Second, the pricing model for Cloud deployments reduces upfront costs and overall risk for the buyer. WMS is typically licensed with a large, one-time upfront license fee. This puts significant risk on buyers paying for the entire lifetime use of the software before they even get to try it. Additionally, it shifts a significant cost in the business case to the earliest stage of the project, when it is not possible to receive any value from the software because the software is still months away from being installed. In contrast, a Cloud deployment option minimizes upfront investment and aligns the expense of the system to the same time period in which the user is receiving benefits from the system.
Reason 2: Get out of the IT Queue
A common challenge for many line-of-business technology buyers is the dependence on the IT organization. Operations may have a strong return on investment associated with the implementation of a WMS, they are not able to prioritize the WMS project high enough to get the scarce resources in the IT department.
Cloud-deployed WMS significantly reduces the burden on a company’s IT organization. As was mentioned above, tasks that typically would be the responsibility of the IT organization like server set-up, back-up and recovery are left to the technology provider. This approach allows the line-of-business user to re-prioritize their WMS project and remove the dependence on already constrained IT resources.
Reason 3: Leave It to the Experts
In the wake of recent economic uncertainty, many businesses are revisiting their core competencies and choosing to outsource activities that are outside of their core focus. This allows business more flexibility to increase or decrease their use of these services as business conditions change. Rarely is “WMS system administration” a core competency. Instead, WMS is an area that can be outsourced to your technology provider.
Technology providers have unique skills that have been developed over many years creating, maintaining and supporting WMS deployments. In a Cloud-based deployment model, the engineers who administer the system have immediate access to the engineers who designed and developed the system. This provides a great wealth of technology talent that specializes in the creation, deployment and support of the WMS system. Additionally, there are economies of scale benefits by having an organization support multiple customers, rather than each customer developing its own internal competencies to support the system.
The Promise of SaaS
While the reasons stated above certainly make a solid case for investigating SaaS WMS, there may be additional benefits. Commerce is increasingly becoming “frictionless.” As the flow of information between trading partners increases, both parties are able to drive down supply chain costs and improve customer service. WMS is uniquely positioned to provide detailed information to both buyer and seller about the products moving through the supply chain. As more companies move to Cloud-based WMS, opportunities increase to share even greater information. Imagine the transparency of inventory flows if both the shipper and receiver of goods are running on the same Cloud-based WMS. Real-time inventory visibility is simple and the need for complex B2B integration is minimized. And that may prove to be the true promise of SaaS WMS.