WHAT DOES IT REALLY COST TO OWN A POWERFUL 3PL WMS
“Total cost of ownership” (TCO) has become a buzzword in recent years, but few firms seeking a tier-one 3rd-party WMS take the time to calculate what a WMS actually costs to implement and own over time.
Those who do invest the time are suprised to find that there are significant differences in the cost to acquire, implement and own comparably-equipped, scalable and powerful WMS solutions. The components of TCO are:
TCO starts with what you pay for software, modules and licenses. Logimax delivers as much or more capability and scalability as other tier-one WMS solutions for about 1/3 the cost.
3PLs can’t begin generating an ROI on their WMS if the software system is not live. Because Logimax’s functionality is configurable without programming, it takes significantly less time to implement than any other WMS solution.
Cost of Implementation
Another important component is the money required to implement the software. Most WMS packages have an actual software-to-services ratio between 1:2 and 1:3. This means for every dollar you spend on software, it costs an additional $2 to $3 on services to get the software running in the manner required.
Software maintenance fees are a function of the cost of price paid for software and user licenses. Software that costs 3X more will also have recurring annual maintenance costs that are 3X more than that of Logimax.
If a WMS solution is supposed to be designed for 3PLs, what percentage of your customers’ unique functional requirements should the software meet without the need for custom programming? None? 20%? 35%? 50%? 65%? 80%? More? With Logimax, most customers are able to meet 85% or more of their needs without modifications.
All too often, upgrades require a new implementation because hard-coded modifications do not migrate. That adds significantly to your our TCO. In effect, our competitors force their customers pay for their implementations and modifications over and over.
Daily Task Performance
A significant component of TCO that most people neglect to take into account is the time it takes to perform standard, daily tasks. For example, can you set up a new customer in about 15 minutes, or does it take most of a day? To add or change a new item/SKU, does it take 5 minutes or an hour? While the time it takes to actually use a WMS is often transparent during the sales process, it is a very real and significant cost of ownership.
When you compare WMS solutions for public warehouses, be sure to consider the true cost of solution ownership.