On-premise vs. Cloud-based TMS? Why Cloud-based TMS Wins Every Time


With many security breaches in the supply chain industry recently, it’s important to understand what network infrastructure works best to secure your business as well as protect your customer data from beginning to end.

The on-premise versus cloud-based TMS conversation is a complicated one but there are factors that highlight the vital importance of a cloud-based TMS over an on-premise TMS.

Enhanced Data Security

Cybersecurity is on the side of a cloud-based TMS. Such network systems do much better in providing strong security for customers. For example, a TMS that’s in-house stores sensitive information, such as credit card numbers or bank information. Storing a customer’s personal identifiable information in an on-premise database is a tremendous risk that you have to be prepared to take. One data breach, one credit card number stolen, and your whole company could be gone. You have to evaluate your internal operations and personnel and ask if you have the cybersecurity infrastructure to handle such a big risk. Because the liabilities in such situations are huge.

With a cloud TMS, there is no gathering of private customer data, as such systems work with third-party companies who conduct the processing of payments, and are required to protect any and all data to the maximum level. This procedure significantly reduces security exposure as well as the cybersecurity footprint of a cloud-based TMS and minimizes the need to put the company at risk. No worrying about customer data being stolen or hackers finding vulnerabilities when no such data is recorded.

With dedicated teams working around the clock, cloud systems are always one step ahead of potential threats. They don’t utilize local networks, meaning no local connectivity of computers. It’s all protected independently in the cloud. That means if someone gains access to one component of an infrastructure, they don’t automatically gain access to the others. Whereas in a traditional on-premise environment, all of the networks and all of the computers are connected. This traditional setup makes your network infrastructure extremely vulnerable to security breaches.

A real-life example is the recent attack on a major LTL carrier. An executive with the company stated that their investments in cloud technology were able to prevent the hack from being more extensive. Outside of the supply chain industry, Caesars and MGM also experienced significant cybersecurity breaches.

Due to the sizes of those recently attacked, small and mid-size freight companies may think they’re usually overlooked when it comes to security breaches but it’s actually the opposite. Small companies are easy targets for hackers as they don’t regularly update their in-house systems. Without regular security updates, you would never know the vulnerability is there in the background, opening the door for an attack on your organization.

Disaster Recovery

What happens when the power goes out in your facility that holds your on-premise TMS? A cloud-based TMS offers disaster recovery capabilities that an on-premise TMS can only dream of. With cloud solutions, if one system goes down, the operations simply flow automatically to another environment. With multiple environments in multiple locations, these modern systems ensure continuous operation and automatic failover in case of disruptions. There won’t be any more worrying over system failures that disrupt or take down your operations for hours (or days) at a time.

With on-premise solutions, your entire system setup is in-house. You might have a secondary environment that you hope would work if the first one fails. But it’s very risky to test and verify that your back-up plan even works. Why risk your entire organization on such a setup? There is little scalability in such system operations as well. Whereas a cloud-based TMS offers dynamic environments on stand-by ready to support you if others fail. That support becomes invaluable when something unexpected happens that disrupts you from moving any freight for a period of time.

Having an ironclad network infrastructure is crucial for any business. But that is even more apparent in the supply chain industry today. Don’t become an easy target and fall victim to cybersecurity attacks. Ensure your digital protection with a cloud-based TMS that minimizes vulnerabilities and maximizes the security of your company.