Page 24 - Warehouse Annual 2022

WMS

Should a business deploy a

WMS in SaaS or licence mode?

BY BERGERON FABIEN, GENERIX GROUP

Your operation has outgrown its ERP’s inventory management capabilities. To efficiently support
activities in the warehouse, you will need to implement a warehouse management system
(WMS). But which one? And how should it be deployed? On-premises? On the cloud?

ith so many options on the market and a variety the case. Hypothetically speaking, a SaaS WMS solution
of implementation models, it can be daunting to that runs on local infrastructure could possibly be more
Wselect the WMS best adapted to your operation. expensive than a purchased WMS. However, since users
Here, we take a closer look at two deployment models, typically turn to SaaS solutions precisely to avoid on-
Software-as-a-Service (SaaS) and licence acquisition (on- premises deployments, the TCO of a SaaS WMS will
premises), and discuss some of the reasons why most always be significantly cheaper.
distribution and manufacturing operations should favour
the former over the latter. When determining the TCO of a WMS licence,
companies must consider the costs of acquiring the
SaaS vs licence for a WMS solution technology and infrastructure needed to run it. On top
When purchasing a WMS through a licence model, of the hardware, they must also think of the ongoing
licensees are, in fact, buying a product that they then maintenance costs to ensure that the solution always
own. Typically, companies obtain the rights (albeit often runs optimally. And because the WMS is implemented
limited) to the actual software and its source code through on private servers, TCO must also include the costs of a
a single, high expenditure. They must then implement the dedicated in-house IT team to develop, integrate, support
WMS on privately owned servers – either on-premises or and improve the solution.
external.
A SaaS WMS is hosted on the service provider’s servers,
Meanwhile, by subscribing to a SaaS WMS, operators which spares companies from such expenses. With SaaS,
gain access to the software and its functionalities, but do there’s no need for an expensive infrastructure upgrade or
not own the product itself. The WMS remains hosted on a specialised local IT team. The subscription fees cover
the service provider’s servers, which operators access via the use of the WMS itself as well as maintenance and
the Internet. Instead of one initial expenditure, as with the support services from the provider.
licence model, companies pay monthly or annual fees to
use the WMS and benefit from the provider’s maintenance Scalability
and support services. Since we’re on the topic of maintenance services, let’s
look at what companies can expect when the time comes
One key difference between the two models, then, to develop and update their WMS.
is that a licence buys operators a product, the WMS
itself, whereas a subscription to a SaaS WMS provides Because SaaS subscribers are paying for a service,
access to the software and to a range of adapted not a product, they do not have to wait or spend more
services. Companies that decide to purchase a licence of their precious capital to benefit from the software’s
must therefore purchase these services on top of the newest version and functionalities. The service
WMS itself. Given the high initial expenditure required to provider, in fact, has an incentive to keep developing
purchase a licence, this can have a serious impact on a its product; the better the service, the more likely
company’s financial agility. they are to retain and grow their customer base. And
since the solution is hosted on the provider’s servers,
Total cost of ownership (TCO) the implementation and integration of new modules
Some might argue that, over time, subscription fees will is typically a painless operation – at least from the
amount to a larger TCO than the licence model. This is not subscriber’s point of view.

22 Warehouse Annual 2022