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Choosing Your Ideal WMS: On-Premise vs. the Cloud

Choosing Your Ideal WMS: On-Premise vs. the Cloud

The debate over whether or not to host warehouse management systems (WMS) software on-premise or to use a Cloud WMS Solution has been a topic of debate since the mid-2000’s. Even so, it remains a significant decision for businesses and calls into question what’s most important to each: flexibility, security, cost, or something else?  

In our latest QuickTake, our fulfillment and warehouse logistics specialist, Jamie Bobka, PMP, PMI-ACP, CSPO, talked through some of the primary considerations one must make when choosing the right WMS: from setup and go-live, through ongoing maintenance. 

In terms of hardware, software, and people, each stage of the WMS life cycle is different depending on whether or not you choose an on-premise or Cloud-based solution. The choice you make impacts data security, flexibility, cost, and more. 

There’s a lot of nuance when it comes to hosting a WMS solution, so for the sake of simplicity, we will differentiate between the two types of solutions as follows:

    • If a 3rd party manages the hardware that your application is hosted on, then that application is “On-Cloud.”
    • If you own, install, and manage the hardware that the application is on, then you are “On-Prem”. Note that this classification applies even if “your hardware” is licensed or rented from a Cloud Service provider; if you have to manage the environment, we’re still referring to this as “on-prem” or “on-premise.” 

With that said, let’s take a closer look at evaluating on-prem vs. on-cloud warehouse software, and how your choice could affect your high-volume DTC fulfillment success.

Setup, Go-Live, Ongoing Maintenance: On-Premise vs. Cloud WMS Solution

Setup is arguably the most crucial lifecycle stage of a WMS solution to consider, as many decisions early on have long-term consequences and costs. Knowing the full scope of commitment involved in the go-live and maintenance phases of adopting a WMS can also play a major role in clarifying which solution is best for you. 

Below, we’ve summarized the key elements to consider in adopting an on-premise WMS solution:

    • You retain control over the hardware you’re using, since you own it or are renting from a provider. This allows you to scale your technology up or down as needed. You only need to stay within the hardware recommendations of the warehouse software platform itself to be successful (ex. computers, mobile devices, and infrastructure). 
    • You have direct access to the configurations of the warehouse software. Having access to the inner workings of an on-premise WMS application allows you to tweak its code or access the database directly when changes need to be made. This can be a benefit for identifying operational issues and working out “bugs” quickly.  
    • You retain control over redundancy measures based on your risk tolerance. For example, if you’re okay with taking on more risk in exchange for lower costs, you can choose to host your data in just one physical location. If not, you can set up something more elaborate for added protection and better data security. 
    • On-premise solutions generally offer a desktop WMS application, rather than a web browser WMS application. This varies by provider, but most on-premise providers offer a desktop WMS application, which is beneficial when internet access or network access is limited. 
    • The level of control on-premise offers usually comes with increased costs for setup. Whether it’s a professional service fee or needing to add to your own staff, many on-premise providers only offer guidance or a service for Implementation Project management as an added cost. If you have the resources to manage yourself, this could be an upfront cost savings. If not, you’ll need to rely on the provider. 
    • You will need to oversee various forms of testing. When it comes to hardware, penetration security testing and load testing are time-consuming. In addition to tech stack testing, you’ll also need to consider network testing to ensure your devices and tech stack can properly communicate with each other. On-premise providers will either need to come onsite to support you (creating added expense), or don’t provide this service at all. 
    • On-premise requires more support from your end. Based on the decisions you made during Setup, you may or may not be prepared for catastrophic events, like a data breach or data loss event. Having a process and/or a tool for monitoring your hardware will need to be an additional consideration you take for managing ongoing support of the solution.
    • You may be limited in scalability without the proper support. As your operation grows, your tech stack may require you to scale up or take on new technology, which would require your technical resources to support. A less robust on-premise solution might be limited in its ability to adjust effectively. 
    • There is a lot more variability in terms of maintenance support for on-premise solutions. Some solutions will simply “hand you the keys” and need to be re-engaged as you need support from them, while others will offer an ongoing support retainer model. 

Setting up and maintaining a Cloud-hosted solution is a much different experience. In contrast to on-premise implementations and the initial setup phases, Cloud WMSsolutions put considerably less responsibility on your operation. 

Consider the following factors when exploring Cloud WMS solutions

    • You offload the hardware and software setup to the provider, since they own it. This means there is less work for you! Trusting a Cloud provider to execute a successful implementation phase is often a benefit because the provider already has the formalized process, experience, and bandwidth needed to oversee the transition. You won’t have to worry about tweaking code or your database to get started, just configurations within the Cloud provider’s app.
    • Cloud WMS solutions are usually compatible with existing devices. Because virtually every kind of on-cloud software uses a Web application, your existing computers and mobile devices are likely to be compatible with it from the get-go. 
    • Setup is usually part of the service agreement. Because the application is hosted on the Cloud provider’s infrastructure, they have full access to it, and can provide lower cost configuration services as their team does not need to be onsite for implementation. 
    • You can rest easy knowing your operational data is back up in the Cloud. It goes without saying, but reliance on the Cloud can be an operational safety net for maintaining seamless, non-stop order fulfillment. Because they are monitoring the performance and security of the infrastructure, this can be one less item on your plate. 
    • There usually isn’t much to do regarding testing before launch. While that can mean less of a time commitment on your end, if there is a hardware issue, you’re at the whim of the cloud service provider for assistance should something happen. 
    • On-cloud solutions are focused on long-term relationships and partnership. They will either have a dedicated account manager/customer success manager, and/or implementation team member familiar with your operation available for the long term. As they are generally more commercially focused on licensing fees and long-term relationships, they are generally more supportive in ongoing maintenance. 
    • You have less control over the performance of your solution. When it comes to reliable, performant hardware, you won’t always be able to control the functionality of a cloud-based WMS. If there’s a reliability or performance issue, you’ll need to work it out with your provider, and each provider will vary in responsiveness and willingness to address an issue. To that end, you’re limited to the WMS features within the platform, which makes choosing the right one even more important for more complex use cases. 

When it comes to evaluating what type of WMS solution is right for your operations, it’s critical that you consider the potential pros and cons of each phase of implementation, as well as each phase of your future operations. Both offer pathways to better fulfillment operations, but choosing wrong could jeopardize operational success, as well as customer satisfaction. 

For more insights into third party logistics and choosing the right WMS solution, download Logiwa’s “WMS Functional Requirements” guide.