As you select a new WMS for your ecommerce fulfillment operation, it becomes obvious that not all are created equal in terms of core functionality. WMS add-on modules are typically available to extend the core system with additional functions such as labor management, slotting, transportation management, automation and other system integrations, to name a few.
It’s important to not only understand the benefits add-on modules will provide but also how they affect the total cost of ownership (TCO) and ROI, how they might extend the schedule and how they may require additional IT and operations skillsets. We will identify 10 factors that will help you accurately budget and get the maximum benefits from WMS add-on modules.
We often see companies signing add-on licenses before they have a detailed understanding of the core WMS capabilities. Contracting well in advance of actually being able to implement the WMS add-on may have a major impact on the entire project from a budget and timeline perspective. Some vendors will require the optional modules on day 1; for others, the contracting should happen after core implementation.
Here are four prerequisites to getting maximum WMS benefits, from a previous post on the topic.
Before making a final decision about including the add-on in your project budget, be sure to be armed with the following considerations, addressing costs and ROI. How do they affect the project costs and ROI?
Add-on Seamless to WMS
Add-on modules developed by other vendors are not always “seamless” in terms of how they’re used vs. the core WMS functionality. By seamless we mean the alignment of function keys, devices and system logic. The add-on also may be used differently from the base system, requiring more training and possibly confusing associates. It’s important to get at a detailed level a demo that shows how the two work in conjunction.
Additional Professional Services
Who will implement the add-on systems? For example, if you decide to implement an LMS, does it require more professional services? More importantly, to gain the highest value from an add-on system, will it require new processes, disciplines and best practices for your ecommerce fulfillment operations?
Additional Staff Required
If the add-on module covers functionality that you’ve never had before, you may not necessarily have the right staffing to successfully implement and use it. If you’re analyzing productivity data and staff improvement for the first time, it probably makes sense for one person to become the subject matter expert and to do a lot of the analysis. This might require you to hire new staff or move them from another department, impacting payroll.
Change in Number of Licenses
Does the add-on module add to the number of licenses needed? Some of them use a site license, so it wouldn’t be affected. If it’s based on the number of seats, are the users managing or being managed by the add-on module already included in that count? Don’t overstate who needs access to the module
Training and Implementation Costs
How does the add-on module affect implementation and/or training time and costs? Additional modules and functionality will require more time to install and train associates. Be realistic about how much you can implement at once. Can the FC team absorb and gain productivity with both the core WMS and add-on modules?
Annual Maintenance and Support Costs
How will the add-on module affect software maintenance costs? Vendors often focus on the costs of the module without discussing maintenance and support increases. Maintenance costs are typically based on the list price plus optional modules – not the negotiated software price. If the number of users for the module is overstated, it will also add to maintenance and support costs. This is another reason for scrutinizing how many concurrent/named users are needed for the additional module.
External Data to Gain Benefits
What is needed to gain the benefit from the add-on module? One of the major external factors is the requirement of data outside the WMS. For example, an LMS could require historical production data in order to gain the productivity benefit. Typically, how long does it take to see results? Are integrations needed to get at the required data? If you need tech support from another provider or your IT team, have you determined the costs and schedule?
IT Skill Sets Necessary
If you’re considering developing integrations in-house, does IT have the programmer skillsets and availability to do so? What are the WMS integration costs? What ongoing programming efforts are required to upgrade any custom code to the core system? Can you use a vendor resource as an option?
Set a Realistic Implementation Schedule
How will add-on modules affect your go live timeline? If it’s pushed out, how does this affect the budget? Will it add more payroll and/or vendor implementation costs? If you can’t complete your tasks on schedule, the vendor may continue to invoice you for project management and/or reassign personnel. All this causes project slippage, cost overruns, a longer ROI horizon and management concerns.
Be sure to understand the modules at a detailed function level. Determine the TCO and the benefits expected. Be sure your planning and budget is realistic to deliver the benefits, on time and within budget.
Brian Barry is president of F. Curtis Barry & Company