As you forward that request to your IT vendor who is based in a different continent, you notice another memo from your ship planners who also need two amendments to their section of the software due a new requirement from a shipping line. You are already running out of your IT budget for the year and you know that the rest of the budget has to be used to purchase a financial solution that the port really needs. Due to a high need for hardware infrastructure, the finance software has entirely wiped out the IT budget for the whole port for the year. You also recently visited a neighbouring port and were impressed with their semi-automated gate system that reduced waiting time at the gate by 50%. You called a few vendors but none of their gate systems could link to the yard and ship planning solutions except one that cost too much because it was an overseas solution. Your yard solution vendor replies to your request with the quotation. You can’t even afford the consultancy days let alone the fact that the response also indicates that most of the changes requested couldn’t be catered for. As you ponder this dilemma, a bill arrives for the annual maintenance for some of your hardware infrastructure from yet another IT vendor.
Sound familiar?
If it does, this article aims to provide you with a different view of the requirements of a TOS in this modern day as compared to what was expected in previous times. A one-off ERP type solution covering all areas of the port (not just basic operations) from a single vendor at a monthly price (no capex investment) which includes hardware, software, maintenance, upgrades and services -sound good? A traditional look at terminal operating system software will yield a ‘feature by feature’ look at what each solution available in the market has to offer for ports of different sizes and the operational areas each solution covers. Such was a result of last month’s feature article in this esteemed publication on TOS’s, and rightly so. Apart from that, one also got to see that there exist, in this fast-growing sector of the transportation industry, multitudes of TOS software solutions to suit any size of terminal and based on any size of ‘financial capability’ a terminal has for such a solution. Benefits of TOS’s are another common denominator of such articles. From increased planning functions, increased overall efficiency for a terminal to speedier clearance of boxes from gate to yard or vice-versa, benefits are usually explained thoroughly and in detail. Benefits of each solution over another (such as better flexibility to suit operations of each terminal, more features to cover more areas of operations etc) is also another topic constantly discussed. A third common denominator of TOS studies and articles is the TCO (total cost of ownership) factor which ranks highly in a port’s decision of which TOS to implement. In this area, TCO has been looked at from multiple points of view and has had extensive debates about what should be included (software, hardware, maintenance, upgrades, downtime for implementation?, etc). If the truth be told, these factors have existed almost as long as ports and terminals have and to date, with the exception of a few enhancements and upgrades in technology, the basic facts remain the same. Although it is true, that TCO for TOS’s have significantly reduced over the years, other basic factors and benefits remain the same. And revisiting these facts merely serves to remind ports of the benefits they are enjoying or can enjoy as a result of the implementation of one of these TOS software solutions. My aim, in this short piece is to provide an alternative look at what ports are looking for today from an IT and TOS software perspective and what requirements these terminals consider would fulfill a TOS implementation from a non-conventional point of view.
Paradigm shift
There has been a paradigm shift in the belief that TOS solutions should solely RUN and PLAN the operations (yard, berth, quay side etc) of the port. Whilst this is still, and will always remain, the main function of the TOS software, requirements of a port or terminal today have skewed more and more towards that of an airport and other factors such as quick check in and self check in (gate operations), online booking of tickets (online processing of documents such as gate passes, slot booking etc) and easy online payment methods (internal management such as e-billing etc) have become a necessity which [sea-]ports all over the world have to accommodate. Hence the shift in expectation of what such a TOS software should encompass.
