SaaS vs On-Prem Software: Which Is Better for Last Mile Logistics?

For businesses that have always used on-premise software deployments, it’s easy enough to stick with the mantra, “if it ain’t broke, don’t fix it.” After all, deploying software solutions on your own internal servers was the norm for decades in most businesses, and it’s hard to justify all of the change management that comes from moving to an unknown quantity like cloud technology.

But here’s the thing—the cloud isn’t really an unknown quantity anymore. Many SaaS solutions have been around long enough to have a track record of easy deployment and use, and it’s worth considering that in many cases it may present a better alternative to on-premise options. Many of the most innovative modern businesses are focused primarily on SaaS technology, which makes it more likely that you’ll get strong ongoing support after your deployment.  

This is especially true if you’re evaluating new software solutions anyway. If you’re considering multiple solutions that are a mix of cloud and on-prem, here are a few considerations that you should have in mind to make an informed decision. 

Hidden Costs of On-Premise Software

Simply put, on-prem technology has a number of hidden costs. Sure, there’s the upfront expenses that come with purchasing servers and implementing the technology. But conventional wisdom suggests that once you’ve made that initial expenditure, your costs for operating on-prem software are lower, since you’re not paying a monthly licensing fee. 

Unfortunately, that’s not always how it works out. For one thing, you’ll need to replace those servers every 3-5 years—and you may need to add on additional servers at a later date in order to scale. There’s also in-house costs for ongoing maintenance. For many businesses, this requires retaining on-site IT staff above and beyond what might ordinarily have been necessary. 

Beyond that, there’s the fact that software updates are entirely your team’s responsibility. This means there’s no guarantee that you’re always running the latest version of your software. Likewise, there’s no guarantee that each different branch is running the same version of the software. This can create issues around data security and compliance, but it can also mean that you’re losing out on newer features that could add value for your team. If the software provider you’re working with has launched new capabilities that could speed up routing time and save person-hours, there’s no guarantee that you’ll be able to take advantage of it in a timely way. 

This slow upgrade cycle can also manifest itself as slow responses to bug fixes or other technical requests. A cloud software provider will typically push out updates every few weeks to fix bugs and deal with maintenance issues that may have come up in various deployments—whereas an on-prem provider might take significantly longer to address these concerns, if they address them at all. In some cases, getting ongoing support from on-prem software providers can be a challenge in and of itself. 

Part of the issue here is that many software providers have been ending support for their on-prem platforms, essentially leaving existing users to fend for themselves. When this happens, it gets harder and harder to get support from the provider, and the result is that your software is less and less capable of meeting your needs with each passing year. Ultimately, that puts delivery businesses in a position where they don’t have the right tools to plan and execute efficient deliveries. 

Cost Advantages of SaaS Technology Deployments 

SaaS software by its very nature alleviates most of the issues we outlined above. Because the onus is on the provider to push out updates and ensure security best practices, a trusted provider will essentially take all of those concerns off your list. The result is that you can be confident that you’re always using the most up-to-date version of your software solution—and that all of your branches are using the most up-to-date version as well. Likewise, you’re always using the most secure version, since any potential vulnerabilities should be caught and addressed by the software provider.

 A true SaaS solution will also be more easily able to respond to requests for bug fixes, upgrades, and new features—to say nothing of provisioning new licenses or add-on capabilities. Processes that would have required serious IT staff effort can now be done with an email or two. Generally speaking, getting ongoing support from a cloud-based software provider tends to be easier as well. 

All of this adds up to fewer headaches, less frustration, and software that just works. It puts you in a position to save on labor and equipment costs, plus all of the costs that pile up when your software doesn’t do its job effectively.  

How Cloud Technology Improves Last Mile Logistics 

So far, we’ve talked a lot about the differences between cloud and on-premise software more generally. But how does SaaS technology impact last mile logistics in particular? After all, you’re not purchasing software in the abstract—you need it to handle a specific job, whether it’s routing, planning, or delivery tracking. 

Here, the benefits of a cloud solution start to become even more obvious. For many delivery businesses, seasonality is a fact of life—which means the ability to scale the number of trucks and orders you’re routing at specific times of year is crucial. Luckily, that’s something scalable cloud solutions are designed to offer easily. Basically, you can increase or decrease usage as needed, including rolling out to additional branches, without a lot of internal IT setup and implementation work or the expense of additional servers to maintain. 

Zooming out a little, it’s also worth considering that logistics SaaS solutions often integrate more easily with other parts of your IT stack. This ability is absolutely critical when it comes to rolling out smooth last mile deliveries. It needs to be easy to access the information you need at exactly the moment you need it if you’re going to efficiently plan and execute deliveries across a large network, and the kinds of integrations you get with cloud-based ecosystems make that much easier. 

For instance, your last mile logistics  software might integrate bidirectionally with your ERP and your telematics systems, meaning that you can access near-real-time information when planning deliveries. This means that you can generate delivery routes more easily and without having to move order data between systems. Likewise, when the deliveries are underway, you can track locations from directly within your delivery management platform in order to spot potential exceptions more easily and resolve them more quickly. 

Successful last mile delivery management ultimately requires you to be able to do as much as possible from a single system. When planning, routing, scheduling, tracking, communicating, and reporting are all under the same roof, you can suddenly find new efficiencies across the entire last mile. You can ensure that customers are kept apprised of their ETAs throughout the entire delivery process. You can make adjustments to routes and schedules when last-minute orders come in. In short, you can be flexible and agile in a process that has historically been slow and complex. 

The differences in cost and ease-of-use between on-prem solutions and modern SaaS software options are increasingly stark, especially as many on-prem providers stop offering ongoing support. But at the end of the day, the argument for SaaS goes beyond cost—SaaS is just a much better fit for most technology ecosystems.