Not entirely sure what cloud computing is? Wondering if it is a real possibility for your business, or just a fancy new buzzword? Cloud computing for a warehouse management system (WMS), means that your WMS vendor will host the software application and hardware infrastructure for you as an on-demand, scalable and elastic service. It shifts the burden of WMS technology administration to the WMS technology experts. There is no hardware to purchase or maintain, patches and upgrades are done automatically, implementation is dramatically simplified, no capital expenditure is required and there is less risk for you. You access the WMS via a Web browser and gain the functional benefits of a new WMS without the up-front costs and IT drain.
Let’s look at cloud computing in supply chain terms – it is basically the IT equivalent of a third party logistics provider that manages physical distribution for you. Just like a 3PL supplier provides you with warehouse space, your cloud WMS provider will host your hardware and software and maintain it on your behalf. There is no capital expenditure because you are essentially renting the system. There is also less risk – implementation time is much shorter and demands on your IT staff are lessened. Plus, you can try the solution for a time and if it doesn’t turn out to be the best option for your business, you can simply walk away. That’s a fresh option that you don’t normally get with high-end software systems.
Here are four solid reasons why putting your warehouse management system in the cloud may make the most sense for your business – and how it can affect your bottom line with a faster return on investment.
1. WMS in the cloud is elastic and scalable to match your business needs
WMS in the cloud provides WMS solutions that are affordable and efficient for a variety of company sizes. Gone are the days when tier-one warehouse management systems were attainable only by blue chip organisations. With WMS in the cloud you have a subscription-based pricing model, so you only pay for what you use. The outcome is a more affordable solution with less risk for you. The cloud is elastic and scalable so you can access more power when you need it for seasonal business changes or spikes in demand.
The cloud provides “self-service” access to your WMS application, giving you increased agility to match the changing pace of your business. Research shows that the typical box for an IT server has an average CPU utilization of less than 50 percent. With traditional self-hosted systems, you have to buy the hardware based on your highest demand. With WMS in the cloud, you can seamlessly scale and accommodate spikes in demand.
2. WMS delivered via cloud can help lighten the IT load
As technological needs continue to increase, many companies are running out of IT space and power. On-premise software requires rack space, electricity, cooling, bandwidth, hardware and trained IT staff to install the systems and perform upgrades and routine maintenance. Not to mention the manpower required to become an “expert” on every technology stack and all the applications needed to run the company.
Cloud computing removes the maintenance headache of cost and labour, freeing up time for your IT staff to focus on more important issues. There is no hardware to purchase or maintain, and you are no longer required to manage hardware vendors, hardware support contracts and carry insurance on your hardware. The shared infrastructure provided by the cloud takes advantage of economies of scale, giving you better hardware utilization and resulting in more computing capacity for your infrastructure Rand.
3. Cloud WMS can be implemented faster – so you can start reaping the benefits more quickly
With cloud computing, you can have your WMS up and running much faster than with a traditional, on-premise solution. There is no lengthy and confusing installation slowing your business and taxing your resources. Rather than hard-coding customizations to your WMS, the software is configured to your needs and the software image is ready to be turned on in a fraction of the time it takes to implement a traditional on-premise WMS.
With cloud computing, you start attaining your return on investment much more rapidly. Because of the simplified implementation, and the “pay as you go” service, you can test drive the software without a major capital investment that you are tied to for five years or more. Perhaps you are intrigued by some new WMS capabilities and wonder if the new functions will bring the necessary level of return on investment for your business to make the system purchase worthwhile. Now you can try the software for a year, and then walk away if the solution isn’t the best option for you.
4. WMS in the cloud is just as secure as traditionally installed systems – maybe more so
With cloud computing, the risk and liability are managed by the service provider, and most cloud providers have security policies that are far superior to a company’s internal IT departments. The hardware and applications are hosted in a secure, state of the art data centre that is designed to ensure the privacy, integrity and availability of customer’s systems and data. Availability to your system and data are guaranteed and instantaneous as long as you have Internet access.
Data security and privacy are managed by secure data transfer protocols, which provides encryption and secure identification of the server. The protocols ensure confidentiality and integrity of data over the internet. You can even have secure collaboration with supply chain partners via interface touch-points within the WMS.
How do I determine if WMS in the cloud is right for my business?
Determining if a WMS with a cloud delivery model is right for you depends on your specific functional needs and staffing priorities. The key benefits a cloud option provides over a traditional on-site hosted solution are that you gain the new WMS capabilities you want for your business, and the solution is implemented more quickly and with less strain on your IT staff – all without the large up-front capital expense.
To analyse whether the cloud is the best option for your business, you need to calculate the cloud costs versus do-it-yourself costs by taking a good, in-depth look at your operations.
• Do you have the expertise and the extra IT staff to dedicate to implementing and maintaining a new application?
• Is your current infrastructure in need of an overhaul?
• Do you have a pressing need for the new WMS capabilities, necessitating a faster implementation?
• Include operational costs such as energy, personnel and capital costs, including servers, storage and software when comparing cloud costs to hosting the same service internally
• Have you considered the added benefit of the subscription-based pricing of the cloud option? If you are on the fence in determining the long-term payback potential, the cloud might be the way to go since you won’t have a large capital expense tying you down long-term to a specific application.
Talk over the differences and the benefits with your operations and IT to see what option is right for your business. At least it’s good to know you’ve got choices for your WMS project.
Contributed by: HighJump Software Inc & iWMS Supply Chain Software (the SA channel partner for HighJump).