In this fast-evolving world interrupted by the global pandemic, the majority of individuals presently inclined more towards making online transactions and spending more time at home eventually fluctuating the way consumers spend and transact. Additionally, COVID-19 has rapidly reformed consumer behavior, remarkable in the supply chain for answering to the aggregating demands for goods and products.
With the extraordinary consumer demand, postponements of goods transportation could considerably impact the supply chain. Consequently, mainly in the supply chain and logistics, businesses must always tackle themselves while managing the good’s swift movement in and out.
To continue with the increasing and varying consumer needs, warehouses must know how to streamline critical processes, allowing them to deliver services efficiently. Especially after the global pandemic of COVID-19, the warehouse automation adoption has experienced an increment as more and more companies were obliged to take a shift toward digital technologies such as custom software development services that can assist them in meeting and managing such exceptional demands. One standard technology that helps optimize the warehousing and distribution processes is known as a Warehouse Management System (WMS).
If you’re thinking about spending on warehouse management software, you would possibly be pondering upon its costs. The warehouse management software average cost depends on a number of factors, and the pay varies based on your precise requirements. This blog will further discuss the variables and factors affecting WMS costs, as well as how to get the best deal possible within your budget and the one catering to all the specific requirements.
An Overview of the WMS
Warehouse management software helps businesses with growth and success by managing multiple warehouses in different regions globally and includes order transferring, warehouse operations streamlining, and insightful reports generating for identifying your sales trends and making accurate business decisions. However, the WMS implementation costs vary depending on the warehouse size, the operational complexity, and the specific required features and functionalities.
What is a Warehouse Management System?
A warehouse management system (WMS) comprises software and processes allowing organizations to control and direct warehouse operations from the time materials or goods enter a warehouse till they move out. The Warehouse Management System is considered vital in reforming and streamlining critical business processes amid companies ensuring that all goods, from raw materials to finished products, are transported through warehouses through an easy and efficient approach. A WMS also enables companies to have complete transparency over the whole inventory with the assurance of proper goods movement and avoiding any shipping delays or outbound transits.
WMS may either run on a company’s in-house (on-premise) servers or be held online (overcloud) by a third-party service provider. The latter adoption is progressively becoming more prevalent as the business landscape gradually shifts towards digital. A cloud-based WMS is easily scalable, permitting businesses to pay merely for the number of users and system required. Being on the cloud also unloads the IT department’s liability of managing an on-premise server, permitting them to focus on other main and critical business operations. With a cloud-based WMS operating on a software-as-a-service SaaS model, companies get up-to-date technologies access, along with providing them added dexterity and a market edge.
Reasons why companies utilize Warehouse management systems
There are numerous benefits for businesses utilizing Warehouse management systems. It automates several tasks associated with warehouse management, including inventory level tracking, optimum storage layout calculations, pick lists creation, and warehouse management software, and helps businesses significantly improve productivity and efficiency.
By decreasing errors and generating cost savings, investment in the right Warehouse management system can create healthy returns on investment (ROI) and improve customer satisfaction by enhanced accuracy and fulfillment speed. Considering the various signs might indicate that it’s time to upgrade your prevailing warehouse software.
Factors to consider while determining WMS costs
Along with a brief understanding of the Warehouse Management System (WMS), there are several factors that require consideration before continuing to obtain one. Primarily, grasping the cost of warehouse management system software includes the crucial step of knowing the WMS price variance, contingent on an organization’s size, industry, products, and specific requirements.
The following are some of the main factors that need to be considered to determine how much a WMS costs:
Number of users
One of the main factors included in determining a WMS cost is the number of users who will be using the software. Jot down how many warehouse workers or administrative staff will be utilizing the WMS, as this impacts the subscription fees. Most technology providers account for the WMS cost on the user count, as the higher the number of users, the more expensive it might be. In order to grasp an approximate figure regarding the license cost, solely multiply the base WMS subscription fee by the number of users.
Companies may also be required to feature in the hardware or device costs that include some third-party vendor’s integration providing devices such as label printers or barcodes, voice and data terminals, and so on, with added upfront costs. If an organization previously had prevailing hardware and devices, these might be recomposed with the software for expense minimization.
Products and industry
Other factors that require consideration when it comes to measuring WMS cost are the category of products a company handles or allocates along with the industry they belong to. The involvedness of a product’s storage, development, and shipping play a part in the WMS cost quotations. Furthermore, the company’s government agencies regulated products, including medicines or cosmetics, might also make WMS costs higher. These factors mark prices as the technology provider takes into account the extent and scope of the organizational processes with software support.
How much does a warehouse management software system cost?
As Software Path’s latest stats state, the average cost of a warehouse management system falls around $10,000 (£8,286) per user, which has been calculated by evaluating the budget per user across companies of different sizes within five years of period.
According to the estimation, your Warehouse management system will cost anywhere from £10,000 to £25,000, depending on the warehouse size and the requirement of mobile barcode scanning.
But it is not only the WMS cost WMS that is typically resolute by the business size but also the available features within the software.
Interestingly, the study also found that a number of companies specifically considering a cloud-based Warehouse management solution was over 90%, with small to medium-sized businesses more likely to request this hosting method.
