Last Mile Delivery Technology: Build or Buy?

Before determining the best route for your organization’s last mile solution – whether to build or buy – let’s consider some key factors. From technical expertise to tight budgets, Katherine Lehman, director of digital marketing at Onfleet, explores what factors impact your solution the most. 

Businesses competing in today’s digital environment rely heavily on data, analytics, and technology to grow and optimize their business operations. Determining whether to create your tech or buy a mix of off-the-shelf software solutions can be difficult and daunting. Depending on your business goals, the answer may fall somewhere in the middle, combining a blend of both approaches.

For example, a company looking to implement last-mile delivery capabilities might buy a software solution to capture data and manage day-to-day delivery operations. In addition, they may choose to build a small team of analytics experts to create and refine algorithms that use the data captured in the software to address business needs for increased last-mile efficiencies.

See More: How Technology Leaders Use API and Microservices to Drive Digital Transformation

Factors to Keep in Mind in Choosing Your Last Mile Solution

There is no cut-and-dry solution for last mile delivery technology, or any technology, for that matter. However, it is safe to say that businesses that supplement existing technical resources with outsourced software save time and money versus building all solutions in-house. Before determining the best route for your organization’s last-mile solution, let’s consider some factors.

1. Technical Expertise

It takes technician and analytics expertise to create a modern delivery management platform for optimizing last-mile operations. The skill required is often beyond that of many businesses. Do you have a development team that can develop and implement advanced technical infrastructures? Do you know how to recruit good analytics talent capable of building algorithms for AI applications like machine learning?

Building in-house requires a considerable investment in personnel and resources. Another option would be to hire a contractor or agency for their technical development and analytics expertise. Still, there is no guarantee of success on their build if they haven’t worked on delivery management platforms in the past.

Unless you plan to hire employees to deploy and maintain your in-house solution, doing it yourself can be challenging and hold back your company. Businesses can yield measurable results in last-mile optimization by outsourcing last-mile delivery technology.

 modern delivery management platform

Source: Onfleet

2. Resources

Building your last-mile delivery technology can take multiple years and millions of dollars, making the in-house path an overwhelming option as the complexities and enormous financial costs can continue to mount.

By outsourcing last-mile delivery software, you can basically “plug and play” through a simple API integration that will have your last-mile experience up and running in a matter of minutes. Many software solutions have built-in partners like third-party delivery, payments, POS, and carrier tracking, eliminating the cost and time barriers of building or integrating with platforms or partners. With free trials and pay-as-you-go pricing, investing in existing software is low risk compared to the time and expense associated with building in-house.

3. Configurations

While building your solution costs more time and money in the long term, it allows for more flexibility and specific customization. Some ready-made software solutions allow for custom configurations or features, like proof of delivery, but it’s crucial to keep your business needs in mind to understand what will help you meet your specific goals.

4. System Reliability and Maintenance

Uptime, measuring a system’s reliability, is crucial when building or buying any technology. Consistent uptime allows businesses to stay efficient and control costs. Less technical interruptions in operational flow result in more business and money made.

Pre-built software already has a measurable history of uptime rates from existing users. The top contenders for last-mile software go through rigorous testing and debugging, leaving less room for error.

When building a solution, you would need to consider the time and cost it would take to support and maintain the system over time, which can add up.

5. Security

Information security has become increasingly crucial for businesses that use sensitive customer data within their operations. Hackers and cybercriminals are constantly discovering new ways to tap into company networks worldwide, leading to headlines about security breaches and customer information being exposed on the Internet.

Legitimate businesses on the cutting edge of technology adhere to increasingly strict security guidelines to protect users and clients of their software. Always understand the security risks when choosing a vendor. Make sure you have a specialized talent for building and maintaining a security infrastructure if you decide to create your software system.

6. Ability to Scale

Consumers rely more and more on last-mile delivery for its convenience and health safety benefits due to pandemic concerns. Businesses need delivery management software that can quickly scale to maintain or increase their level of performance as they are inundated with more and more consumer and operational demands. Building scalability is complex and requires the technical expertise and resources mentioned above.

Source: Onfleet

Your Build Vs. Buy Decision

It’s clear that even with access to delivery, not harnessing it most efficiently can lead to significant challenges in driving innovation. To truly reap all the benefits of delivery while also keeping up with consumer demands and staying one step ahead of the competition, the integration of last mile delivery management software is crucial.

Below is a summary of factors to consider when making your decision:

Buy last-mile delivery technology when…

    • You lack the technical and analytical expertise to build or maintain a complex technical infrastructure.
    • You are on a tight budget/timeline and need a cost-efficient tool that you can quickly deploy, or the time and cost of building outweigh the operational gains.
    • You can find a solution that allows for your specific custom configurations.

Build last-mile delivery technology when…

    • You have the technical and analytical expertise to take on the project.
    • You have less urgency to implement a solution quickly and have time to test and debug thoroughly.
    • You cannot find a solution to fit your unique requirements.
    • You have a robust IT and information security team to maintain your systems and security over time.

Do you want to be a company that takes time and money away from its core business to build a state-of-the-art last-mile delivery management system, or do you want to start competing on delivery tomorrow? It’s always wise to deep-dive into your organization’s current ecosystem and plans of expansion and growth and decide accordingly.

What are you leaning towards? Build or buy? Let us know on Facebook, Twitter, and LinkedIn.

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