• Jim Southern

Is SaaS and the Cloud Right for Logistics?



When your business is reliant on critical systems for warehouse and logistics functions, could a Cloud based SaaS solution be the weak link? Here are a few thoughts on when SaaS may not be the right solution.

Unreliable Internet access. With the Cloud model, a network failure would not only impair your order and freight management processes but also prevent you from accessing your data. If the Internet goes down, the system goes down with it. Of course, on-premise systems can go down too when there are networking, electrical or hardware failures, but at least these are within your control and not your service provider.

Slower Speeds. In general Cloud solutions will run at a slower speed than an on-premise system. Consider where the warehouse worker needs a sub-second response on their handheld device to complete a particular process, e.g. order picking. Frustration will soon set in if fluctuations in your connection speed vary.

A Loss of Control. On-premise systems give you as a business a high degree of control. When you use a hosted or Saas service you turn much of that control over to a third party provider. If you are not comfortable with this then perhaps the Cloud is not for you.

Because SaaS and Cloud based systems are typically designed to serve numerous warehouses from a single, centralised “code base,” there have traditionally been fewer options for complex customisation. It's "one size fits all" with little room for customisation to match specific processes.Flexibility & Customisation.

Sensitive data. Many warehouses deal with sensitive information, whether customer or product-related. Subsequently, these businesses are often wary of entrusting this information to third parties. Again, its a question of ownership and control. Your data is off-site with the obvious questions of security being raised.

Fewer vendors and less choice. While there are hundreds of warehouse management systems, not all of them offer SaaS. Many of the leading speciality WMS systems remain client/server.

Long-term pricing. While the subscription pricing model reduces up-front costs, those regular fees add up over time. In the long-run, SaaS fees will typically equal and exceed those paid for an on-premise client/server system solution. There are now also flexible finance options available for lease purchase which means you pay monthly but own the solution after say a 3 year period.

Its going to be an ongoing debate given the expansion of hosted and SaaS software. The choice is yours but do consider carefully!

#cloud #saas #logistics

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