Five Critical Success Factors to Consider Before Upgrading Your Warehouse Management System

Posted by Gerry Poe


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Problems Factoring Into Upgrade Decisions

There are challenges in managing the ins and outs of materials, work in process, shipping and receiving; to name a few requirements. WMS must integrate; incorporating connections to accounting and finance, management, sales and customer management, logistics, costing and scheduling systems. Companies are looking for cost-effective, ease of use, manageable enterprise software with seamless transactional integration. Additional components of a WMS system can include all material and labor (shop floor data collection (SFDC), lot and serial tracking, cycle counting, and work in process. These systems should be safe and easy to upgrade without stoppage of processes or transactions when upgrading to newer versions.

By contrast, with code-based systems, customers are spending more every few years — even when they receive free (prepaid) software upgrades under their vendor’s maintenance contract. Because the service-cost to install these upgrades and bring any customer-specific configurations and modifications forward to the latest release becomes risky, costly, and time-consuming process.

These pages will help explain why traditional upgrades can be so costly, and how WMS integrated with your ERP can empower you to break this cycle and save more than money.


The Decision to Upgrade Your WMS

To actively compete, companies need an WMS with robust, adaptable functionality to stand the test of time. WMS is often a central component of a comprehensive (larger) system supplementing warehouse management operations. Together with functionality for supply chain visibility and event management, transportation and yard management, collaborative inventory management, supplier execution enablement, data collection and RFID. Collectively, these components represent a supply chain execution (SCE) system providing competitive advantage.

If you're like most logistics or IT executives, you're probably relying on a five+-year-old WMS requiring you to pay your current provider to upgrade your system with important new features to address your specific business requirements. You may also need new supply chain execution functionality but are unable to implement it with your current WMS. Because of code-based systems uncertainties, the decision to upgrade is not easy, regardless of its necessity.

The upgrade process affects more than just your order-fulfillment operations. Long implementation periods and the re-development of custom code could create a ripple effect throughout the organization in terms of high costs, risk to core business processes and diminished efficiency.

The Underlying Problem is Custom Code

Why can such a common undertaking paralyze your operations and your profitability?

The reason: Many conventional systems contain shortcomings in their design because many changes are available only through software switches. Anything beyond the functionality offered with these switches requires custom coding, which usually doesn’t carry forward with an upgrade. This custom code is added during the original system implementation to bridge the gap between the standard product and your company’s unique needs. As further needs develop, more code is added. In some situations, this reaches an extreme where so many changes have been made any new modifications become a major undertaking, effectively reducing or even paralyzing the system’s ability for alteration. The problem with this strategy is the system may ultimately contain difficult to locate and document haphazard functionality — and might adversely impact other areas of the software application.

Continuously upgrading these models of WMS with additional code-level changes leads to a potentially disastrous spiral. For example exorbitant costs, extended timeframes, and a high level of system and operational risks. All previous code-based modifications have to be re-applied with system upgrades. For you this could mean a never-ending process resulting in loss of competitive advantage and possibly irreparable damage to key customer relationships. At some point, it could become impossible to recognize any return on investment because the upgrade process contains nothing but negative outcomes.

What You Can Expect to Gain

  • Examination the five critical factors every warehouse, logistics, IT, and supply chain professional must consider when evaluating the decision to upgrade their existing WMS.
  • Explore warehouse management and supply chain execution systems and discover how the architecture adaptability eliminates the need for custom code-based modifications and minimizes the risks associated with the typical upgrade process.
  • Consider the possible impact of these critical decision factors as you determine the best course of action for your business; whether upgrading your existing system or replacing it with a more adaptable, cost-effective solution.

One - The Cost Factor

The simple fact is many WMS systems, containing custom code, is the basis of why they are so expensive to upgrade. A full system upgrade can push your total cost of ownership (TCO) over budget — surpassing the cost of implementing an entirely new system. And worse, these upgrades perpetuate an already troublesome and expensive situation, leaving you still limited by an overburdened, malfunctioning software system.

The complexity of modifying the code means only the vendor or vendor-certified IT consultants can undertake the type of modifications you need to keep current with customer needs. Businesses often find themselves "held captive" by their vendors because they have no other means of altering the code.

