CargoWise edi, a leading provider of integrated supply chain logistics management systems for freight forwarding, serves 1,300 customers in 45 countries with a total of 33,000 users. The Australia-based independent software vendor—whose leading product is ediEnterprise—is committed to offering its clients simple, powerful tools that are inexpensive to maintain and easy to use. In 2007, CargoWise started deploying ediEnterprise using the software-plus-service model from Microsoft. As a result, the sales cycle has been cut from up to three years to just a few weeks. The cost of sale, once up to 75 per cent of the revenue, is now less than 20 per cent. Users can access the application either online or using client software running on their computer. On-demand pricing is helping to win new business even in the economic downturn.Situation
Based in Australia, CargoWise edi is an independent software vendor specialising in the global logistics and freight-forwarding industry with 12 offices across the U.S., Europe, and Asia. As a Microsoft® Gold Certified Partner, the company provides solutions for forwarders, custom brokers, and logistics service providers focused on supply chain execution. Every day, 1,300 logistics service providers consisting of 33,000 users in 45 countries, move goods through the global supply chain using ediEnterprise, its flagship product designed to automate and streamline logistics and freight-forwarding management.
ediEnterprise covers operations, accounts, customs, container freight stations, shipping agents, warehouses, and cartage/trucking organisations. Its customers range from small freight-forwarding companies to some of the largest global players in the industry handling thousands of transactions a week. They include Australia Post, Coles Myer, JAS Forwarding Worldwide, UPS, TOLL International, and Mainfreight International.
|With on-demand pricing and software-plus-services, the sales cycles are less than three months—that’s changed from nine months to three years with the previous software.|
Chief Executive Officer,
Since 2001, CargoWise, which employs around 200 people worldwide, has developed ediEnterprise for the global market using the Microsoft .NET Framework, plus the Microsoft Visual Studio® and Microsoft Visual C++® development systems. Richard White, Chief Executive Officer, CargoWise edi, says: “The product has been incredibly successful, and, as a result, our business has grown exponentially.”
However, because of the growth, CargoWise faced a number of challenges when it came to updating ediEnterprise. Says White: “The strength of ediEnterprise is that it delivers an enormous amount of information from many different sources to our clients. However, as demand for information grows, we need to find ways of combining that information as simply as possible. We also wanted to give our clients a choice either to run the application themselves, or to access it as a hosted service.”
At the same time, CargoWise didn’t want the drive towards simplicity and choice to prevent it from adding ground-breaking functionality to the solution. White adds: “We wanted to be able to blend the application with several services provided by us and other industry players, such as airline scheduling, denied party screening, and border controls. Above all, we wanted to offer a rich interface that blended elements of local software or a combination of hosted software and services.”
CargoWise also wanted to offer a more flexible pricing model, especially because it was facing competition from businesses offering less expensive desktop applications that replicated some of ediEnterprise’s functionality, but at a local level. “Choice is everything. We realised that we had to offer a solution and a pricing model that could better adapt to different sized customers and their specific requirements,” says White.
In some instances CargoWise found that the overheads could rise to as much as 75 per cent of the cost of a sale for ediEnterprise.
“In the current economic climate we’re moving away from the traditional capital model where the customer spends nine months evaluating vendors and then spends one or two million dollars on a software choice,” says White. “Typically, they are looking for substantial returns for a fraction of the investment. That’s why we’re strong believers in what we internally call on-demand perpetual licensing. In this consumption-based pricing model you only pay for what you use.”Solution
ediEnterprise was among the first 50 software applications in the world to be certified for the Windows Server® 2008 and Windows Vista® operating systems.
The company offers ediEnterprise to customers either as a hosted or an on-premises solution, which is popular with smaller freight-forwarding companies who may lack the IT infrastructure to manage the system cost effectively. Clients consume ediEnterprise through a traditional application front end, or through Terminal Services if they prefer a thin-client service.
CargoWise has built much of its business around the integration features of ediEnterprise, which interfaces directly with the Microsoft Dynamics® GP business accounting package. The solution has also been integrated with a range of business management systems from other vendors. Finally, ediEnterprise integrates directly with the Microsoft Office 2007 suite of products via several standard document templates as well as with Microsoft Exchange Server 2007 for messaging and communications integration.
Software-plus-Services Customers Consume Software Incrementally
“When the competition is tough and you have a huge installed base on a well-established application, it’s hard to move customers off their existing systems,” says White. “Software-plus-services provides a strategy to disassemble the application into its component parts and allow some of these parts to be local, hosted, or co-located somewhere else. The customer can consume the software incrementally and turn it on and off as required by the business. And we can deliver the software specifically to the needs of the markets as they change.”
