How to Make Room in your 2021 Budget for the WMS Implementation
When you begin researching Warehouse Management System (WMS) software, you are 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 2021 WMS budgeting. The benefits far outweigh the costs.
Tips on Budgeting for a WMS Implementation
If you’ve made it through this challenging year, you probably already know that your technology will be key to remaining competitive in 2021 and beyond. The right WMS can help your business manage your supply chain. Here are some tips for making your 2021 WMS Budget work that accommodates the upgrade or implementation too:
- List hardware costs – Examine what voice-picking devices, industrial handhelds and mobile units you have and what your operations will need.
- Calculate software costs – Consider the price of the software, 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. 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 percent in inventory, provide almost 100 percent inventory accuracy and reduce labor costs between 20 and 30 percent. 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.
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 always year costs the most due to startup, training and implementation expenses.
As Blue Yonder (formerly JDA RedPrairie) experts, we realize there is no one-size-fits all solution. That’s why we offer a variety of pricing models to meet the needs of your business. We can help you make 2021 WMS Budget a smoother, well-informed process.
2021 WMS Budget – 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 2021 WMS Budget doesn’t get left out of the process. Here are some tips for supporting your request to your supervisor:
Focus on Strategic Initiatives
The WMS implementation process begins and ends with C-Suite executives. Each company is different, and therefore the executive team will need to understand the pros and cons of a specific WMS decision before approving 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.
Analyze the Impact on Finance, IT and Operations; Involve Key Personnel
In seeking WMS approval, alignment with several areas of the company is an important part of the process. Operations, Finance and IT generally represent key departments and decision-makers whose opinions and understanding of workflows and processes is crucial to successful WMS implementations. After determining key personnel, research and investigate how the WMS implementation will positively impact each area of the business within each departmental context. For instance, system integration, ongoing maintenance concerns and product architecture will likely be a focus of the IT department. Operations will 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.
Align Strategy with Departmental Research and Findings
After analyzing how the system will mesh with strategic goals, build consensus through streamlining your research. Examine the process and determine when to bring identified personnel into the planning and implementation stages. Establish ongoing reporting metrics to keep key figures abreast of findings, goals and project activities. 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 clean 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.