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Should a Business Deploy a WMS in SaaS or License Mode?


Should a Business Deploy a WMS in SaaS or License Mode?

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? And how should it be deployed? On-premises? On the cloud? 

With so many options on the market and a variety of implementation models, it can be daunting to select the WMS best adapted to your operation. In what follows, we take a closer look at two deployment models, SaaS and license acquisition (on-premises), and discuss some of the reasons why most distribution and manufacturing operations should favor the former over the latter.

SaaS vs. License for a WMS Solution

When purchasing a WMS through a license model, licensees are in fact buying a product that they then own. Typically, companies obtain the rights (albeit, often limited) to the actual software and its source code through a single, high expenditure. They must then implement the WMS on privately owned servers – either on-premises or external.

Meanwhile, by subscribing to a SaaS WMS, operators gain access to the software and its functionalities, but do not own the product itself. The WMS remains hosted on the service provider’s servers, which operators access via the internet. Instead of one initial expenditure, as with the license model, companies pay monthly or annual fees to use the WMS and benefit from the provider’s maintenance and support services.

One key difference between the two models, then, is that a license buys operators a product, the WMS itself, whereas a subscription to a SaaS WMS provides access to the software and to a range of adapted services. Companies that decide to purchase a license must therefore purchase these services on top of the WMS itself. Given the high initial expenditure required to purchase a license, this can have a serious impact on a company’s financial agility.

Total Cost of Ownership (TCO)

Some might argue that, over time, subscription fees will amount to a larger TCO than the license model. This is not the case. Hypothetically speaking, a SaaS WMS solution that runs on local infrastructure could possibly be more expensive than a purchased WMS. However, since users typically turn to SaaS solutions precisely to avoid on-premises deployments, the TCO of a SaaS WMS will always be significantly cheaper. This is true, for instance, of Generix’s SOLOCHAIN WMS.

When determining the TOC of a WMS license, companies must consider the costs of acquiring the technology and infrastructure needed to run it. On top of the hardware, they must also think of the ongoing maintenance costs to ensure that the solution always runs optimally. And because the WMS is implemented on private servers, TOC must also include the costs of a dedicated inhouse IT team to develop, integrate, support, and improve the solution.

A SaaS WMS is hosted on the service provider’s servers, which spares companies from such expenses. With SaaS, there’s no need for an expensive infrastructure upgrade or a specialized local IT team. The subscription fees cover the use of the WMS itself as well as maintenance and support services from the provider.


Since we’re on the topic of maintenance services, let’s look at what companies can expect when comes time to develop and update their WMS.

Because SaaS subscribers are paying for a service, not a product, they do not have to wait or spend more of their precious capital to benefit from the software’s newest version and functionalities. The service provider in fact has an incentive to keep developing its product: the better the service, the more likely they are to retain and grow their customer base. And since the solution is hosted on the provider’s servers, the implementation and integration of new modules is typically a painless operation – at least from the subscriber’s point of view!

This is not the case under the license model. In that case, the developer’s main source of revenue comes from selling new versions of the WMS. It, therefore, makes commercial sense for them to withhold new functionalities until they can market a new, complete version of their WMS. For licensees, this means that they are at the developer’s mercy when it comes to scaling their system. It also means further implementation and integration fees, which adds to the solution’s TOC.

There’s yet another, somewhat collateral advantage to the SaaS model. With SaaS, a relationship naturally builds between subscribers and the service provider that enables a rich feedback loop. Thanks to constant retroaction from users, developers can scale the solution with modules and capabilities that are truly adapted to their client’s real requirements. This is far less likely to happen with the license model where the relationship with the vendor often ends once the terms of the contract have been met.

This last point might explain part of the success Generix has had with its SOLOCHAIN WMS/MES solution in SaaS mode. By developing their system in collaboration with users and external partners, the engineers and developers at Generix have designed the only full featured WMS/MES solution featured in Gartner’s Magic Quadrant.

System Availability

Prospective buyers sometimes worry that a SaaS WMS is more at risk of becoming unavailable, if something goes wrong, than a product that is implemented on local servers. That worry is unfounded, as a SaaS solution is often the safest option between the two models when it comes to availability.

Under a subscription model, service providers commit to an SLA where they guarantee the system’s uptime. Generix, for example, guarantees that its WMS will be up and running at its clients’ operation 99.9% of the time. If anything were to go amiss, the provider is entirely responsible for providing a solution and has every possible incentive to do so as fast as possible.
On the other hand, when something goes wrong with an on-premises or privately owned WMS, companies must scramble to find the resources to fix the issue. If their IT team is unable to solve the problem, a WMS malfunction can severely slow down, if not completely halt operations for hours as they wait for external support. And that support, of course, costs money.

