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WMS Budget – Room for an Implementation?

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WMS Budget – Room for an Implementation?

April 20, 2023

How to Make Room in Your Budget for a WMS Implementation

When you begin researching Warehouse Management System (WMS) software, you’re probably running into some difficulties in the budgeting process because pricing is not always readily available. Transitioning from legacy systems presents hurdles that add to the true cost. There are ways to approach and think about your WMS budgeting and the benefits far outweigh the costs.

Tips on Budgeting for a WMS Implementation

If you’ve made it through the past few challenging years, you already know your technology will be key to remaining competitive. The right WMS can help your business manage your supply chain effectively and surpass your competitors. Here are some tips for making your WMS Budget work (you can apply this thinking to an upgrade or other supply chain solution implementation too):

  • List hardware costs – Examine what devices (voice picking, etc.), industrial handhelds, and mobile units you have and what your operations will need.
  • Calculate software costs – Consider the price of the software solution. For example, monthly subscription fees, any software support charges, and data migration fees.
  • Plan for training – An implementation will save you money and give you a competitive edge, but only if your employees know how to use the new system. Don’t be afraid to advocate for and invest in training to ensure a seamless transition.
  • Analyze potential gains – WMS spending makes sense when you consider that an implementation can save your organization between 15% and 25% in inventory, provide almost 100% inventory accuracy, and reduce labor costs between 20% and 30%. Improved customer service also creates both short- and long-term gains.

Licensing and Pricing

Most WMS systems are either under perpetual licensing or operate on a subscription model that typically has a monthly fee. Implementation and annual budgets depend on your business’ choice of deployment. SaaS or cloud will also influence this pricing.

Perpetual licenses are typically on-premise applications, while subscription models use cloud storage for some of your business’ data and processing needs. With both models, the first year always costs the most due to startup, training, and implementation expenses.

As Blue Yonder experts, we realize there are no one-size-fits-all solutions. That’s why we offer a variety of pricing models to meet the needs of your business. We can help you make your WMS budget a smoother, well-informed process.

Presenting the case for your WMS Implementation

Once you’ve calculated the costs and have a rough idea of the total, you’ve got to make the case internally. Companies differ of course, and only you know who you need to work with to ensure that your WMS budget doesn’t get overlooked.

Here are some tips for presenting your request to your supervisor:

1.  Focus on Strategic Initiatives

The WMS implementation process begins and ends with C-Suite executives. Each company is different. Generally, an executive team will want and need to understand the pros and cons of a specific WMS decision before approving the next steps. When preparing the initial high-level presentation, keep the company strategies and goals at the forefront of your approach. For example, if reducing overhead is a top-of-mind organizational concern, present how a WMS project can increase cost-effectiveness. If better customer relations are a primary focus of your company, highlight how WMS implementation can spur faster turnarounds and more efficient chains of communication. Speak to the top level first and align the specifics around these core strategies.

2.  Analyze the Impact on and Involve Key Personnel — Finance, IT, and Operations

In seeking WMS approval, aligning with several areas of the company is an important part of the process. Operations, Finance, and IT generally represent key departments. These decision-makers opinions and understanding of workflows and processes are crucial to successful WMS implementations. After determining key personnel, research and investigate how the WMS implementation will positively impact the business within each respective departmental context. For instance, system integration, ongoing maintenance concerns, and product architecture will likely be a focus of the IT department. Operations may primarily be concerned with workflow efficiency, problem-solving initiatives, and responding to demands from consumers. Number projections and system payback evaluations may be major areas for the finance department. Bounce your ideas and information off key personnel and adjust the proposed implementation process as necessary.

3.  Align Strategy with Departmental Research and Findings

After analyzing how the system will mesh with strategic goals, build consensus through streamlining your research:

  1. Examine the process and determine when to bring identified personnel into the planning and implementation stages.
  2. Establish ongoing reporting metrics to keep key figures abreast of findings, goals and project activities.
  3. Streamline the reports to address your company’s strategic goals in a holistic sense.

In an overview, for example, discuss how the WMS reduces overhead on material, staff and IT costs. Don’t get bogged down by the specifics that each department head is already familiar with. This will allow you to present a clear vision of the implementation and its alignment with core strategy to the executive team, while also addressing the details that affect the moving parts and decision-makers within the company.

Ultimately, you’ll want to display how WMS will positively affect the bottom line while boosting competitive positioning and allowing for agility and ongoing strategic alignment. With these steps completed, you’ll have a strong case to present for your WMS project.

Contact Open Sky Group today for help in budgeting and implementing your WMS.

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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

CEO

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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