To get sign off for any software solution which has a significant impact within a business will come with an overall cost. From calculating the expected ROI and knowing the total outlay to any unexpected costs you might have that aren’t directly related to the purchase will help you figure out a budget to help you plan more accurately when implementing a WMS. Discover what are the overall costs of a Warehouse Management System.
But before you start to calculate the numbers for a Warehouse Management System, it is worth looking at business and operational objectives which ideally should persuade senior management to make the investment.
Being in the early stages of purchasing a WMS, it is imperative to determine which key functionality and features quired to support the needs of the business. It is also worth thinking about team members, organization, project planning, and optimization requirements when looking for a WMS provider.
Core cost elements
Software as a Service Licensing (SaaS) – SaaS is known as a cloud-based software method that allows all users to access either an application or data within a web browser with a secure internet connection. This service is usually hosted by a third-party provider which maintains databases, servers, and code. This service normally involves regular monthly payments over a period, including annual fees and hosting costs. Businesses can benefit from SaaS technology from a costing standpoint and when dealing with applications requiring web and mobile access to carry out specific tasks.
Upfront Licensing – Normally businesses will pay a license fee which is based on the multiple of users which are required to run the WMS. With this you tend to pay an annual maintenance fee for the duration of when the software is used within the business. It is worth noting that On-premise systems tend to have higher installation costs.
Implementation costs can be varied based on the businesses requirements, the current system and complexity with the business.
Business Process Requirements
The main question is what the main functions are required for the WMS, and the key objectives with the implementation of the WMS. Providing key information about efficiently, productivity and profitability, so that these objectives can be included within the scope of the WMS project.
How will the WMS integrate with the current workplace solution? It might be worth considering your existing ERP, operational software, and your businesses financial solutions.
Internal Skillset and Availability
Within your business do you have the right staff? You will need to ensure that by implementing a WMS staff can learn, train others, and operate the system within the handover process.
Testing and training
Testing and training will be based on projected costs regarding the specific implementation and based on internal skills within the workforce, current infrastructure and availability regarding development and implementation of the WMS project.
WMS Hardware costs
Your implementation approach will determine the bulk of the hardware costs.
You will have a responsibility to pay recurring hosting fees and ensure that you have enough bandwidth to ensure seamless operations. Other costs to put into consideration include label printers, RF devices and network costs.
As a business, you will be required to accommodate for all server and infrastructure which is currently involved with your WMS.
Out of scope costs
Out-of-scope costs can be affected by many external factors but can also be mitigated by making sure a through approach to your business requirements and specifics during the consultation phase.
Some of the out-of-scope costs include:
- Planning errors
- Change of scope
- Staff changes or training inconsistencies
- Other use of software integration capabilities and implementations.