Rebirth of a Supply Chain Veteran – Interview with Elton Chen, Head of oTMS SaaS Service Team
With the rise of unicorn companies in the 2C logistics industry, logistics and supply chains are now buzzwords. The trillion-dollar transport market is very attractive. In particular, the 2B industries account for the bulk of the total, therefore a massive amount of capital and internet/logistics talent are pouring into the business. It makes us wonder: what kind of upheaval is being caused by the incoming wave of hot money? Who will be the next B2B logistics unicorn? How are the experienced logistics IT professionals who have been silently working behind the scenes for years responding to the gold rush?
Our guest today, Elton Chen, is the quintessential experienced logistics IT professional. Chen started learning about supply chain operations when he started working for one of the world’s 500 largest suppliers after graduation. He came into contact with leading global ERP software such as SAP and SSA. For more than a decade after that, he focused on supply chain software and IT consulting, and worked in well-known companies, including SAP, T-Systems, INFOR, and Hitachi Consulting. The rise of internet logistics prompted him to leave the traditional software industry to join the army of startups. Before joining oTMS, he was the Vice Chairman and Founder of CargoCN.
Being a part of one of the Top 500 suppliers, established software/IT consulting firms, and an internet entrepreneur, Chen has gone through an impressive list of career changes. There may be inspiration to be found in his words.
From traditional logistics IT to internet startup
Some say 2015 was the year SaaS took off. There are all kinds of reasons behind this statement. It comes down to people. There is perhaps a youthful heart in every experienced logistics IT professional. A person will experience a variety of challenges when immersed in the industry over the years. One always feels, one way or another, a little urge and determination to make things better.
Having worked with UNIX, AS/400, Linux, and Windows as well as today’s Cloud through his years in the traditional logistics IT industry, Elton, too, reached his turning point in 2015 and decided to leave the traditional software company to start working with the internet. He founded CargoCN, a SaaS platform designed for bulk cargo, with a few like-minded friends in the same year.
Speaking of the reason why he joined the army of startups, Elton commented, “In my years of working in foreign companies, I observed a lack of adequate localization in many products. A lot of R&D for international products are not carried out in China. The China market is not seen as sufficiently important, and therefore Chinese customers do not receive quick feedback. We knew what systems and solutions were needed in China’s logistics industry, but were unable to bring about changes.”
Furthermore, Elton sensed a clear decline in traditional IT project orders around 2015, which sent chills down his spine. Meanwhile, internet software was showing skyrocketing growth. “We came to realize the inevitability of a switch to the internet and the cloud. In addition, technologies such as the mobile internet, cloud computing and big data were becoming more mature and able to fuel the moving block that was TMS. The growing dominance of SaaS led to a product cost sharing model that gave us an idea. Rather than wait for internal changes in large companies, why not start to make a difference now? So we decide to start our own business.”
It is understood that CargoCN initially targeted bulk cargo because there was less competition in SaaS TMS systems. The team also started paying attention to this area at an earlier stage. It was an advantage, but turned into a development bottleneck after a while. Unlike other industries, bulk commodities enterprises (e.g. coal and steel) are often managed by truckloads, and therefore have relatively little need for enroute management and visualized management. Private bulk companies, such as many coal companies in Shanxi, are unwilling to invest in software. Such enterprises focus more on finding sufficiently low-cost transport resources and proceeding with freight matching.
The freight business in China started undergoing a transformation in September 2016. The industry moved from SaaS platforms to truckless transport management platforms with trials of shipping and logistics. Elton was involved with the restructuring of products and operation systems, and the building of teams.
However, deep down, he always believed that SaaS could be used to change the logistics industry, and while the time had not come for bulk commodities, it was possible that the time for SaaS TMS systems for other businesses had.
Faith in SaaS+ services
Speaking of his reason for joining oTMS, Elton said, “This is a place where I have the chance to finish what I wanted to do but have not done yet. ”
“oTMS entered the market in 2013 – it is a pioneer and leader. This place allows me to apply my experience in traditional software and my approach to starting a business. Compared to traditional software, oTMS’s SaaS TMS is more open, and connects multiple limitless strategic development spaces. We are a local company and are able to respond quickly to changes in market conditions and demands. At present, oTMS customers are customers with strong demands for TMS systems, which give oTMS an edge in building ecosystems.”
“What is more important is that oTMS is not confined to SaaS TMS systems. SaaS is only the foundation. A solid foundation makes it possible to construct skyscraper combinations of SaaS+ services, and subsequently a transport ecosystem encompassing oSuper, transport bidding services, and financial and insurance services. SaaS is subject to a ceiling, but the combination of data+ services can result in a much longer future.”
His entrepreneurial experience gives Elton a different mindset. He is now more willing to step out of his comfort zone and be a pioneer. Joining oTMS, to Elton, was an extension of his beliefs, and the rebirth of a supply chain veteran.
Vacancy awaited for SaaS unicorn company
Having started the SaaS business and now running the oTMS’s SaaS service team, Elton has his own opinion on B2B logistics: “In terms of the industry as a whole, there has not been a true SaaS unicorncompany in China, but there will be. There have been a huge number of logistics platform companies over the last 3 years. Although many have failed and disappeared, competition remains fierce. There will be some mergers and acquisitions in the next 2 to 5 years.”
It is inevitable that the internet will migrate to mobile devices. Mergers and acquisitions are already taking place in the global market. It will not be long before the China market catches up. When asked about the reasons, Elton said, “Many traditional software companies are undergoing transformations, but the progress is hampered by strong roots in the past. It is also impossible to change some of the older product structures. These are the companies that may adopt the SaaS model to help them complete their transformations.”
Elton has experienced first-hand the rise of SaaS and witnessed the process oTMS underwent as a pioneer, going from a struggling startup to a blooming success. “It is not easy to become a unicorn, nor is it easy to revolutionize the supply chain, but I choose to travel down the path with oTMS.” He said, “As the team leader, I will take the lead in developing better product UIs and user experiences for SaaS TMS systems. Our goal is to make the process friendlier and improve the quality of data used by our clients. It is quite a different approach to services from the SOW delivery for traditional software. oTMS is dedicated to building a data-driven ecosystem. It will not happen without proper data management. We will also optimize project implementation. The implementation cycle will be shortened significantly by installing standard online implementation tools. The service experience will be enhanced by putting customers first.”
While the interview may have drawn to a close at this point, the logistics revolution continues. Elton used his own experience to demonstrate that capital injection would not only stir up the market, but also encourage experienced logistics IT professionals to embrace technologies and follow their hearts to achieve the extraordinary.
Together We Make A Difference！