Now that we have looked closely at the Pros and Cons of each option, it would appear that the perceived costs, along with specific business functionality, are likely to be the key factors in deciding to go with a bespoke development.
In reality, however, the costs very quickly mount up, resulting in a far larger investment than originally thought. A previous example we gave illustrated a low-end cost of a single developer, and this would obviously increase if more people are employed to complete the project in a timely fashion.
We highlighted the scenario of working to a specific business brief that ultimately leads your company down a dead-end. The worst-case scenario may be that business objectives and working practices change before the bespoke development is even complete, or as it is completed; where would that leave the business?
The truth of the matter is that a software company offers off-the-shelf packages for a reason. The product rarely becomes defunct, as the life-blood of the software house is the production of new technologies, and internally they will invest in research and development to ensure that their product(s) remains useful for clients.
A good software vendor will thoroughly analyse your current practice, and make modifications to their existing package where applicable, giving you a solution that truly fits in with your business. Added to this is the safety in the knowledge that the software system has the flexibility to adapt as your business does; again, these developments are standard for the software provider and will cause minimum trouble for you and your staff.
Of course there should be an emphasis that you must choose your vendor well, but with the right software company providing your solution you should be able to rest easy that you will ultimately get a successful result.
Following on from our last discussion regarding the Pros and Cons of Developing a product In-House, in this blog we will look at the specific positives and negatives that can be attributed to buying a solution off-the-shelf.
Pros
The first major plus point with buying an “oven-ready” package is simply the fact that it is tried and tested; you know that it works, there will be support provisions in place, and you won’t have to worry about being the first to try it out.
There is no need to “reinvent the wheel” when it comes to these things, there are already specialised software systems that have already been designed to cater for the problems that you are looking to address.
Before you purchase, as with the first point, it is already in place elsewhere so you will be able to go and view the system in operation in a similar working environment.
The provider of the package, the software house, will very probably bring considerable experience with them that you can then rely on
You can’t take forever to put systems in place, and the implementation time will be shorter when buying off-the-shelf, measured in weeks rather than months, or even years.
Cons
In terms of what you require and what you will get, it is possible that the package could be bloated with unnecessary features (although could they be necessary in future?), yet may fall short in some critical areas.
There is a risk of the vendor being slow to react to market trends or reluctant to adapt the software to your particular needs.
If you have other systems in place there may be potential integration issues with the new software.
Support and Maintenance costs can be expensive (although you will also have to support and maintain when developing in-house).
Finally, when purchasing from an external provider you are putting a lot of faith in that one company. Some may say that this is a case of putting all your eggs in one basket, while others may tell you to just make sure they are deserving of that confidence you are showing in them.
While these are definitely examples of problems you may experience with some off-the-shelf systems, we should say we don’t believe they can be associated with our own products. We may well be biased, but our years of experience in the industry have ensured that we do tend to know what our customers are looking for.
In the previous blog we discussed the development of Warehouse and Transport Management Systems, and started to make comparisons between developing in-house or buying off-the-shelf. Following on from that we can now look at the pros and cons of keeping your development work internal.
Pros
As mentioned previously, there can sometimes be the view that an IT department is an expensive fixed cost, and that by keeping development within the company this will give the IT team “something to do”. Depending on the company, there may indeed be an element of truth to this idea.
The development costs are perceived as being cheaper, as there should be less money being drawn out of the company account.
One major plus point for many is that they will have “total control” and not be influenced by a software house, or other third parties.
Where development is of strategic importance, having “full” control may be vital.
The client can define and should get exactly what they require.
The software should be built to fit in with existing in-house systems.
The interface should be familiar, although that is not our general experience.
Cons
Spending valuable money on developing a system from scratch is almost like “reinventing the wheel”.
Clearly defining the project and specifications is an involving task. Both operational and technical staff will need to be involved, using up valuable hours – this is not only an IT department job!
Tight deadlines and time constraints could mean that time is not on your side.
How “right first time” do you need it to be? The reality is that complex projects can take twice as long and end up costing several times more than the original budget!
Your IT team might not have the specific skill set required for certain areas of the development.
If you bring in outside specialists, they might not have relevant warehouse experience or, in the worst case, be working to their own agenda.
Debugging issues can be prolonged.
Developers can turn into an in-house technocracy with whom managers may find it difficult to argue.
The programmers are not likely to have learned lessons from others’ mistakes or benefit from others’ good ideas.
