Last week, we talked about the many ways the improvements in efficiency brought about by your new WMS can uncover a stockpile of extra money to add to your budgets. This week we’re going to switch gears and talk about the some of the costs associated with moving to the latest WMS technology that you may not be factoring into your budget. The costs are small, especially compared to the huge monetary gains a new WMS can bring about, but they can add up quickly and should certainly be considered when you’re setting your budget.
Cloud-related Budgeting Costs
You can think of the process of purchasing a cloud-based WMS as being similar to that of buying a new car. There’s the price listed on the car, then there are additions like insurance, registration, and warranties that raise the price you end up paying. Add the gasoline, repairs, and maintenance costs incurred over time, and owning the car can be more than you originally budgeted for.
Here are some added costs for a new warehouse management system that you may not currently have included in your projected budget:
- Internet Connection — The performance of your new cloud-based WMS will be almost entirely reliant on the internet connectivity in your warehouse. In order to utilize the latest technology, your warehouse needs to be wired to handle it. You’ll need to get high-speed broadband internet to get the most out of your WMS and set up a secure network where everything can connect. You may also want to purchase another connection from a different provider as backup in case your primary connection experiences any downtime.
- Hardware — A cloud-based WMS will seamlessly integrate with all the latest technology around a warehouse to increase efficiencies and drive production to new highs. Budget for the mobile devices, voice technology, or industrial handheld scanners you’ll need to fully utilize the cloud.
- Training — You need to get your employees comfortable with the system so that they can utilize every function that will benefit your business. There will inevitably be a couple of speed bumps along the way, but the smoother you are able to make the transition through training, the less extra you’ll have to budget.
The Cloud Changes How You Budget
Moving to the cloud fundamentally changes how you budget for a warehouse management system. The lower up-front costs make the best technology more easily available to businesses of all sizes, giving small- and medium-sized businesses the chance to compete with (and even outperform) industry giants from a technological standpoint. The best of the best technology is available to you at dramatically reduced rates relative to previous business generations; you just have to take advantage of it. Now you just need to make sure you have the monthly user license fees budgeted for moving forward.
Best of all, you’re only paying for what you use with a cloud-based WMS. You can easily add or remove user licenses based on your growth or seasonal business spikes. An on-premise system can hold you back, but the cloud will never hold you back and will scale to grow with your business.
Be sure to stop by our blog again next week when we’ll delve even deeper into budgeting for a cloud-based warehouse management system with a look at how you can avoid the “fake” cloud technologies some companies push.