Diagram – Traditional TOS solution
ERP-style port operations software, covering gate, yard, berth, quay side, internal management, document processing (including EDI, UNEDIFACT container messages) and even customer-liaison and other users of the port (e.g. customs, government agencies) are now the order of the day. Another important feature of the ‘modern-day’ expectation is that any TOS system should be able to provide both container and general cargo management. Port operators are no longer looking for software with features that CAN integrate with their gate system, their finance system and their port community system but are looking for an ERP-style software that has all these functionalities inclusive. Port operators are also no longer willing to deal with multiple IT vendors for each area of software requirements to fulfill the above. Port operators today are looking for a single vendor who can provide a one-stop solution which includes, but is not limited to, a traditional type TOS functionalities. “At the outset, the Terminal Operating Systems in the market are suitable only to operate and not manage pure container terminals. And they are of very limited use for other kinds of sea-port terminals. It is better to rename them as Box Management Systems and Terminal Operating System is a misnomer. In terms of investment on information systems for container terminals too, the returns are less and the functionalities essential for managing a terminals falls far short of the requirements. The returns from huge investments in IT infrastructure could be higher if they are able to perform the role of enterprise resource planning systems comprehensively. Further, these TOS are inadequate to manage a sea-port.” JJJ internet blog, worldportsource.com
Role of IT service companies
This brings to the fore the role of IT services companies as compared to the traditional TOS vendors. Focus has now shifted to IT services companies to ‘put together’ such solutions in order to fulfill more advanced requirements for the ports. Whilst it remains the role of the traditional TOS vendors to continually upgrade and add more functionality to their solutions, only vendor independent service companies are able to piece together the jig-saw that is the overall software architecture that a port of any standard requires today. Such services companies today put forward the option of a TOS system together with multiple ancillary systems that cover all the areas mentioned above. In addition to this, these port operations ERP-type solutions also cover areas such as manpower rostering, port community systems (which include all liaison with external parties for customers including customs), all necessary pre-booking facilities and all e-documentation requirements. IT services and consultancy companies such as these have also resorted to developing some of the smaller components on their own and integrating them with a more established TOS software to provide an end-to-end solution that ports are looking for. It is thus, the onus of both traditional TOS vendors and IT consultancy and services companies to join forces globally to provide this sort of modern software requirements that ports are looking for. Another stringent requirement of ports today is localised support for all their IT software. Gone are the days where ports are willing to tolerate ‘different time-zone’, ‘different country’, ‘one-site’ support that was sufficient 10 years ago! To
day we are talking about 35-moves-per-hour ports that require quick-fix solutions to any problems they may face with their software, especially their TOS related software that operates at the heart of any port. Local or regional IT services or consultancy companies are able to provide this sort of localised and on-site support requirements, at least on a first and second level basis, which, from historical data, would solve 70% of all problems with these kind of software packages. This is another clear indication of the benefits of the current trend of services-based IT companies working together with TOS and other traditional vendors to serve a port’s end-to-end IT needs.
Price factor
And then we have the prime factor of price. From low TCO to cheap and competitive maintenance packages that include enhancements, TOS vendors have championed this to the hilt. And yet today, one of the highest IT spend of any port globally is the purchase and implementation of a TOS system, purchase of all other related or ancillary systems and the additional spend required to integrate all these solutions together. And then, of course, they have to take into account the cost of hardware infrastructure and maintenance for each solution operating independently. Some leading TOS providers believe that whether or not a customer decides to use features contained in the software should be an operational decision, not a financial one. Today, especially in these trying economic times, the flexibility of a TOS software is critical because much consideration is given to price and TCO factor. It IS a financial decision and ports are more likely to choose for a flexible software package that provides a price that will match the features used rather than a one-type pricing for all. Hence, the model that works today, fortunately or unfortunately, is one of an IT services company providing an end-to-end solution for the port at an outsourced monthly ‘rental’ rate that includes purchase price, implementation, support, maintenance and upgrades. What this means for the ports is a no capex or initial large investment, no dealing with multiple vendors and SLA-dictated services that guarantee the ports of a service level that is deemed by themselves adequate and appropriate for the port and its operations. Packages like this also benefit smaller ports who have to, more often than not, allocate their capex for port expansion, equipment spend and other related spend and thus have to settle for in-house half baked solutions that rarely, if ever, fulfill their needs completely. TOS systems and all related solutions also have to be hugely flexible in terms of packages that can be carved out based on needs of each individual port. This is usually based on size, growth potential etc. This will allow the services-based companies to better package solutions for any size ports. Features and functionalities of all port related IT software have to be flexible enough to operate independently of each other and yet be able to co-exist seamlessly, if necessary. However, a point to note in terms of packages, is although some traditional TOS vendors provide SaaS (software as a service) options, this option is not suitable for countries that have a less than stable internet infrastructure. Functionalities of a TOS is mission critical for the operations of a port, and as such connectivity factors should not be a risk.
Traditional ‘TOS’ players (with the traditional limited features) should move forward in one-of-two ways. Either find suitable IT services partners globally that can piece their traditional TOS features together with the other software requirements of the port and market it as an end-to-end solution and service or embark on a massive development programme to fulfill all the areas of software that a port today considers worthy of a complete ‘Terminal Operating System’.