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Warehouse Management System Total Cost of Ownership – Part 3



Warehouse Management System Total Cost of Ownership – Part 3

October 6, 2021

Warehouse Management System Total Cost of Ownership – Part 3

Understanding a warehouse management system’s total cost of ownership is an important part of the success of your project. The license itself is just the tip of the iceberg. There’s more you may or may not be aware of that sometimes gets hidden, depending on how an estimate is written. The first part in this series covered license, support, and maintenance costs, and the second covered replacements and consumables, enterprise infrastructure, facility infrastructure, and education costs. Our final part covers the costs of the implementation and integration.

Implementation and Integration Costs

One of the more obvious (yet still critical) costs of a warehouse management system is the cost to implement and integrate the WMS itself. There are many moving parts in a warehouse management system implementation and it’s important that you have enough staff with the right skills and experience to keep things on track and be successful. Warehouse management system implementation costs to consider and include in your budget will cover both the internal people dedicated to the project and external consulting help if that’s how you decide to run the implementation.

Your internal people of course have a regular day job to do during the implementation and you may need to factor in the cost of backfilling their positions/responsibilities (partially or even fully) until the implementation is complete. If you use external help, implementation costs will be affected generally in the form of labor and travel expenses.

The people on the implementation team will be one of the most important variables to your implementation success, so this is not the right place to cut costs.

It’s important to understand the difference between a fixed fee approach vs. a time and materials approach if you are using external help. Not every consulting firm quotes labor in the same way. A good way to approach the labor variable is to understand what the assumptions are in the implementation plan and if those are mutually agreed upon by you and the external firm. An example of an assumption is, “Are you required to provide the training services, or are training services included?” Sometimes a “train the trainer” type of assistance is offered – this means personnel are trained and then they turn around and train the rest of your team.

Integration comes into play when you have other systems that need to exchange or merely pass information to the warehouse management system, such as an ERP, order management system, material handling equipment, and even time clocks. Integration costs are usually one-time costs at the enterprise level unless each site has its own system and its own integration (this is possible and we’ve seen it happen). Keep in mind that even a WMS from the same provider as your ERP might not truly plug and play. Even if it is plug and play, you will still need to validate that the integration works with your configuration. Be careful to fully understand this critical variable and plan accordingly.

We hope that our three-part series has given you a good foundation for understanding the total cost of ownership for your warehouse management system.

In case you missed our earlier Total Cost of Ownership posts:

Part 1 covers licenses, support, and maintenance costs.

Part 2 covers replacements and consumables, enterprise infrastructure, facility infrastructure, and education costs.

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Jeremy Hudson

Vice President of Client Services

Jeremy’s focus is on the products and services clients need to stay competitive. Open Sky Group’s mission is to deliver technology-enabled solutions that allow our customers to achieve more while having the flexibility to adapt to change. Jeremy lives the core values and mission by bringing the best experience possible to our clients. He is an essential member of implementation teams, working alongside clients, and encouraging them to use innovation and best practices instead of customizations for success.

Jason Yantiss

Vice President of Client Services

Jason provides leadership to a variety of teams focused on implementation and integration. With 27+ years of experience holding operational and technical management roles in transportation, billing, and warehousing across a vast array of industry verticals, Jason is adept at driving multiple complex projects, understanding customer needs at all levels of the operation and providing viable solutions. Jason’s resume of 150+ implementation projects include Warehouse, Labor, Transportation, Yard Management and multiple AR/AP Freight Pay and Customer Billing systems. 

Eric McPherson

Vice President of Client Services

Mac works to oversee implementation and integration projects. A former Marine officer and military police officer, he brings over 27 years of supply chain experience, including 11 years at Blue Yonder in both delivery and service sales. Mac is a dedicated, team-oriented professional with a background in business management, professional services, customer service, and supply chain technology. His specialties include sales support, supply chain execution systems, project management, fulfillment operations, distribution operations, and GSA contracts.

Shannon Caflisch

Senior Vice President of Sales and Marketing

Shannon is responsible for the strategy and management of all sales, business development, and marketing programs. With over 25 years of sales experience and 15 years focused in the supply chain space, Shannon focuses on building strong relationships with clients and partners and strives to deliver the right software solutions to help conquer supply chain challenges. Shannon believes in learning by listening to understand clients’ goals, struggles, and what is important to their business to build lasting, successful relationships.

Alan Prillaman

Senior Vice President of Client Services

As Senior VP of Client Services, Alan oversees all consulting services and account management at Open Sky Group. Possessing over 30 years of combined industry and consulting experience, Alan leverages his unique background in IT, logistics, quality management systems, manufacturing and distribution operations, and facility and strategic account management to provide clients with creative resolutions to complex challenges. His core philosophy and passion are to deliver tangible value for and establish long-term trusted partnerships with our clients.

Mike Noble

Senior Vice President of Technology

As Senior Vice President of Technology, Mike leads Open Sky Group’s Managed Services, Software Services, Infrastructure Services, and Information Technology teams bringing 35+ years of experience in Supply Chain Execution and Information Technology. Mike and his teams ensure we maintain the highest levels of customer service in a secure and reliable environment, constantly reviewing and evaluating new technologies, their appropriateness and applicability so we can safely and securely transact our own business – and help our clients accomplish the same.

Chad Kramlich


Joining Open Sky Group in 2015, Chad, served as Chief Revenue Officer for three years prior to his appointment to CEO in 2022. With over 25 years of experience delivering results for high-growth software and consulting organizations, Chad is leveraging his background in building efficient and effective implementation teams, establishing high-impact services operations, achieving revenue growth, and deepening executive-level client relations to help propel Open Sky Group into a very successful future.

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