What are the key advantages of Cloud Deployment?
Warehouse Management Systems were slow to the Cloud game for a variety of reasons – some legitimate, some more based on faulty perceptions. However, that dynamic is changing dramatically. Cloud-based supply chain solutions – WMS specifically – are rapidly gaining share, becoming the dominant approach and clear future paradigm.
There are a number of powerful benefits to deploying supply chain software generally, and Warehouse Management Systems specifically, in the Cloud. These include:
Lower Cost Implementations:
The more controlled environment simply allows software vendors to set-up new customers at lower costs than traditional deployments (including lower travel costs).
More Rapid Time-to-Value:
The lower implementation costs come in large part from the significantly reduced time it takes technically to set up a new solution/customer. This has the advantage of not only more consistently meeting tight implementation schedules, but also accelerating time-to-value (meaning when positive payback occurs), an increasingly important consideration in the investment decisions in many companies.
Lower Upfront Costs:
In addition to lower deployment costs, Cloud solutions are in general priced with a subscription model, rather than an (often large) upfront software license fee that is the norm in traditional deployments. This will also often speed up the payback period, eliminate or reduce the need to get a large capital investment approved, and support a more variable cost supply chain model.
Much Lower Internal IT Costs Over Time:
Requirements for in-house administration/ maintenance of the software fall dramatically with Cloud deployments, reduced by as much as 90%, as the software vendor can offer managed services to its customers. “High availability” environments are now readily available in the Cloud, critical in Warehouse Management System deployments in which not shipping generally means no invoicing.
As facilities open and close, issues with “moving” supply chain software to a new site, such as a different distribution centre, go away with Cloud deployments versus traditionally deployed software.
These benefits combine to offer a powerful advantage for WMS in the Cloud – and why a growing majority of deployments have moved to the Cloud model.
That said, it is important to remember the despite all the advantages of WMS Cloud solutions, most of the key deployment tasks (e.g., as-is/to be process development, training, change management, etc.) must all be performed regardless of how the software is to be deployed.
Based on many years of experience delivering Cloud-based supply chain software, including WMS, it is clear that there is simply a higher level of satisfaction by companies choosing Cloud deployment, driven specifically by the minimal time and effort needed to administer the software – both upfront and over time. In a period of very constrained IT resources within virtually every company, this turns out to be a very important benefit.
Understanding Cloud Options
Despite the rapid growth of supply chain technology generally and WMS specifically delivered in the Cloud, there are often still a lot of uncertainties among potential adopters. To sort out the options, the following discussion may be helpful. There are really three dimensions to consider in WMS implementation:
- Deployment Model – Will the software be deployed in the Cloud, or installed inside the four walls of the enterprise (on-premise)?
- Pricing Model – Will the software be under a traditional license (with an up-front cost and additional annual support fees), or through some type of subscription or transaction-based pricing?
- Management Mode – Will the acquiring company manage the application however it is deployed or will the software vendor do this work, under what is generally called “managed services.”
The traditional WMS software model involves an on-premise deployment with upfront license pricing and annual software maintenance fees of as much as 24% of the license costs.
Conversely, Cloud deployments are generally delivered with a subscription pricing model. In both models, license or subscription fees in the WMS market are generally based on “named users” of the system.
Other combinations are possible. For example, many software vendors will support on-premise deployment, but with subscription-based pricing. Other vendors can deliver in the Cloud but sell with upfront license pricing.
Potential WMS adopters should understand these options and be aware of which ones each WMS vendor will offer and support during their evaluation process.
In some cases, hybrid options are possible. For example, a 3PL customer might have a number of sites deployed in the Cloud, but initially has three facilities running on-premise systems due to perceived bandwidth issues. One of those three sites can later migrated seamlessly to a Cloud environment with great ease due its portability.
Finally, regardless of the deployment or pricing model, different management models should be available – with either the customer managing the WMS itself or, as is much more prevalent, relying on the vendor for those services.
Clarus WMS have observed that even when multi-tenant deployment offerings are available, nearly all companies prefer a private Cloud implementation. The deployment benefits are real. Implementation times for Cloud deployments are faster than for comparable on-premise deployments, reducing costs and accelerating time to value. Cloud also supports rapid WMS deployments if needed for a given business situation.
Internal IT resources needed for deployment and on-going system maintenance are reduced dramatically with Cloud implementations, to the point that there are almost no on-going support requirements in many cases. Along the same line, companies are pleased with how easy it is to set up test or development instances of the WMS versus the effort often seen to do so with traditional internal deployments.
We are finding customer satisfaction is simply higher with Cloud WMS deployment, as management of the system is handled by the software supplier, it dramatically reducing internal support needs and concerns. If the path is made easy and attractive, many companies are interested in moving existing on-premise WMS deployments to a Cloud-based system.
Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.