Are you looking for a new warehouse management system software, but where do you start?
Selecting the right warehouse management system can be a challenging task. You have to determine your budget for WMS, choose the deployment method and understand your expectations from the software.
Moreover, when you have limited or no information, that’s what makes the selection process tougher and more complex. Before finalizing the WMS, you have to take note of the WMS Cost Categories along with the timeframes.
Here we have discussed the warehouse management system costs that vary as per the selection timeframes, hosting platforms and more.
The impact of your business led by the cost of a Warehouse Management System
Before you embark on your journey to purchasing a WMS, you need to understand the essential features and functions that are crucial to meet your business needs and ROI objectives.
Besides that, you need to consider the project planning, organizing and staffing, optimization requirements and pricing. Consider this baseline to find your potential WMS provider
Type of Solution
Cloud Based solution
Cloud Based Solution license on a monthly basis. It comes with different pricing tiers that are determined based on no warehouses or by no of users. Moreover, the basic monthly subscription cost would be roughly the same. It may vary in cases where the warehouse or user becomes the unit of pricing.
This means that, if you want to deploy multiple warehouses with multiple users each at once, you need to consider the per-warehouse pricing.
In the case of on-premise solutions, users are considered the primary pricing unit. Buyers often prefer the pricing range of less than $20,000 for the deployment of an on-premise system. They expect to pay between $20,000 and $100,000.
The core cost elements include:
1. WMS software licensing fees
The software licensing fee is calculated based on the total no of users across all the warehouses, modules and users per site. It is basically an upfront or ongoing charge that varies as per the subscription method of vendors.
An overview of the different approaches is as follows:
Software packages often depend on a perpetual license fee structure. It has comparatively higher upfront costs as you are buying the software out rightly. Here, your vendor will get a plethora of payments from you on the front end. You may also pay an annual maintenance fee for as long as the software is used in your business.
The entry-level WMS perpetual license starts from $2000 per facility. It also provides you with limited automation and extensive inventory support for tracking and monitoring your goods across different shipping lanes.
They are baseline models that include retail applications – that tie into the stock rooms at a few locations but don’t automate fill orders will run up to roughly $10,000.
Perpetual license (per facility)
- Entry-level functionality starts from $2500
- Mid-range functionality starts from $10,000
- Enterprise starts from $20,000
Ongoing SaaS licensing
Software as a Service licensing includes license fees, hosting costs and annual fees with regular incremental payments up to a certain period of time.
One of the significant benefits of SaaS providers is that it includes limited additional costs. And therefore, may incur an on-premise solution as it requires your vendor to manually perform an update or future customization.
SaaS (per user/month) deployment charges $100 for entry-level functionality, $300 for mid-range functionality and $500 for Enterprise.
Your initial costs will be too high if you are looking for various WMS. So in the case where your customers are shifting to an e-commerce version, don’t choose on-premise. The cost of installation and integration also offers high ticket prices because of the requirement of infrastructure.
2. Installation and customization
The cost of installation for an on-premise system is quite high. Vendors often choose to provide customization as an inclusive part of the installation package. All it demands is database verification, integration and configuration.
In the case of high-end SaaS, WMS needs to count in the setup and configuration costs. However, the cost of customization and integration fee with an initial will vary indispensably depending on your integration partners.
3. WMS Implementation Costs
The WMS implementation costs depend on the complexity of business operations, requirements of your organization, the current system, scalability, selection of modules and your material handling integration requirements.
You must look after an estimate that includes the methodology of the vendor’s project and its implementation with a baseline cost of the project. Consider these indications of WMS implementation costs -:
Business Process Requirements
- Consider the functions that your WMS must perform
- Determine the scope and objective and expected outcomes for WMS implementation
- Offer information regarding profitability and productivity, customer interfaces, the efficiency of targets and more
Specify this essential information so that it gets included in the WMS scope.
How your WMS solution can integrate with your current business solution? Determine the financial solutions of your business, existing ERP and your operational software.
Material handling equipment Integration Requirements
What types of MHE (Material Handling Equipment) and scanners are essential in your warehouse?
Skills, Delegation and availability
Know that you have the right people at the right place. Decide whether you will hire them in-house or will outsource the professionals.? It is extremely important to train, delegate and make your team proficient so it can operate the system in an efficient handover.
Testing, and go live
The success of your WMS typically depends on the involvement of your team members and their skill set. Accordingly, the projected cost for your particular implementation varies as per the skillset, current infrastructure and most importantly, your availability to test and go live.
Project Management team
A well-trained, efficient and qualified project management team is responsible for successful implementation and making it live in a meticulous way. So, determine if you have a professional and experienced project management team who can take up the task or will your hire them from your WMS vendor.
Change Management team
The change management team works hand in hand with your teammates that ensure a successful implementation even after the deployment. Because the WMS implementation costs are affection based on the interruption, resistance, and negative disruption too.
Based on the features
The Cost of Warehouse Management System Software often vary based on the features you choose that are supported in most core implementations.
- For entry-level WMS systems, some of the important features are inventory management, order fulfilling, receiving, barcode scanning, and shipping.
- For mid-level WMS systems, important features are Capacity planning, Fleet and asset management, Custom user dashboards, Real-time analytics, and Picking optimization.
- For Enterprise level, Dynamic slotting, IoT automation, Advanced analytics and forecasting, and Industry compliance support.
So typically, the more features you select, the more you will have to pay.
WMS Hardware Costs
Your deployment approach will accordingly calculate your hardware costs.
Many times, a company has existing hardware and it often tries to re-purpose it with the new WMS. If you are looking for a new hardware, you can source it from certified WMS vendors. Make sure the company offers licensing support which will lead to add on costs in detail. Other core hardware costs will include:
- RF terminals
- Voice terminals and barcode
- Label and laser printers
- Peripherals for supporting hardware
- Network costs
You are responsible for recurring hosting fees. Make sure that you have enough bandwidth to leverage a seamless and connective operation.
The Final Words
3pl warehouse management system not only digitizes your business but improves your assembling operations at the helm. Looking towards the ever-evolving technology, it is important to tangle your business operation from the monotonous spiderweb of software and hardware and try to automate all functions with the all-in-one solution providing WMS software.
PL Solutions have all solutions for your business. Right from warehouse management to automation and omnichannel order management, we can streamline seamlessly to strategize your business decisions significantly. Give us a call now to discuss the cost of a warehouse management system for your business.