Introduction
The transport industry plays a pivotal role in moving goods to facilitate trade and satisfy the needs of customers across vast geographical areas. The history of the industry dates back to ancient times when people traded in commodities such as animal skins and tools. Technological advancement introduced new perspectives and enabled the movement of goods over longer distances within the shortest time possible. Thanks to technology, goods can now move farther and people can explore greater territories to fulfill varied needs in addition to safer and better storage of goods as they are transported. However, challenges still exist in the industry with regard to costs, government regulations, state of the economy and aligning to modern technologies. While there is a consensus among stakeholders in the transport industry that improvement in technology translates to multiple benefits, the dynamism of the industry introduces new dimensions in relation to the topic of technology. Businesses have to constantly make adjustments to their existing technologies to suit the needs of customers, hence increasing the cost of implementation of technology. Concerns about the implementation of technology and the costs involved greatly influence the decisions of business leaders in the transport industry. Hence, this paper explores the challenges that transport industry players experience in the process of implementation of technology strategy and comes up with recommendations for effectively utilizing technology in the industry.
The Role of Technology in Transport
Before embarking on the assessment of industry challenges relating to technology strategy implementation, it is vital to understand the role of technology in the modern transport industry. Undoubtedly, technology improves service delivery and enables businesses to reach new areas and acquire more customers at reduced costs. Freight and business activities rely on technology to cut down on expenses, achieve greater control of the supply chain and ease compliance processes (Rodrigue & Notteboom, 2017). The modern business environment, regardless of the size, demands an online presence to keep tabs with competitors, keep in touch with customers and launch new services and products. Business invests a substantial amount of resources in their online campaigns to the potential of these online platforms. Investment in technology enables faster movement of goods to their destinations and better communication with customers. Due to changing demands by customers, business has to deliver goods a two or three days earlier than was expected almost five years ago. While new technologies facilitate these process, it is becoming increasingly difficult for business to keep up with modern technological changes and effectively integrate them into business processes. Processes such as freight billing and supply chain activities demand a considerable amount of investment in time and resources to fully implement technological changes. Due to constantly changing technologies, business is faced with the challenge of continuously making adjustments to suit the needs of customers.
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Challenges in the Implementation of Technology Strategy
Not only the transport sector but business worldwide are undergoing a period of transformation caused by multiple factors such as globalization and introduction of transformative technologies. Trends include the development of Information Communication Technology (ICT) and integrated logistics which influence the physical flow of goods (Temjanovski, 2014). Consequently, businesses seek to develop networks that leverage these new trends and meet the needs of their customers. The transport industry is subject to competition, control, and cooperation which increase the complexities for players in the industry. Hence, businesses have to make decisions on the implementation of technology strategy while considering multiple factors.
The cost of Adopting Technology
The benefits of technology strategy implementation in transport are numerous. In a globalized business environment, it is impossible to ignore the impact of technology in the way businesses carry out their activities. Adopting technology enhances the flow of information such that it is possible to constantly communicate with customers and sort issues that may arise within the process of delivery of services. The end result of these technologies is improved efficiency in the distribution process. Despite the multiple benefits of these technologies, adoption, and implementation is a cost-demanding process that business managers have to take to keep up with competition. Components of technology such as Global Position Systems (GPS), Electronic Data Interchange (EDI) and Electronic Commerce require considerable resource input in their initial stages of implementation (Temjanovski, 2014). Although managers may shy away from these trends, it is becoming increasingly impossible to run an effective transport business without these technologies. Hence, businesses are left with the single option of minimizing the costs of adopting these technologies as opposed to running activities without them. In both the short and long term, the benefits of these trends become apparent as business is able to effectively compete in the industry.
Growth in ICT and constant improvements in the way goods are moved introduces the challenge of dynamism in technology strategy implementation. The internet, globalization and changing satellite technologies eliminate the idea of comfort zones in relation to technology. Businesses have to constantly adapt their activities, practices, and approach to issues to suit these changes. Implying that continued investment is a necessity and must be included in the business budget (Ruffin, Shehorn, & Banerjee, 2018). Failure to keep up with these transformations leads to business stagnation and eventual loss of business. The effect of this situation is that firms that undergoing financial difficulties may lack resources to fully implement technology strategy hence the increased chances of business failure. Despite the benefits of technology in the transport industry, the costs involved offer challenges that businesses have to overcome to remain afloat.