The Take-Away

When Microsoft saw that Google’s Workspace, which is only available as SaaS, was gaining on its Office suite, the developer moved its solution to the web and created Office 365. Since then, Microsoft has been able to reverse the tide and solidify its share of the market.
SaaS solutions are not a fad. As we have seen, TCO, scalability, and the system’s availability make the subscription model a very attractive solution. This is especially true to SMBs and companies with limited access to capital. A SaaS WMS like SOLOCHAIN is an affordable technology solution that offers everything you need to transform operations in your warehouse.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission. 


Top Five Questions Every Tech Decision Maker Should Ask When Evaluating Major Change

Organizational changes could entail many major transformation projects related to business processes, organizational structure, culture, leadership, and technology. From a technology point of view, one can expect these changes:

-Technology upgrade: An organization decides to upgrade its technology ecosystem with best-of-breed tools for each function.

-Tool standardization: An organization sees the need to standardize its technology ecosystem by following a single-vendor strategy.

-Cloud migration: An organization decides to move to the cloud and either ‘lifts and shifts’ workloads or rearchitects the existing applications, or replaces legacy systems with modern, cloud-compatible systems.

Underlying business necessities drive technology changes

Organizations launch new technology initiatives and projects every day to enhance their performance and increase their competitive edge. By and large, these technology changes are driven by one of these three business necessities:

1. The company wants to re-imagine and redefine its customers’ experience.

2. The company seeks to re-engineer its business fluidity.

3. The company intends to reduce internal and external risks and get more control over the business.

Key success factors for a technology transformation project

Many technology changes fail because decision-makers sometimes do not thoroughly think through all the major factors that can contribute to the success and failure of the project. The five questions listed here will help decision-makers systematically look at each aspect of their decision and evaluate how ready their organization is for the project.

1. Why are you considering this change? The first and most crucial aspect required for successfully implementing any change is the underlying business objective behind the project. When asking this essential question, decision-makers should acknowledge the true motivations for their potential decision. Does this change effectively help drive real business value — either enhancing the customer experience, engineering business fluidity, or reducing risks for your organization? Reasons such as all other companies in your industry undertaking a similar project should not be the sole motivators of considering a significant technology change.

2. How can you mitigate the potential risks that might derail the project? This question will push technology decision-makers to identify early-stage warnings and possible hazards facing any project before beginning. Leadership teams would be wise to define the key performance indicators (KPIs) that should be tracked in order to determine the project’s success and establish the foreseeable roadblocks that may threaten the achievement of these KPIs. They should also ensure that the project gets tested in a real environment before being planned for global execution. Proof of Concept (POC) is the litmus test for a project’s possible outcome, and it should not be compromised or skipped. The feedback and learnings coming out of the early-stage warnings and the POC should be incorporated in the project execution plan.

3. Have you mapped the key stakeholders who will sponsor and champion the project? Decision-makers should identify the sponsors who will help drive the change. Ultimately, the enduring success of the change initiative depends on how actively the sponsors are talking about the project and the level of engagement of those championing the shared vision. Decision-makers should also identify the known detractors and have effective strategies to engage the sponsors and manage the detractors.

4. How foreign is this change to your organizational culture? If the proposed technology doesn’t fit within the existing culture, decision-makers need to be aware of this from the onset and then decide whether to move ahead with the project as a whole. If the organization is not culturally ready for this technology, people will likely reject the change.

5. Do you have the funds to support this project, even if it goes 50% over budget? Given the complexities and organizational mind-shift required for the successful implementation of foundational changes, there is typically a high chance that larger projects will run over budget. Therefore, for significant technology-change projects, the organization should be ready to accept a 50% overrun.

Beyond satisfactorily evaluating the answers to these five questions, the decision-maker should have strong sense of purpose and willingness to take on challenges and see the project through completion.

Managing a significant technology change

Continuously showing return on investment (ROI) is an essential must-have at every stage of the project to keep people engaged. Governance, tracking, and support from senior management are other crucial ingredients for managing an enterprise-level technology change. The executive leaders must become active ambassadors of the project for it to be successful. If leadership support is not visible at the grassroots level, people will not be motivated to complete the project successfully.

Finally, one of the key bedrocks of any organizational change is frequent and meaningful communication to ensure no surprises for anyone at any stage of the project’s lifespan. The mantra decision-makers should always strive to follow for any ongoing project is: “95 percent of the information needs to be communicated to 95 percent of the people, 95 percent of the time.”


Salil Godika, chief operating officer – India, Synoptek

Salil Godika is an experienced business leader with over two decades of functional experience across sales, marketing, corporate planning, product management, delivery, development and alliances. At Synoptek, Salil is a part of the core management team and oversees India operations. Reach out to Salil at