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A Closeup of Descartes-The Executives’ Viewpoint

Written By: Predrag Jakovljevic
Published On: August 27 2013

In the first part of this feature series on Descartes, we discussed the vendor’s approach on simplifying global logistics. To discuss further Descartes’ ambitious value prop and current state of affairs, we recently talked to the company’s top executives.

TEC: Your sustained results appear to be at odds with those of mainstream enterprise resource planning (ERP)/supply chain management (SCM) players, especially during the toughest recession years of late. Is it that your sector is doing well overall, or that you are even better than your peers, and why?
DESCARTES: We attribute our results to a number of factors but one in particular is really in our approach to delivering value for our customers. First off, Descartes is not a traditional ERP/SCM provider—we are a technology-enabled service provider that focuses on logistics-intensive organizations. We focus on logistics problems in a pricing model that suits our customers in this economy—low capital up-front cost and fees based on savings realized. We have a customer-focused results–based methodology. This customer-focused implementation strategy enables us to provide industry best practices and standardized business processes. We work with our customers to ensure that our technology and solutions provide results and value rather than cost. 

So in essence our technology systems don’t cost—they pay. We make this world a safer and more secure place by protecting our world’s trade and cargo. And the global logistics network makes these processes the most efficient and the most effective. We take a phased implementation approach with our customers and carve out value-based metrics to validate each phase based on predefined metrics. As a result of being metrics driven and focused on results, we are delivering for our customers at an accelerated pace and we are realizing the benefit. As a technology-enabled service provider, we have accepted long ago the challenge to align our revenues with our customers’ results.

TEC: Are there any apps of yours that have been doing better than the rest, and which ones do you see as recession proof?
DESCARTES: Our solutions help organizations be more efficient and effective, and deliver cost reduction while reducing complexity. These solutions are quick to implement and therefore the payback for our customers is also fast. In this tough economic environment, organizations across our target industries are looking for ways to streamline their operations and reduce costs—and reducing fuel costs is still among the important factors for our customers.

Our strategy is to work with industry leaders to pilot new products and processes. And our strategy is working. Based on the preliminary results of these activities, we are now seeing the benefits of follow-on contracts and visibility into future revenues as long as we continue to perform. So to answer your question—we would suggest that applications that are easy and fast to implement, with lesser total cost of ownership (TCO) burden on the customer (i.e., SaaS offerings), that can be implemented in bite-size pieces and deliver value and results quickly for the customer will be the ones that are “recession proof.” The ones that deliver quick payback will in fact fund the next bite-size project, and so on.

TEC: What about the global trade management (GTM) apps in this climate?
DESCARTES: With respect to our GTM services, not that long ago, the US government passed the interim final rule for the Import Security Filing “10+2,” and we are excited about the opportunities that this has brought. Our Global Logistics Network (GLN) collects and shares information to help our community comply with 10+2. The GLN is in an ideal position to help standardize these processes, and our members are organizing working groups similar to the Automated Commercial Environment (ACE) programs introduced several years ago. We have had the community ready to go by all of the enforcement dates.

We also believe that the trend to automate trade activities will continue as governments across the world seek to secure their trade, freight, and borders. The governments are passing laws, and our customers are organizing and standardizing around the GLN. The need for these applications will not be going away—organizations around the world will continue to trade and transport freight around the world. The recent rollout of Advanced Manifest Filing initiatives in Israel and Japan confirm the worldwide trend of moving toward electronic filings and cargo prescreening initiatives.

TEC: How do you view your competitive landscape (“usual suspect” competitors), and why do you win/lose to them?
DESCARTES: We have no one competitor, per se, but rather would have competitors by industry or by function. Trying to detail each competitive segment would take some serious time. For this purpose, let’s rather say that we partner with our customers and differentiate ourselves through being as follows:

  • Customer Focused with a Results-based Methodology—Our customer-focused implementation strategy enables us to provide industry best practices and standardized business processes. The phased implementation of our customers carves out value-based metrics and validates each phase based on predefined metrics.

  • Focused on Logistics-intensive Organizations—We focus on working with companies that have complex transportation-centric operations and/or differentiate themselves through logistics.

  • Multimodal, Multiprocess, and Global—We are the only commercial logistics network with applications that manage multiple channels (air, ocean, truck, contract carrier, and private fleet) and multiple business processes through the same global network.

  • Shipment Lifecycle Management—Our goal is to allow organizations to efficiently and effectively manage the end-to-end shipment process from source to consumer with ongoing real-time visibility.

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