3 Reasons to Consider Cloud-based WMS

More companies are investigating the value of software-as-a-service warehouse management systems. Here's why you should, too


Software-as-a-service (SaaS), a term first coined in 2001, has received significant attention in the last three years. SaaS is a new deployment model for enterprise software in which the software is provided to users over the Internet using computing infrastructure provided by the software company. In the SaaS model the software is typically licensed with a subscription that includes the software license, technical support, technology updates and use of the underlying computing infrastructure (hardware, operating systems and databases). A pure SaaS model also supports multi-tenancy, with all users running the same version of the software. Multi-tenant systems provide efficiencies because there is a single system to maintain for all users.

The Cloud refers to an Internet-based computing structure where computing power is made available via the Internet. The Cloud provides computing power “on demand” similar to an electrical utility. Many enterprise software applications are able to be deployed in a Cloud environment, which provides several benefits, including the ability to scale up or down the usage of the computing power required to run the software applications.

Warehouse Management in the Cloud

SaaS applications have been used extensively in customer relationship management (CRM) software. Salesforce.com was a pioneer in this area and brought significant attention to this new deployment model. The model has also extended into other parts of the enterprise like human capital management (HCM) and enterprise resource management (ERP). Traditionally SaaS applications have been deployed to users who typically do their work at a desk using a Web-browser user interface.

The traditional thinking was that SaaS was not a good solution for execution-intensive applications like warehousing and manufacturing. These systems require near real-time responses as users receive, pick and ship product. Additionally, these systems often require integration to complex material handling equipment such as conveyors, carousels and pick-to-light.

However, the traditional thinking about the use of SaaS for warehousing is changing. Through improvements in technology and prototyping of various deployment options, SaaS-based WMS is now reality. Warehouse workers are able to connect to the WMS from their mobile handheld computer using the Internet. The WMS provides them optimized work instructions to perform tasks in the distribution center. Additionally, management has visibility to inventory, work tasks and performance of workers through Web-based user interfaces that connect to the WMS over the Internet.

The SaaS option for WMS can be even more flexible when the WMS is deployed in a Cloud architecture, which provides the flexibility of SaaS with the additional flexibility of having all computing resources available on demand.

While technology advances have made Cloud WMS feasible, businesses must decide if this option makes sense for them. Here are a few reasons why a business may select a Cloud-based WMS over a traditional on-premise deployment option.

Reason 1: Shorten Time to Value

The business decision to implement a new WMS is often driven through a comprehensive business case. A WMS business case will often show tremendous benefit in terms of inventory accuracy, improved order fill rates and ability to provide customers with value-added services. The business case will also account for significant upfront costs in terms of software licenses, infrastructure build out (hardware, networking), and project implementation costs. While these business cases often show positive return on investment, the breakeven point may be years after the initial implementation begins.

A Cloud deployment option can significantly alter this business case, resulting in a payback that is much earlier. This is true for several reasons. First, Cloud deployments happen faster. There is no infrastructure that needs to be purchased and installed. The user’s IT team does not need to be trained on system administration, system back-up/recovery or upgrades. These activities are all managed by the software provider. Removing these tasks can shorten WMS implementations by one-third, according to industry estimates.

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