The system may have little inherent flexibility and scalability.
The process can drive a company further down a unique, or dead-end, development branch and into dependency on a particular developer, or development team.
Modular upgrades are unlikely to be available.
There is an over-reliance on one department to produce the goods.
Finally, a major question that you have to ask about in-house development will be “is it actually cheaper?”. Let’s assume there is a £40,000 yearly cost for employing a single developer, so you will pay £200,000 over, say, a five-year product life. For that same £200,000, assuming 20% per annum support and licence charges, you could buy and maintain a £66,000 software package. And this does not include the opportunity costs of delaying implementation of a solution whilst design, programming, testing and debugging takes place.
The pros and cons of any software system obviously have to be weighed up before any installation takes place, but here we have laid out those related to an in-house development, and in the next blog we’ll go over those belonging to an off-the-shelf purchase to allow for a full comparison to take place.
Naturally, as a software development company that operates solely within the logistics market, we believe that in the majority of cases the most common sense and logical action is to purchase Warehouse and Transport Management Systems “off the shelf”.
You may well think “they would say that, wouldn’t they”, but if you do read on, we believe you will find the following discussion to be well balanced in its views, and justify why we believe that to be the best decision in the vast majority of cases.
A company will usually develop in-house where the issue to be addressed is trivial or where their requirements are viewed internally as complex, or perhaps unusual – a “we do things differently” mentality. Alternatively, maybe the IT department is seen as a fixed, or “sunk”, cost to the business and using them to develop a new software solution may be a “cheaper” option.
If we ignore the former and move on to the possibility of the complex and unusual, the realisation of software projects range from the totally in-house development through to the totally off-the-shelf purchase.
With a product developed completely internally, the requirement is defined, analysed, programmed, maintained and developed using the company’s own resources. In contrast, with an off-the-shelf commercial offering, you will buy and effectively have to work with the package as it comes out of the box. In reality you are least likely to find total solutions for logistics software in either of those extreme positions.
In many cases there will be a large degree of external involvement in achieving the eventual outcome. External consultants, system analysts, programmers and project managers might be used to deliver a ground-up in-house product, while no sophisticated commercial product is likely to be useable without some configuration and tailoring to meet a customer’s specific needs. This is often in close co-operation with internal IT staff, and it should also involve working with the relevant operational staff. These are elements of best practice that we always follow at Clydebuilt Business Solutions.
More realistically, the comparisons are the perceived benefits of Bespoke Software versus those of a Tailored Commercial Package. The crux of the matter comes down to the hope that the core of the chosen pre-packaged product(s) will be tried and tested, more robust and providing a stable basis on which local workflow procedures and processes may be built. This means that even if the given methods and mechanisms that augment the core are initially less than required, the system can function, probably very successfully, whilst additional changes are made. It is the combination of this strong, stable and very capable core, with the flexibility to tailor and add functions and procedures quickly, that characterise the modern commercial logistic software package, such as those that we provideat CBS. By comparison, in-house developments can rarely afford to build in additional capabilities that are not immediately required and, of course, some additional capabilities may not even be thought of.
Further developing the in-house system with new, even minor changes, can be slow and costly to deliver.
The commercial product on the other hand is likely to be the result of a variety of users in different environments all bringing their needs and requirements to the product design table. There may well be generations of design involved, making it possible that future requirements, currently unknown or vaguely known, are already catered for or easily added. With an external package you may also be entitled to any upgrades and improvements that are made to the product along the line, with negligible or no extra cost.
None of the above touches on the problems of being locked-in to external consultants that can follow a bespoke program or the difficulty of supporting and amending a system when the original programmers have gone and the level of documentation is often inadequate for others to take on the development without a huge time commitment.
There are pros and cons to both sides of course, with regards to where your software products are coming from, and these will be discussed in further detail in the next blog.
POINTS TO CONSIDER WHEN CHOOSING A WAREHOUSE MANAGEMENT SYSTEM?
PART IV
PUBLISHED 17 JUNE 2022
Making Your Mind Up
There are many factors that you will take into consideration before making up your mind and selecting the WMS provider that you wish to work with:
System features – will the system deliver the functionality that you need?
Implementation – how easy will it be to implement, and what steps are taken to minimise disruption? Be absolutely certain of one thing – there will be change!
Understanding – Are you comfortable that the supplier understands what your business requirements are, and has a sound grasp of how you would like to move forward?
