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Build a Business Case – The Sixth Step in Selecting the RIGHT WMS

By Ian Hobkirk | 08/06/2018 | 4:46 AM

Business CaseBuilding a coherent business case will allow your company to confidently make a go/no-go decision with regards to investing in the purchase and implementation of a new Warehouse Management Software (WMS) system. The last five blogs in this series have outlined all the steps necessary to gather the information needed to develop a business case:

  • Perform detailed discovery
  • Define the current state
  • Define the future state
  • Project future savings
  • Estimate implementation costs

This blog focusses on how to build the business case itself.

EXAMINE THE VARIOUS OPTIONS

Once the cost savings and other benefits have been dollarized, and the cost of new software has been estimated (as described in the last two blogs in this series: Project Future Savings and Estimate Implementation Costs), then it is possible to compile a well-rounded business case which examines the various options available to a company. In most cases, at least three, possibly four scenarios should be considered:

  • Do nothing: Keep the current software and make no changes to it
  • Customize current software: Continue to customize the current software by modifying the source code as required
  • Upgrade: Perform a formal upgrade of the current software system to the current release
  • Replace: Implement a WMS system from a new vendor

CRITERIA TO CONSIDER

There are a variety of criteria to consider when evaluating each of these possible scenarios. Some of the major factors include:

  • Operational benefits: cost savings, scalability, supportability
  • Capital investment required to implement the software
  • Level of effort required internally to implement the software
  • Degree of customization and overall IT complexity required
  • Degree of risk involved if the implementation does not go as planned

All of these factors must be properly analyzed and compared for each scenario. For some scenarios, there will be a range of potential outcomes. For example, a new WMS from a Tier 1 vendor may be very expensive but not require as much customization as a solution from a mid-tier vendor which could be less expensive but less feature-rich.

If a strong business case for a WMS exists and your company decides to proceed with a new WMS, then a full WMS Vendor Selection Study is required to determine the optimal software partner to work with.

 

Related Reading:

White Paper: How to Choose the Right WMS – Part I: Distribution Center Process Optimization

White Paper: The Ultimate WMS Preparation Guidebook

White Paper: Selecting the Right WMS

White Paper: Six Ways to Postpone – Or Eliminate – Your Distribution Center Expansion

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The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Ian Hobkirk

Ian Hobkirk

Ian Hobkirk is the founder and Managing Director of Commonwealth Supply Chain Advisors. Over his 20-year career, he has helped hundreds of companies reduce their distribution labor costs, improve space utilization, and meet their customer service objectives. He has formed supply chain consulting organizations for two different systems integration firms, and managed the supply chain execution practice at The AberdeenGroup, a leading technology analyst firm.



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