As a warehousing company or a company with warehousing operations, you cannot ignore the transformation that business technology can bring. In fact, your current dependence on a WMS or Warehouse Management System is proof of just how important it is to move from manual processes and legacy systems to meet the growing needs of the market.
The market never ceases to evolve, and with the changes taking place in related industries, such as e-commerce, the need for constant adaptation becomes obvious. What we’re saying is that even your current on-premise warehouse management software isn’t going to be up to the challenge soon.
You will need better solutions to realize necessities such as cost-effectiveness, time and place utility and accuracy, to name a few, to retain your competitiveness. So, how do you do this?
Well, you need to begin considering adopting a cloud-based Warehouse Management System (WMS). If you’re skeptical, here are a few reasons to change your mind.
When you carry out a head-to-head comparison of on-premise WMS and cloud-based or SaaS WMS, the former is clearly the more expensive solution. It requires a massive upfront investment, and then, there are costs associated with maintenance and ongoing support.
Now, for many major enterprises, the cost of running on-premise WMS may not outweigh the benefit. However, for the rest, which is the vast majority, the cost matters and a cloud-based WMS reduces much of the costs that come with running an on-premise WMS.
Reduced costs aside, there are plenty of other benefits that can be realized with a cloud-based WMS. There seems to be a misconception among warehouse operators that moving to a new and improved system only costs more. This is totally wrong.
Transitioning to a versatile and best-of-breed cloud WMS allows for greatly improved warehouse performance. With a cloud WMS, you also have free upgrades as part of the package, which means your software is never outdated and you never have to deal with version lock. The onus of updating and maintaining the system falls on the shoulders of the service provider instead.
Let’s take a look at some of the key benefits:
- Rapid implementation: Cloud WMS can be implemented in a very short amount of time. Vendors take care of everything from configuration to hosting. This means that implementation takes place in weeks, rather than months or years – which is the case with on-premise WMS.
- Reduced capital expense: Cloud WMS eliminates the need for long-term licensing, specialized tools and resources to maintain the system. This, in turn, removes the need for significant capital outlays. Businesses, because of this advantage, can afford to become nimbler and ease their burdens.
- Improved scalability: Cloud WMS provides scalability in two ways. First, the program can be operated using any web-enabled computer. There is no need for hardware to be updated or changed. This also means that deployment is easier than ever and that the warehouse can be connected to the main system remotely. Secondly, additional licenses can be activated based on need and growth, which facilitates scaling as per requirements.
- Easy to use: A cloud WMS is the more practical version of a legacy WMS and therefore, very uncomplicated for the end user. With interfaces that are easy to navigate and to understand, carrying out fulfillment and picking operations becomes simpler. These operations can even be optimized.
On the contrary…
On-premise WMS, on the other hand, brings about a variety of costs that warehouses have to deal with.
To begin with, we have a licensing issue. On-premise WMS products can only be used under a one-time licensing model. This might seem practical. However, the upfront cost is immense. Then, you have additional costs to deal with, such as operational costs and maintenance costs. As a result, the TOC or Total Cost of Ownership for on-premise WMS is much higher than that of cloud WMS.
There is also the cost associated with customization to keep in mind. While cloud WMS can be deployed flexibly and customized with ease, on-premise WMS customization is a major undertaking. It cannot be done without further investment.
Additionally, on-premise WMS vendors have strict concerns regarding who can carry out the implementation of the system. They prefer only certified IT staff, which means that the warehouse has no say in who carries out the implementation. This, in turn, can delay implementation and even go against expectations.
Vendors also determine the kind of hardware one needs to use for running the on-premise WMS. The necessary hardware can be very expensive to acquire, run and maintain. The capital expenses only go up when trying to purchase such specialized hardware. Furthermore, the cost that comes with hiring special support staff for the maintenance of the hardware surfaces.
In the realm of cloud WMS, many of these concerns disappear. The cloud WMS model allows clients to pay a monthly fee, which is far more flexible. It allows the organization to buy according to need, rather than invest based on predictions.
When users can buy exactly what is necessary, scalability itself becomes much easier to achieve. Growth doesn’t have to occur with blind faith. Rather, it can be carried out on a step by step basis, depending on observed changes in demand and the need for improvement.