Flexible Architecture Offers Correct Tool for the Job
By using the software-plus-services delivery model, CargoWise can deliver its user interface in a variety of forms making it fit for purpose for an individual customer and a particular sub-set of the industry. These include:
- A traditional Windows®-rich form environment for users who are close to their desktops and need the full range of Office products, including Microsoft spreadsheet and word processing software.
- Windows Presentation Foundation—gives the user a visually pleasing experience while retaining the ability to run both with a browser and on a Windows-based desktop.
- A Web-based interface for tracking items using Microsoft AJAX or Microsoft ASP.NET to build interactive applications that process user requests immediately.
White says that the software-plus-services model from Microsoft ensures that CargoWise can deliver on its promise of improved functionality and quality, while remaining competitively priced: “The fact that we can combine all three user interfaces is central to our software-plus-services offering. Five years ago, people wanted a Web browser–based application. Today, people want the application to be in the right place for the customer. Some things don’t work in a rich Windows forms environment—you use the correct tool for the job.”Benefits
The software-plus-services model is helping CargoWise remain a cutting-edge solution provider of freight-forwarding technology in a highly competitive global industry. Supported by this highly flexible and scalable delivery channel, the firm is offering its customers an on-demand pricing model that avoids the need for clients to make huge upfront investments in software. Already, the sales cycle has changed from between nine months and three years to just a few weeks, with the cost of a sale down from 75 per cent under the previous licensing model to 20 per cent of the income with software-plus services.
On-Demand Pricing Helps Customers Adapt to Changing Global Markets
The launch of the Microsoft software-plus-services model coincided with the move by CargoWise to offer its customers on-demand pricing. This is critical given current economic conditions where customers have far less capital requirements to deal with in using ediEnterprise.
“It just seems incredibly logical to me,” says White. “Using the software-plus-services approach has given us the ability to understand parts of the market we were not able to see before. It also delivers greater value for money to our customers. At a time when customers rarely invest in technology unless they can see the direct, short-term impact on their bottom line, this is invaluable to our business.”
Rich Client Experience Offers High Level of Performance
Zubin Appoo, Senior Manager Freight Products Team, CargoWise, says: “Using the Microsoft software-plus-services model, we’ve been able to combine more information at the client front end, offering a richer experience to customers whether they consume the application online or locally on their computer. The system is now a lot more functional and we’re able to provide a rich client experience to our customers that we never thought possible. Initially, ediEnterprise was an application you installed or was hosted and contained all the data within it. With software-plus-services, we can really integrate with some of the online freight-forwarding and supply chain expertise and bring in their real-time data to our customers’ fingertips.”
Among these extra services is a system for calculating the distance between any two addresses for pricing and rating purposes. Appoo says: “The main advantage of software-plus-services is that we can offer a client experience that is feature rich, secure, and offers high levels of performance.”
Value for Money Scaling Options for Large Enterprises
With some ediEnterprise customers having as many as 5,000 users working simultaneously on a single application, the scalability of the software using software-plus-services is a unique advantage for CargoWise. The software is already available in Chinese and German, and a French version is about to be released.
CargoWise argues that the Microsoft environment provides value for money for large customers. White adds: “These are straightforward Microsoft components that scale effectively. And they do it at a commodity price. Compared to major investments in UNIX or iSeries systems, we’re seeing perhaps a fifth of that price for similar power outcome—scalable, more economical, and very redundant component sets.”
CargoWise can also offer a more flexible, cost-effective solution to customers. Debbie Boyce, Vice President Business Development Australasia, CargoWise, says: “The customers have seen a huge benefit from the consumption-based pricing model because they now control exactly what they use and how many users there are. In certain departments they didn’t always use the full number of licences that they had for ediEnterprise. Now, with software-plus-services, they feel more in control.”
Sales Cycle Shortens From Up to Three Years to a Month
Software-plus-services has provided a boost to the CargoWise business by shortening sales cycles and increasing the return on each sale even in an economic downturn. “The licence model that we are proposing with software-plus-services is the licence model that fits this turn of events,” says White. “It’s pretty amazing to be able to win on the downswing as well as the upswing.”
CargoWise has analysed its recent sales—particularly in the U.S.—and is pleased with the results. White says: “With on-demand pricing and software-plus-services, the sales cycles are less than three months—that’s changed from nine months to three years with the previous software.”For More Information
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For more information about CargoWise edi products and services, call (61) (2) 8001 2200 or visit the Web site at: www.cargowise.com Software + Services
Software-plus-services is an industry shift driven by the fast-growing recognition that combining Internet services with client and server software can deliver exciting new opportunities. Microsoft is dedicated to helping individuals and businesses take advantage of these opportunities. By bringing together the best of both software and services, we maximize capabilities, choice, and flexibility for our customers. The broad software-plus-services approach unites multiple industry phenomena including software as a service, service-oriented development, and the Web 2.0 user experience under a common umbrella.This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
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