance of your offering, your company must be willing to always be in the improvement phase because technology turns stale quickly.

Innovation becomes stale really quickly. You can build, but take a provider like Logixboard, we raised $45 million last year, and all of those funds go directly into building a better product and continuing to enhance it.

Julian Alvarez, Logixboard CEO

Building is only a viable option if you’re willing to embrace that need for ongoing efforts and have the funding to continuously upgrade your offerings.

To Buy:

Staying ahead of the industry innovations will be a priority for your external software partner, ensuring you won’t have to organize team meetings to brainstorm new features for your Customer Experience solutions. Your external software team will be dedicated to enhancing your offerings with new features and functionality on a rolling basis, at no additional cost to you. External software companies’ main priority is to offer innovative, desirable, and successful software solutions—so you don’t have to. The logistics industry has seen waves of funding pour into software companies, such as Logixboard’s recent announcement of a $32M Series B round of funding. Such funding enables software companies to spend their time and money on building the best software solutions for LSPs.

Building your own Customer Experience solution can keep your freight forwarding company a few steps behind your competitors.

The lower costs, shorter time to value, lack of technical debt, and ability to keep your solution relevant to shippers can equate to a strong case for buying your Customer Experience solution.

Continue to provide your shippers with the best logistics experience possible and let software companies provide solutions you can use as tools to achieve those results.

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