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  September 15th, 2016 | Written by

Reducing Supply Chain Costs With The Cloud

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  • Transitioning from an on-premise WMS installation to the cloud will save the user money.
  • With SaaS, everything learned at every implementation goes directly into the standard codebase.
  • SaaS achieves economies of scale because vendors assume responsibility for software components and delivery.

The argument can probably be made for just about any enterprise software. Transitioning from an on-premise installation to the cloud will save the user money.

A recent white paper from Logfire makes that argument specifically with respect to warehouse management systems (WMS), and an added one also: that paying too much for software compromises a company’s ability to grow in other ways. Logfire, it must be noted, is a provider of software-as-a-service (SaaS) WMS solutions.

Traditional software environments are accompanied by several disadvantages, the paper notes: high annual expenditures for software maintenance; lack of responsiveness to business needs and the complexity of adding capabilities; growing labor costs associated with running data centers; disruptions to operations in the upgrade process; and data trapped in applications silos that don’t support analysis decision making.

“Businesses pour money into solving IT issues or customizing warehouse software when they should be focusing on growing their supply chain businesses,” the paper noted. “These customizations or changes still do not get their warehouse management where it needs to be and operational expenses have a way of getting out of hand or even skyrocketing. Despite the expense of on-premises warehouse management systems, very little is offered today by that software that can really differentiate a business or make it more competitive. With the growing relevance of e-commerce, companies face greater pressure to reduce costs and fulfill new paths to revenue.”

Here are few benefits of the SaaS approach to WMS that you might not know about.

SaaS WMS vendors generate and management a standard codebase. All new functionality that is created goes into a standard non-customized codebase of software and is available to every client. “Everything learned at every implementation around the world—and that benefits clients—goes directly into the standard codebase.”

Economies of scale are spread their costs over an entire customer base. That’s because vendors assume responsibility for all of a software’s various components and delivery mechanisms. Servers, backup, software, operating systems, databases, updates, migration, power and cooling, facility space, and staffing costs are, in effect, shared by all software users. Users can scale up or down depending on their needs and pay only for what they use.

SaaS WMS has built integration to ERP systems and can map data to them. “Through a SaaS solution,” the paper noted, “3PLs have the ability to manage multiple facilities from a single dashboard. A SaaS WMS should provide robust analytics and dashboards that expose standard or customer specific reports and KPI’s.”