Not all WMS solutions are created equal – but how much does a cloud WMS cost ?
Are you in the process of evaluating a cloud-based ERP solution and need a warehouse management system to fill the gaps? A WMS connects to your ERP; it stores all the details about your inventory from receiving to shipping. Implementing a WMS can help you keep better track of your inventory and improve many business metrics, but what does a cloud WMS cost in relation to your business goals and budgets?
Researching WMS options can be difficult because pricing is not readily available, making it hard to create a budget for a new system. Many different factors can cause budgets to shift significantly. As with any big business purchase, you need to budget for an inventory management system.
Getting it right
The reality is, cloud systems have been around for many years and most of us use them daily in our personal lives trusting some of our most sensitive information to major cloud platforms without a great deal of thought or worry.
With the right cloud software & IoT solution in place, enterprises can connect all devices across a centralised cloud network, and capture and share their mission critical data through key software applications, allowing them to gain real time visibility of their operations. This enhanced business knowledge can be gained through a set of enabling technologies in the areas of asset management, cloud, mobile and Big Data.
The rise of Cloud WMS Solutions
According to Gartner, by 2020, all new software entrants and 80% of historical vendors will offer a subscription-based business model (referred to as SaaS, or Software as a Service). While there are many advantages to cloud-based WMS, we are seeing high adoption for businesses looking for a solution that can meet their needs now and scale with them as they grow. The initial cost of SaaS products is generally much lower and more flexible than an on-premises solution.
What Influences the pricing of each WMS?
- Contract Duration – Since SaaS based software is subscription based, you can choose the duration of your contract. When evaluating your options for subscription-based solutions, ask if you can lock in the rate with a multi-year deal. Signing up for 3 years? Make sure your WMS subscription is at least that long too.
- Number of Users – Most SaaS models have a per-user cost per month. This type of setup allows for businesses to scale as they grow. You only need to purchase the amount of users you need. On the other hand, the cost per user is typically higher for low user counts. When evaluating options, ask if there is a minimum number of users or if you can lock in user pricing. Have you accounted for your proposed hiring or peak seasons?
Many user subscription costs are based on concurrent users (the number of users who would be logged in scanning at one time), per user, per month.
- Functionalities – How complex is your operations? The more inventory you have, the more people touching that inventory, and higher volume of orders, the more functionality you will need.
Some WMS solutions offer bundles of functionality. Bundles offer the flexibility to bring the cost to where you are right now with the option to upgrade later as your business grows. If you are a startup a base functionality bundle will be less initial investment than a manufacturer or distributor that need advanced WMS functionality.
- Advanced Features – SaaS products typically have advanced features that you can purchase separately from the core bundle of functionality. However, these advanced modules will be a separate line item.
- Maintenance, Support & Services Fees – Once you buy a WMS, it has to be installed and configured, and your team trained on how to use it. With most WMS solutions, the installation services can be fixed fee bundle to get you up and running.
There is also usually a yearly maintenance fee for support. One critical component of maintenance is keeping the WMS compatible with the latest release of the software you buy. Since SaaS ERP software is typically hosted in the Cloud, customers are generally on the same version. With each new software release, you are pushed to the latest version
How do you know if a WMS is worth the price tag?
As you are evaluating solutions, the key principle you should keep in mind is whether the value of a WMS meets your needs and can scale and grow with your business. Before engaging in any pricing discussions, you should have a clear understanding of your:
- Current warehousing processes
- User counts
- Business metrics you’d like to improve
- Compliance requirements
- Timeline for implementation
Selecting the right warehouse management system for your business can have a significant positive impact on the bottom line so it’s important to have an idea on the above to accomplish selecting the right WMS and the specific functionality you’ll need to achieve those goals to work out how much your WMS solution will cost.
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.