Features Affecting the Cost of a WMS
Most WMS packages include basic features such as inventory tracking, picking and packing, shipping, and returns. For vast or growing businesses, basic WMS packages are not sufficient by not allowing for extensive functionalities.
WMS integrations might also be a significant feature for your Business where software can directly be connected to a third-party system.
The warehouse management software system cost can characteristically be affected by:
The size of your Business
Larger companies usually are more composite and include packages, ultimately increasing overall WMS costs.
The level of automation
The required level of automation will impact the warehouse management software package cost while involving automated workflow features such as ASN, on and off-hand stock locations, and default pick locations demanding a more progressive WMS package.
Several companies need some degree of customization in their WMS to cater to specific needs, driving up the cost.
Setting a budget for WMS
The right WMS for any organization will be different according to each organization’s needs, as not all the warehousing operations are the same. However, the other factors affecting the WMS costs are the features and capabilities that are included with the subscription type.
As with the other types of cloud-based software in the SaaS payment model, the price range of cloud-based WMS differs depending on the technology provider’s offerings. Base subscription costs with entry-level functionalities might range between $75 to $300 per user license on a monthly basis and about $500 or more per user for Warehouse management solutions with higher abilities and features.
The most affordable WMS by Next-Gen Custom Software Development usually contains low-scope functionalities, including inventory tracking, inbound and outbound logistics management, and order management, among other standard features. Even at the base subscription service employing standard features, the warehouse can accomplish orders easily and more competently while improving operations.
Those WMS subscription costs at the higher level, oppositely, include services that are bigger in terms of scope, which are usually more apt for enterprise companies. For instance, these services might comprise multiple warehouse inventory, palletization, and delivery, amongst other things. Additionally, WMS providers might offer add-on solution’s vast range. It consists of an organization selecting the auxiliary services that they think will fit best for their operations.
There are several variables present that come into play, which makes it more challenging to provide precise rates related to WMS cost.
Businesses are also expected to surface other expenses for the WMS, including installation and customization costs, ranging from around $10,000 for entry-level subscriptions to about $40,000 or more for WMS at the higher level. Separately, businesses might also come across additional costs regarding database relocation and other customization processes.
Once the system has been incorporated into the company’s warehouse, one must also arrange for maintenance and support costs ranging from 15% to 25% and subjecting to the subscription type. However, some SaaS models include monthly maintenance in the subscription price.
The WMS adoption does not happen instantly and involves employees expected to use the WMS ad requiring hands-on training, which might take weeks to months depending on the system’s features and capabilities extent and its warehouse uses. The technology provider might also provide such training programs and materials, which might call for additional costs.
It is crucial to note that all these implementation costs are also influenced by the warehouse’s operational complexity, making expenses higher for businesses with more elaborate processes.
Hidden costs to plan for in your budget
Be aware of the hidden costs coming with WMS that aren’t involved in the monthly subscription cost with a provider.
3-5 days of staff training must be featured in a new warehouse management system that will eventually allow for you to continue running training sessions in shifts and give teams the time to practice and retort with questions or feedback while training teams and services are accessible.
Adopting a new WMS might correspond with a growth period, so make sure about the new team member’s training budget, along with providing additional training each year for prevailing staff.
Assessing whether your prevailing equipment is appropriate for use with a new WMS. Old IT infrastructure might cause issues or not permit you to utilize your warehouse management software to its full potential. This is true specifically when it comes to old scanning and barcode equipment.
On-premise solutions can entail a full gradation of database servers, networking hardware, and the PCs administering the WMS. The higher level of expected equipment requirements depends on how new the software is.
Hosted models such as cloud-based solutions might not necessitate additional server hardware but will need at least mid-level spec computers and a reliable and fast internet connection. Huge additional costs can be sustained from backup systems that are further incrusted on top of cloud storage. Most warehouse operators would require to have a data copy to make sure operations aren’t left quarterly during a lost connection.
IT staff resource
Much like infrastructure, the additional IT staff and maintenance cost is difficult to forecast due to its main dependency on the system you are utilizing, your licensing or use scope, and your IT team’s capabilities.
IT staff will require time for maintenance and the system’s periodical upgradation, including additional business costs and consulting fees for educating the team for proper maintenance.
The important point to recall here is the new responsibilities your IT staff will have with your WMS, entailing sufficient time and resources while looking over these responsibilities.
Data storing and analyzing is essential for businesses looking to operate more efficiently. It is a huge part of several warehouse management software, from optimizing inventory and picking to choosing shipping lanes and associating shipments. However, some WMS users employ additional software or staff resources to route advanced analytics, insights, and report creation.
Typically, you will be required to increase your budget for analytics competencies, either as an addition to your WMS service or as an individual system.
Why choose Progatix for WMS software?
Progatix, when it comes to Warehouse management software, is the most adaptable planning and performance management platform for finance, sales, HR, ESG, and beyond. With Progatix, teams initiate cross-organizational plans reflecting their Business’s unique outlines so they can react rapidly to changes, plan for prospects, and discover what they did not think could be possible. Additionally, at Progatix, our WMS pricing is transparent. We don’t limit your number of users and instead offer pricing that develops with your order volume.