Carrier integrations to SAP TM - What to choose?

[geirr_winsnes]

When integrating carriers to a TMS system, ie. SAP Transportation Management, two primary approaches are peer-to-peer connections and collaboration portals. Each has its strengths and considerations, and the best option depends on your organization's specific needs and operational priorities.
Below I'm listing a few arguments, but there will probably be more to take under considerations...

Peer-to-Peer Connections
Peer-to-peer connections involve direct integration between TMS and the carrier systems using APIs, EDI or other communication protocols. This method enables seamless data exchange, such as freight requests, quotations, and tracking information, without intermediaries. Key benefits include:

• Real-Time Communication: Direct connections ensure immediate data transfer, reducing delays in freight management processes.
• Customization: Peer-to-peer setups can be tailored to meet specific business requirements, allowing for greater flexibility in integration. For Execution events this normally require event Event Management to be setup as well.
• Enhanced Security: Data is exchanged directly between systems, minimizing exposure to third-party risks.

However, peer-to-peer connections require significant initial investment in terms of setup and maintenance. Each carrier must be individually integrated, which can be resource-intensive if you work with multiple carriers. Additionally, ongoing updates and compatibility checks are necessary to ensure smooth operations. This makes it vulnerable without extensive and ongoing testing effort.

Collaboration Portal
Collaboration portals provide a centralized platform for carriers and shippers to interact. These portals facilitate processes like tendering, freight order management, and track and trace through a unified interface. Advantages include:

• Ease of Use: A single platform simplifies interactions with multiple carriers, reducing complexity for shippers.
• Scalability: Collaboration portals are designed to accommodate a large number of carriers, making them ideal for businesses with diverse logistics networks.
• Standardized Processes: Portals often follow industry standards, ensuring consistency and reducing the need for custom integrations.

While collaboration portals offer convenience, they may lack the level of customization available with peer-to-peer connections. I.e if a portal lack functionality to collaborate with multiple parties on one freight document, have no functionality for invoice receipt and disputes etc.  Additionally, reliance on a third-party platform could introduce dependency risks and potential limitations in data control. There is also normally a transaction cost for using these portals, that makes it harder to calculate the cost compered to peer to peer. The presence of your business partner is also something to be considered, as onboarding of new partners would probably also need more effort from your business, even though stated differently by the software provider.

Choosing the Best Option
The decision between peer-to-peer connections and collaboration portals hinges on factors such as:

• Business Scale: For organizations with a limited number of carriers, peer-to-peer connections may be more practical. Larger businesses with extensive carrier networks might benefit from the scalability of collaboration portals.
• Budget: Peer-to-peer connections require higher upfront investment, while collaboration portals often operate on subscription models.
• Operational Priorities: If real-time communication and customization are critical, peer-to-peer connections are preferable. For streamlined processes and scalability, collaboration portals are the better choice.

Ultimately, I think the best option aligns with your organization's logistics strategy, technological capabilities of the carrier, and long-term goals. I have done some considerations on a case, but the customer has not yet been able to colculde. Therby I thought reaching out here, hopefully, will at least enlighten some new thoughts, facts and dicsussions. 

- Do anyone have any considerations to share?
- Do anyone have a good, reliable method to calculate Portal cost compared to Peer to peer connections?
- Do anyone have an estimate how much effort is needed from the shipper side, if onbording a carrier which is not present on the collaberation portal already?

Please share your thoughts…