Cloud-based supply chain software is rapidly gaining share in every area of supply chain software, but the move has clearly been slow, until recently, in the area of Warehouse Management Systems (WMS).
But that has been changing for the past couple of years, and WMS in the Cloud is now reaching breakthrough status, as barriers and concerns ebb and the benefits of Cloud deployment are there for the taking.
Dongre Says... |
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| The obstacles are simply fading away, and WMS in Cloud will break though to mainstream adoption in 2017. |
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In fact, I predict 2017 will be the year of WMS in the Cloud, when the majority of new WMS implementations are Cloud-based for the first time.
As Supply Chain Digest has noted, there are a variety of reasons WMS has been late to the Cloud party:
The Largest WMS Providers were Slow to Embrace the Cloud: Because these leaders (both ERP and best-of-breed) were slow to push the Cloud for WMS - and in some cases are still reluctant to do so - it naturally slowed the development of the WMS Cloud market.
Behind this reluctance in some cases was the challenge any software company has, especially if it is a public company, in navigating the financial transition from large upfront license payments to a subscription pricing model, which can lead to big hits in the short to medium term to the bottom line.
Early Cloud-based WMS Solutions Lacked Rich Functionality: Given this scenario, a fair number of Cloud-specific WMS providers began to bring solutions to market. While without the legacy of on-premise solutions these vendors at least had a path to a financial model that worked, in many cases they were lacking in total functionality, being more appropriate for smaller DCs with less complex operational requirements.
This obviously limited their appeal to many companies.
Concerns about Performance Issues: Warehouse Management Systems are unlike any other in the supply chain, given the requirement to sync physical operations in real-time with the logical world of the software.
On top of that, many DCs use supporting technology such as wireless Radio Frequency terminals, Voice systems and of course materials handling systems such as carton sortation.
All of these sub-systems require high levels of system responsiveness and indeed, even with on-premise WMS deployments there are sometimes issues with such response times. The concerns are obviously magnified with a potential Cloud WMS deployment.
So those have been the key obstacles to WMS in the Cloud. But each of them, real and perceived, is falling away - and doing so quickly. The majority of companies that my firm, Softeon, is working with currently on WMS solutions are interested in Cloud-based WMS, including many large, tier 1 companies.
Let's look at the factors behind this transition:
First, public internet networks continue to improve, often to the point of being equal to or superior to a company's own internal networks.
What's more, dedicated, high speed "T1" connections continue to drop price, to the point that for any decent size operation looking for increased Internet connection speeds they will be a very minor cost in terms of the overall operating budget.
Second, fully functional, tier 1 WMS functionality is now available in natively Cloud-based solutions, and if done right, the WMS is the exact same whether the system is deployed in the Cloud or on-premise. This gives companies significant flexibility at first and over time.
 Third, the right approach to Cloud-based WMS deployment in terms of real-time integration with things like material handling systems and Voice at the "native" level of the equipment can make a big difference in performance, whether the WMS is on-premise or in the Cloud.
The more you abstract those integrations and move away from the native support that the equipment provider offers, as many WMS provider do, the less is the opportunity to benefit from what the equipment is capable of in terms of performance.
Fourth, if a WMS is built using advanced Service Oriented Architecture (SOA) principles, which in great summary involves creating large numbers of "components" that encapsulate specific WMS functionalities, then this offers flexibility in deploying the WMS in the Cloud to maximize performance in the areas that need very fast response times.
For example, the components that manage integration with materials handling or Voice/RF systems can be hosted at multiple levels across the network.
Those components can usually be deployed successfully in the Cloud, but if performance is a concern or there is a requirement for that component to be close to the equipment, with an SOA-based system you can localized those components, deploying them at individual DC locations. With the right architecture, those components then work seamlessly work with the main WMS components deployed in the Cloud, such that you could not tell which components have been deployed locally and which are Clloud-based.
For example, Softeon has many customers that are using our Voice software running completely in the Cloud, while some customers in Latin America - where network performance is more of an issue - choose to take the approach of a locally installed Voice component, while the rest of the WMS runs in the Cloud.
Finally, seeing is believing. Softeon has a growing number of Cloud-based WMS deployments - and successes - that should allay most if not all of the concerns discussed at the beginning of this process.
With all the advantages of Cloud WMS deployment (faster implementations, more flexibility in terms of deployment across a network over time, subscription versus upfront pricing if desired, much easier upgrades, reduce need for IT support resurces and more), it has been simply a matter of overcoming the real and perceptual barriers that made the decision to go Cloud to be difficult for some companies.
But those obstacles are simply fading away, and WMS in Cloud will break though to mainstream adoption in 2017.
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