This type of work typically requires three to six months in development time, which can accrue a hefty bill from your vendor for the necessary coding, testing and debugging. Much of this is due to any previous code-based changes made to tailor the system’s standard functionality to fit your particular business needs must be re-applied, re-tested and re-implemented, thus repriced.

Your customer service could also be negatively affected by diminished efficiency in the event of unexpected system downtime during the upgrade process. Ultimately, you could lose revenue with lost shipments, unmet expectations, and unhappy customers start exploring alternative distribution options. Worse yet, you haven't solved the cause of this perpetual problem.

In short, upgrading an antiquated, code-based system may keep you tied to your vendor for costly modifications.

Two - The Time Factor

Chances are; you're already short on time. With the speed of today's unpredictable business environment, you'd probably prefer to spend your day managing customer expectations instead of managing a lengthy upgrade to your WMS. Or perhaps the increasingly complex demands of your customers have compressed the time-frame in which you can implement the changes your business needs to increase efficiency and remain competitive.

Unfortunately, the complexity of modifying code-based processes not only requires you to wait until your vendor can schedule the appropriate resources to begin the project and the modifications involved will likely require several months to implement. In some cases, the upgrade process can extend over a year due to the intricacy of altering the underlying code.

Although many vendors promise short implementation times, the actual process may extend far beyond their estimates. Delays happen because business requirements are constantly changing, even while a company's system is undergoing an upgrade. Many companies find themselves in a situation where midway through the upgrade they have to make additional changes requiring the vendor to rework what has just been upgraded, further delaying the completion date. In essence, extended periods of time spent upgrading your WMS is time not spent focused on the efficient operation and continual improvement of your business.

Three - The Risk Factor

Upgrading a typical WMS can pose a variety of threats to your core business operations. Once again, the prevalence of custom coding means these types of systems are not architected to handle change. Therefore, the difficulty involved in code modifications represents a serious risk for lost data and disrupted business due to system debugging, and other testing may lead to unexpected downtime.

In addition, upgrades made to one part of the system can have unintended effects on related functions. The likelihood of this occurring increases with the volume of custom code. Moreover, the traditional upgrade process puts business operations at risk if the upgrade cannot properly support them. Equally risky is the prospect of maintaining a WMS infrastructure with limited to no support from the suppliers of related equipment and software.

Ultimately, the potential risk to customer relationships must be considered in the upgrade decision. Customers today demand short order cycles and high degrees of accuracy throughout the fulfillment process. Shipping mistakes and other customer service errors can result from glitches in the upgrade process can cost you dearly in lost customers and revenue. Ironically, the upgrade process for a code-based WMS can threaten the stability of the operations and customer service it is intended to improve.

Four - The Adaptability Factor

Current needs to adapt your WMS to the changing business environment is evidence of the fundamental importance of system adaptability. Just think of the number of changes—both planned and unplanned — which have occurred in your business over the last 12 months. Evolving markets, emerging technologies, changing customer preferences—the global economic climate advances so quickly no software provider can predict what your business will need six months or a year from now.

The problem starts here. It is a serious mistake to assume any software upgrade—no matter how comprehensive it may seem during the initial implementation—can provide all of the functionality your business will need down the road.

Adaptability of software version versus configuration is mission critical. If a system upgrade does not meeting new business requirements forces you to develop more custom code, which puts your organization at a competitive disadvantage as it diverts capital and resources away from other core business goals. As discussed in examining the cost, time and risk factors, modifying code may not be an easy or risk-free task. In the end, your company will bear unnecessary expense and jeopardize operations in meeting the changing demands of your customers.

The inherent inflexibility of code-based systems prohibits you from quickly and cost-effectively reacting as your business environment changes and makes you held hostage by developers, limitations imposed by limited user base and time to market for enhancements.

Five - The Support Factor

Whether you require vendor support for incremental changes to your WMS, a new version upgrade, or the answers to frequent questions, the level of support your vendor provides is critical to your ability to operate efficiently. Often companies decide to postpone upgrading to the latest version of their vendor’s WMS software because their previous custom changes will need to be re-applied to the new version first.

Unfortunately, these requirements essentially reduce an upgrade to the level of support they will receive. Because the vendor’s support staff is continuously trained to deal with issues pertaining to the most recent version of the software, and, therefore, becomes less knowledgeable about previous versions as time passes.