Technology Induced Competition
The formation of the global economy means that business can no longer enjoy the previous benefits of regional dominance by applying the old strategies that boosted their success. Firms have to continuously innovate to stay ahead of the competition or otherwise risk losing their existing market share. Improvements in technology results in faster movement of goods, easier communication with customers and reduced chances of errors. Castells (2014) asserted that firms now have to create enough surplus to adopt new technologies and stay ahead of the competition. The emergence of the global economy implies that firms are constantly looking for new markets to enter, hence increased competition. Hence, businesses that have the resources to fully implement technology strategies have greater chances of success due to better customer services, effective research, and reduction in operating costs. For instance, established logistics firms are likely to push smaller companies out of business by reducing their freight charges beyond the reach of these smaller companies. Hence, technological advancement may have the effect of killing competition and maintaining dominance for the established firms.
Changing Customer Demands
The rise of e-commerce has eventually caught up with the transport sector. Customers are now better informed about their needs and are certain of the willingness of firms to maintain a firm grip of their customer base in the face of competition. Through social media and other online platforms, customers are able to express their demands and businesses have to implement changes to suit these demands. Most notable is the increase in demand for address deliveries which are forcing shipping companies to consider the last mile distribution to meet these needs (Visser, Nemoto & Browne, 2014). The result is increased costs and tighter shipping schedules for the companies. Ostensibly, companies have to invest more in new technologies to meet the changing demands for their customers.
Recommendations
Technology strategy implementation offers multiple benefits to companies and customers served by these companies. Despite the high costs involved in adopting these new technologies, the overall benefits are felt in the short-term and long-term. Companies are becoming increasingly aware that they cannot effectively serve customers without adopting new technologies. Owing to the benefits of technology, firms have to treat technology strategy implementation as an investment. As a result, the gains from adopting these technologies are a return on investment.
Today’s globalized economy demands a strategic approach when interacting with customers. Due to the difference in resource access, established firms will always be at an advantageous position in relation to technology implementation. Small and medium-size firms have to apply innovative practices in their technology implementation process to effectively compete with the established firms.
As customer demands keep changing, business has to adjust their activities to suit these demands or otherwise risk being pushed out of business. Hence, transport companies have to invest in smaller fleets to carry out last mile deliveries to meet customer demands (Gevaers, Van de Voorde & Vanelslander, 2014).
Conclusion
Internet and communication technologies are transforming the way transporting companies undertake their activities. Coupled with customer demands, new technologies are an inevitable part of the current transport industry. Technology offers the benefit of faster delivery of goods and ease of communication with customers. However, the high costs of investment in these technologies in addition to the needs for continuous upgrades are a major challenge in the industry. Technology-induced competition in the face of a globalized economy has also increased the pressure on firms in the industry hence raising the stakes for technology adoption. However, the need to meet customer demands makes the implementation of technology strategy an inevitable part of the business process. Hence, companies have to overcome these challenges to compete favorably in the current economy.
References
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Castells, M. (2014). Technopoles of the world: The making of 21st century industrial complexes . Routledge.
Gevaers, R., Van de Voorde, E., & Vanelslander, T. (2014). Cost modelling and simulation of last-mile characteristics in an innovative B2C supply chain environment with implications on urban areas and cities. Procedia-Social and Behavioral Sciences , 125 , 398-411.
Rodrigue, J. P., & Notteboom, T. (2017). Re-assessing port-hinterland relationships in the context of global commodity chains. In Ports, cities, and global supply chains (pp. 67-82). Routledge.
Ruffin, R., Shehorn, M., & Banerjee, D. (2018). Are Your Distribution and Transportation Costs Out of Control? Supply Chain Management Review . Retrieved on 12 January 2019, from https://www.scmr.com/article/are_your_distribution_and_transportation_costs_out_of_control
Temjanovski, R. (2014). Challenges of information technology and supply chain management in logistic sector: with an overview of Quehenberger logistics in Macedonia.
Visser, J., Nemoto, T., & Browne, M. (2014). Home delivery and the impacts on urban freight transport: A review. Procedia-social and behavioral sciences , 125 , 15-27.