Faith – Are you convinced that, over and above the details conveyed to the supplier, they have the capability to support your investment into the future?
Tried and tested – what was the response from existing users of the system?
Personal relationships – although not an obvious factor, this is actually a key issue; will the company work in partnership with you to deliver the right results, and do you think that you will be able to work together? The nightmare scenario is when the sales people leave and the implementation team arrive to ask “what is it you want then?” Trust us when we say we know of this happening first-hand!
Support – Are there adequate resources from the supplier to ensure that you will be fully supported?
These are all things that we at Clydebuilt Business Solutions have been proven to deliver consistently over the years. Of course, there will be many more variables to be taken into consideration, but most of these should be accounted for along the stages of the decision-making process. Once you have established your need for a new system and start inviting responses from prospective suppliers you will already be forming opinions on both the system on offer and the company supporting the system.
It is easy to get carried away with the marketing hype surrounding some of the product offerings, but it is imperative that you stay close to your project and ensure that you are selecting on a “need to have” basis as opposed to “that looks nice”. Once implemented, a Warehouse Management System is a business-critical piece of software that can have significant benefit to your working operations, and, as such, your decision should be made upon the final result.
It can be daunting delving into the world of choice and, with so many companies making all sorts of claims, it is no surprise that it becomes a difficult decision. The best advice to give is to ensure that you have explored all avenues with your potential supplier and you will find that you will make the right decision based on all of the options above.
Finally, use your common sense, if you understand the needs of your warehouse operationally, you will see if what is offered will work on the ground and help the people there. At the end of the day, the objective is delivery to the end customer, real accuracy, getting it right first time, every time, and improving internal efficiencies so you are avoiding unnecessary costs. In jargon terms, this all equates to adding value to the bottom line!
POINTS TO CONSIDER WHEN CHOOSING A WAREHOUSE MANAGEMENT SYSTEM?
PART III
PUBLISHED 10 JUNE 2022
The Presentation
You may have initial thoughts on your preferred Warehouse Management System based on the information already gleaned through the marketing materials, visit to your site, discussions with peers and perhaps a visit to the suppliers’ client sites. The next stage is to allow your chosen vendors to do a presentation to the team (something that can be arranged with us from this page). If your company already have the capital expenditure budget approved, then the purpose of the presentations from selected providers is to market their company and sell their solution into your business.
You may, however, be in the position where staff on the ground are aware of the need for a new system but management haven’t yet approved a budget, and in this scenario an additional purpose of the process is for the vendors to justify the costs by demonstrating how the investment will provide a Return on Investment and bring real business benefits, especially on your bottom line.
Good vendors will seek to demonstrate “real-life” scenarios to you based on situations that may occur within your warehouse. Sample data from you will be uploaded on to their system and the transactions carried out, showing the end result. The presentation will also give your potential supplier the opportunity to demonstrate how they plan to work with your other stakeholders to create any communication links that are required to connect the systems, where applicable.
All cards should now be on the table and if there are any unresolved questions or issues then this is an opportunity to ask further and ensure that you are 100% comfortable with the offering presented to you.
POINTS TO CONSIDER WHEN CHOOSING A WAREHOUSE MANAGEMENT SYSTEM?
PART II
PUBLISHED 30 MAY 2022
Explore Your Options Further
As well as the capabilities of the system, it is important to delve deeper into potential suppliers and find out more about who uses their systems, the number and experience of their staff, and projected future developments. Whatever your warehouse setup, you will want to make sure that the provider has relevant experience in a similar environment, and can add value by providing advice and expertise over and above installing a system. More importantly, system integration has become a key factor within the logistics world, and it is worth checking that the potential supplier has a proven track record creating the type of links that you need. These are usually of two main types:
Import of orders and expected goods in using a particular file type
More complex two-way messaging between your prospective WMS and a back-office system
Accepting that the above is, at best, a simplification, and a subject worthy of extensive discussion in its own right, make no mistake that this can often be a major difference between suppliers. Again, it is the syndrome of all suppliers to talk a good game, but in actual fact the experience of the market shows that claims can usually neither be taken at face value (even for large suppliers) nor that the resulting link will work robustly as knowledge may be limited, or there might be a lack of experience in the particular field. It’s good to try to talk to at least two of their customers of comparable size and ask how messaging issues are dealt with.
