Deciding which warehouse management solution to use isn’t as easy as it used to be. Today, cloud-based solutions offer warehouses and fulfillment facilities a new option beyond the standard standalone WMS platform.
While standalone WMS solutions still have a role to play, the biggest debate currently being had in the warehouse management space is deciding whether to use a cloud WMS or an on-premise WMS.
In this article, we will go over the facts regarding both cloud-based and standalone SaaS deployments to help you make the best decision for yourself.
Industry Support: Best Practices
When considering standard industry practices, there are not many differences between cloud and on-premise WMS. Vendors for each kind of WMS support industry requirements to get and keep customers. That said, both cloud and on-premise WMS are responding to changes in the industry and are implementing certain updates to maintain their businesses.
Adoption of New Technology
Gates and RF tags are commonly found in today’s warehouses, so both cloud and on-premise WMS offers full support for these established technologies. However, one benefit of cloud WMS is that it is typically more responsive to newer technologies, such as IoT or support for BYOD. A tradeoff, however, is that cloud WMS requires access to your data. You want to find a balance between support and security requirements, which might require an evaluation that is vendor-specific.
Both cloud and on-premise WMS support customization. Keep in mind, however, that most SaaS deployments keep you on the same release version as others, so if you want more customization than what is available, you will need to develop a program that is compatible with your WMS.
Usually, when it comes to customization and supporting other platforms, on-premise WMS solutions are more flexible than cloud-based. Some WMS solutions even provide you with a container you can develop in, which guarantees simple integration. A tradeoff of this, however, is that development might take longer since you are working with specific equipment and systems at your location. Because of this, you might need to specifically tailor your equipment to address connection limitations.
When it comes to software upgrades, cloud WMS tends to be preferred over on-premise WMS. This is because whenever software needs to be updated, your vendor can send updates to your SaaS WMS which then gets installed automatically during hours you get to predefine.
Also, your provider can manage scalability, which eases the burden on your staff.
On the other hand, on-premise solutions have some downsides. Firstly, vendors might not consistently send updates, since receiving updates requires there to be a contract that covers the update for a period first and specifies a time in the future where you must pay for the updates. Also, you are internally responsible for any additional upgrades or updates you want to install, which means either your team or a third party will have to develop them.
A major feature of cloud systems - whether a WMS or otherwise - is to connect with as many devices as possible. Therefore, going with a cloud WMS means you won’t have to buy new hardware later if it meets initial requirements. Since cloud vendors will continue to add new support to attract new customers, you will need to stay up to date on operating systems related to your business.
On-premise WMS, on the other hand, will require you to update your hardware if you want to implement new capabilities. Since WMS is dependent directly on your hardware, you will have to purchase new hardware to get the most out of and expand your WMS. In this case, you will be upgrading hardware based on the needs and growth of your business rather than vendor support.
Here are some key things to consider regarding the price of WMS:
On-premise WMS tends to cost more upfront since it is considered an asset
A cloud-based WMS platform costs less initially but will become more expensive over time (if you stick with the same service)
There are support and maintenance costs for both. SaaS WMS usually includes these in monthly charges, while an on-premise WMS platform charges a support license which can cost up to 25% of the annual price.
At the end of the day, the best thing to do is decide what your specific needs are and how much you foresee the company will grow in the future. If you are planning to expand into new markets and regions, go with an on-premise or cloud-based WMS platform that supports that area of focus. If you plan on introducing new products into existing markets, seek out vendors that simplify the process of expanding SKUs and integrating into more warehouse locations.