What are the overall costs of a Warehouse Management System?

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 which you might have which aren’t directly related to the purchase will help you figure out a budget to help you plan more accurately when it comes to 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.

Image of a warehouse worker scanning into a bin

Being in the early stages of purchasing a WMS, it is imperative to determine what the key functionality and features that are required 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 which 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 which can include for example annual fees and hosting costs. Businesses can benefit with SaaS technology not just from a costing standpoint but when dealing with applications which require 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

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.

Integration Requirements

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 with implementing a WMS that staff can learn, train others and to 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.

Hosted Services

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.

Warehouse Worker on a Fork Lift

On-Premise Hardware

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.

About ProVision WMS

A product of Ahearn & Soper, ProVision WMS is an off the shelf software solution. It enables distribution centers and Third Party Logistics (3PL) companies to rapidly improve warehouse operations and meet growing demands. The software was created over a decade ago based on a .Net platform. It is easy to integrate with an Enterprise Resource Planning (ERP) System or Transportation Management System (TMS). Development and improvements to the software are ongoing with new revisions released to the customers regularly. The company is headquartered in Toronto, Ontario. For more information on our warehouse management solutions, contact us today.