Some suppliers may ask to come back on site to carry out a detailed Business Process Review before moving on to the next stage of a tailored presentation. The cost of the BPR is normally absorbed within the final quote presented to you, but this exercise can prove to be invaluable to you. By the end of it, the supplier should be able to demonstrate a thorough understanding of your working practices and be able to offer practical suggestions that can help drive internal efficiencies up and ensure that labour is directed towards profitable activities. These recommendations can be geared towards the use of the product offering; this is okay, but it should be ensured that any tailoring required to deliver the brief is clearly articulated and costed and that the software solution can fit in and add value to your business.
Most software providers are reluctant to give out prices before they have been on site and got a proper feel for your operation. This is common practice and the reason for this is that true simplicity is rare and usually one will find so many variables to be taken into consideration that even providing a rough ball-park figure could be misleading and lead to troubles in the future when that original estimate bears no resemblance to the final cost. Sadly, however, there are companies who rely on the “subsequent additions” to bring up their invoice value to what they actually desire. The most common factors that may have to be considered are the number of user licenses, extra programming, hardware, training, consultancy, project management and support, all costs that some may hide away from the initial quote.
Suppliers are generally happy to pass on details of their customers to be contacted as reference sites. Find out if the offered site visit or telephone contact is a “reference site” who is contracted to allow a number of prospective clients to visit and talk – i.e. another salesperson, or an ordinary customer, like you may become, who is doing this as a favour to the supplier and to you. It should become clear when you talk to the reference site what group they belong to.
Having said all that, when offered the chance, you should take any prospective vendor up on the offer and speak with, or visit, at least one of their customers. Unless a direct competitor, most companies are happy to provide this service to the provider, as ultimately, at one point, they were in the same position as you are now. There is no better way for you to gauge the effectiveness of a system than to see it in live action, or to speak to users of the system who work with it every day. Speaking with existing clients also gives you the opportunity to dig deeper into the company and you can ask questions about the implementation process, the supplier-client relationship, and any other concerns that you would like clarified. The opportunity to do this is something that we at Clydebuilt will always be happy to facilitate for any potential customer.
POINTS TO CONSIDER WHEN CHOOSING A WAREHOUSE MANAGEMENT SYSTEM?
PART I
PUBLISHED 13 MAY 2022
After reviewing your warehouse processes and weighing up the pros and cons, you have decided that now is the right time to invest in a new Warehouse Management System. During this process you will have already uncovered areas that need improvement and perhaps already figured out where the real return on investment will come from.
The next stage is to scan the marketplace for suitable vendors, looking at both the functionality of the system on offer and the experience brought to the table by the provider. This alone can be daunting; with so many different companies and systems claiming to be able to do it all, where do you start?
Preparation of an operational specification sheet will greatly assist in the procurement process as you will have already mapped out your warehouse and the key elements such as size, number of pallets, aisles, bays, staff, etc. If you have historical data relating to your daily workings, including number of transactions for processes such as Goods In, Put Away and Picking, this could also be added in to the requirements. Basically, what you are doing at this stage is completing an internal business process review, and ascertaining exactly how you are working and identifying any peaks or dips in your operations.
It is not uncommon at this stage for companies to hire the help of a consultant – a service that our decades of experience in the industry allows us to provide – with the view that an external eye often provides a better perspective. If you choose to do this it is important that are aware of at least some of the potential pitfalls of doing so, such as your consultant working with a couple of “preferred suppliers” and pointing you towards one of these regardless of your specific needs.
Another danger is the use of a standard Request for Information Document, or Invitation to Tender, which may be downloaded from the Internet or provided by the consultant. The risk with these is that not all of the elements listed may reflect your true current practice and they can ask about features which may sound good but that will actually be of no benefit either presently, or in the future. In this case, when you are short-listing WMS providers, it’s easy to overlook a system based on apparent capabilities when, in actual fact, there is functionality that you do not require, and the system is really the ideal fit.
Preparing your own RFI document based on your operational needs is a good place to start, as all of the components are then relevant to your own business. You could try sending this out to prospective suppliers to fill out, but to gain a true idea of how a provider will support you, it might be a better idea to have them visit your site, prior to the RFI evaluation.
This may seem like a nuisance but, in the long run, this is beneficial to both parties, and it gives you a chance to meet with the company and establish if they have a sound grasp of how their solution can fit with your environment. For the supplier, it gives them a perfect opportunity to complete the RFI, or prepare a proposal, based on the actual scenarios that you face on a daily basis.