Similarly, delaying a potentially complex upgrade to your WMS can require you to maintain older versions of related infrastructure such as databases, operating systems, and other software. Again, this means support personnel trained to deal with these components, focused on providing assistance for the newest versions, not those which are several years old. In some cases, support for older infrastructure is transferred from the original provider to a third-party vendor, who can then charge a premium to support organizations electing to maintain older software and infrastructure components.

Ultimately, running on an outdated WMS might not only hinder efficient operations but could also decrease the level and quality of support you receive from your vendors.

An Alternative Approach
Adaptable, Configurable Architecture

SYSPRO has taken a different approach to the traditional obstacles presented by code-based systems. Its unique architecture separates business logic from underlying code, so the system is completely adaptable to all of your current and future requirements—and any modifications you have made are unaffected by the upgrade process. Therefore, you can make your modifications as needed—quickly, cost effectively and with little risk to operations.

• Dramatically Reduced Costs

Some companies bite the bullet and resign themselves to the belief all WMS systems, whether old or new, require the expensive and painstaking process of custom code modification every time an update is applied. While this may be true for older, proprietary systems, SYSPRO's unique architecture permits changes to be made without any custom coding. In its place, powerful configuration tools can be employed by the users themselves to accomplish "point and click" changes without requiring vendor resources. Tailoring features dramatically reduces the costs of maintaining a WMS on an ongoing basis. And, more importantly, enables companies to avoid the code modification process for future upgrades—keeping total cost of ownership low.

• Minimized Timeframes

One of the key benefits of adaptable architecture is configurations are easy to make on an ongoing basis. This solution doesn't require your operations personnel to spend their already limited time working with your vendor to apply new built-in functionality. Your operations team is empowered to make changes on an incremental basis quickly.

• Mitigated Risk

WMS, operating on adaptable infrastructure, grows with your business, mitigating many of the risks involved with typical upgrades. System downtime is minimal because upgrades get completed in hours or days. Because of ease of upgrades, your business is up and running more quickly with new functionality accurately addressing the unique needs of your business operations. Ultimately, your customer relationships can remain strong as you deliver uninterrupted service.

• Proven Adaptability

While the expense and time involved in typical upgrades make frequent changes to traditional systems prohibitive, WMS can be quickly and cost-effectively adapted as new features become available. With advanced architectures, highly flexible systems, allows implementation on an incremental basis versus waiting to do massive upgrades every few years.

• Continuous Support

Enterprise WMS customers benefit from a full-system approach supplementing software and upgrades with the availability of training, consultation, and telephone support. This support includes having the latest software version shipped/downloaded/installed directly by you, which your operations team can then perform the upgrade quickly, sometimes in less than an hour. SYSPRO’s unique architecture allows all customers to receive identical upgrade packages, which enables you to update your system’s underlying functionality without altering any of the configurations you have made.

Simplicity of upgrading means you’re always running on the latest version. Furthermore, running the most recent version enables you to stay current with new releases of related databases, operating systems, and software, which improves the level of support you receive from vendors.


• Summary

Adding functionality to ERP or upgrading existing system versions should be a matter of installation, training and implementation. Not coding, debugging and endless cycles of development and cost escalations. Santa Clarita Consultants’ approach to enterprise integration starts with getting your “big picture.” Taking your “big picture” to you for an evaluation and discussion. Decision begins a process to solve your difficulties based on your “big picture.” Not based on what you cannot do or see because of your constraints. If we started with the impossible, we end up impossibly trapped. Getting “out of the box,” to use an old metaphor, allows us to visualize and create your future-state vision. Using your new future-state vision, against a modular architecture approach, enables your systems to grow when and as you need.

ERP, enterprise resource planning, software is fundamental to our integrated modular approach. Having breadth, depth, maturity and functionality spanning many industries and specializations, you have tools, deliberately intended, to easily adopt new functions and manage your existing SYSPRO systems.

Responding to changing customer needs is a never-ending process. Many companies prefer to endure the pain of periodic system upgrades rather than implement an entirely new WMS — because of misconceptions about implementation costs, maintenance, and complexity, considering these options may not be an option. Forging ahead with upgrades without looking at other options puts your company's bottom line and competitive advantage at risk.    

 

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