WHY DO YOU reALLy NEED TO CONSIDER A WAREHOUSE MANAGEMENT SYSTEM?
PART IV
PUBLISHED 1 APRIL 2022
SECURING THE FUTURE OF YOUR BUSINESS
As we all try to recover from the last couple of years, and forge into the future, more and more companies are investing in good software systems to drive their company forward – including your customers! And it is those customers who will expect complete integration between your businesses, that you will have suitably advanced IT capabilities, particularly in these days of increased remote and home working.
Despite perhaps what can be seen as uncertain pressures relating to the current global situation, in a number of aspects, it has been reported that a majority of those in Logistics and the Supply Chain are still expecting to see an increase in technology investment in the near future. The main concern for the majority of companies looking to invest in technologies, however, is finding solutions that provide a clear and immediate return on that investment, with slightly less focusing on putting finance towards a system that will allow for future growth.
The implementation of a Warehouse Management System pays for itself within a matter of months, of course, by reducing your on-going operational costs, as was highlighted in the previous parts of this article. It also provides a good basis for facilitating future growth, by improving your internal efficiencies and allowing for more work to be completed within the same timeframe.
Your manual warehouse may have been working without any issues for years, you aren’t aware of any immediate problems, and purchasing a WMS may seem like a massive investment that simply isn’t worth it to you right now. But say your highest value customer decides that they would like to send you files electronically, and they would also like an electronic file sent back, and on realising that you can’t support this functionality they decide to look elsewhere for a provider.
Where would this above scenario leave your business? In most cases the realisation that a forward-thinking investment a few months ago would have solved all your problems is a realisation that is, unfortunately, just too late. With the LocateIT Warehouse Management System from Clydebuilt Business Solutions, and the communication potential that it provides, however, you need never worry about being left behind.
Coming Soon: Points to consider when selecting a WMS
WHY DO YOU reALLy NEED TO CONSIDER A WAREHOUSE MANAGEMENT SYSTEM?
PART III
PUBLISHED 25 MARCH 2022
GETTING IT RIGHT EVERY TIME!
Getting something wrong is never a pleasant experience, but in a business environment the results can have a devastating impact that is amplified greatly. As well as dealing with your own disappointment, there are also customers who require answers! Clients are often particularly quick to notify suppliers when something has gone wrong, whether it be overcharging, incorrect items being despatched, or goods going to the wrong recipient. Regardless of what the nature of the discrepancy is, it is not in your best interests to have disgruntled customers.
Accuracy is expected as standard in the logistics industry, as customers are paying for that as part of a service. A few slip-ups here and there will usually be accepted, but wouldn’t it be great if you could increase your accuracy and provide the highest level of performance that could translate to only 3 errors in 1,000?
“Customer Relationship Management” is a broad term that opens up a whole can of worms, with the buck not stopping at improved accuracy – something that is expected as standard. Here are a few points, however, that do equate to Best Practice CRM:
Joint business reviews with a dedicated account manager
Senior management involvement where applicable
Accessibility and Responsiveness from supplier
Integration of specialist resources
Proactive implementation of “value added” services
Although the first couple of points are “soft” issues that are easy to understand, implement and maintain, they should not be overlooked as they play a massive part in making your client feel valued. If you can make each customer believe that they are your priority then you are off to a good start.
A Warehouse Management System will help you deliver on the remaining points, building a rounded basis for sound business relationships. Historical data relating to customer transactions and stock, and within the restrictions of current data protection laws, is kept within a WMS and can be generally accessed on demand, often in the format of choice. This eliminates the time, hassle, and headache of having to answer ad hoc customer queries in a manual environment.
Furthermore, value can be added to your customers by offering automatic reports detailing the business information they require, by email or whatever form of electronic transfer they may prefer. A WMS makes these types of transactions common practice, and once you have defined the frequency, contents, and format, no additional work will be required.
Remote access and real-time scanning further enhance a WMS by providing a means to automatically update systems as and when transactions are completed, improve accuracy to those higher levels, and immediately share this information with those who need to know.
It is maintaining this relationship through the use of a WMS, providing the information customers’ want, linking with their systems, and having good communications and visibility that will allow you to keep them, and in the position where they won’t even want to consider taking their business away.
Next: Part IV – Securing the Future of Your Business
