What are the Real Cost-Savings of Cloud Warehouse Management Solutions?

November 19th 2014 15:37:22 PM

Whatever your views of the technology, we can all probably agree that the Cloud has changed the way we think about technology today. Often described as the most revolutionary technology invention since the PC, the Cloud has caused quite a stir among businesses and technology consultants. As companies across the globe turn to the Cloud for data storage and information accessibility, many are wondering whether the Cloud is actually as beneficial as it seems. Does it really help you cut down on IT costs? Is it as safe as they say? How much can you actually save by moving to the Cloud?

These questions are at the forefront of business leaders’ minds and—in some cases—are preventing many from making the transition to the Cloud. Hesitation to move to new technologies is understandable, especially in today’s day and age. However, if uncertainty about the Cloud’s cost is holding you up, we’d like to put some of your doubts to rest. We’ve done our research, talked to Cloud users, and formulated our own views based on years of experience. The following is what we’ve found regarding the Cloud, its benefits, and its cost (or lack thereof).

Cloud Warehouse Management Software is Soaring in Popularity

CDW’s 2013 State of the Cloud Report reveals some interesting information about the Cloud and today’s businesses. According to the report, companies are moving their ERP and warehouse management software solutions to the Cloud at the highest rate in history. In fact, the Forrester Research “Sizing the Cloud” report predicts a sixfold increase for Cloud computing solutions, moving from $40.7 billion in 2011 to $241 billion by 2020. With so many companies making the move, there have to be substantial benefits—right?

Benefits of Cloud-Based Warehouse Management

So what are the benefits of Cloud-based warehouse management solutions? Cloud applications can bring a lot of benefits to the table, but the main benefits we’d like to focus on are:

• Elasticity and scalability
• Decrease in IT support
• Faster implementation times (which leads to a faster ROI)
• Cost-savings

The Cloud is elastic and scalable, meaning you can use how little or how much you deem necessary at any given moment in time. Unlike traditional software servers that require you to invest in a certain amount of CPU, the Cloud allows you to pay for only what you use. The outcome is a much more affordable solution with less risk for your company. In addition, the Cloud requires very little (if any) hardware needs, freeing your IT staff to focus on more important issues. On-premise software solutions require rack space, electricity, cooling, bandwidth, hardware, and a trained IT staff to operate effectively; the Cloud simply requires a connection to the Internet and devices you most likely already own.

An added benefit of moving to the Cloud is its speedy implementation. You can have your Cloud-based warehouse management solution up and running in a fraction of the time it takes to implement a traditional, on-premise system. This allows you to reap the benefits of the Cloud much faster and attain a full return on your investment in no time at all. You won’t even have to worry about applying the latest security patches as the Cloud always has ongoing updates that are applied seamlessly and automatically.

The True Cost of the Matter

The above benefits contribute to the overall cost-savings of Cloud warehouse management software. Less hardware, lower upfront costs, and quick implementation times all factor into the Cloud’s low-cost model. However, the most compelling reason for switching to the Cloud can be seen when you compare the long-term costs of on-premise solutions with Cloud-based solutions.

On average, businesses replace their on-premise software systems every 5-8 years. Some companies may try to stretch this time-frame, but on average this is the lifespan of an on-premise warehouse management solution. This is something many executives and managers don’t take into account because they see the cost as being too “far off” to make a difference. The reality is, however, that the cost does make a difference in the long-term cost of your solution. If you are replacing or upgrading your system every 5 – 8 years, your total cost of ownership (TCO) is extremely high.

With the Cloud, your TCO is much lower as updates occur automatically. You don’t have to worry about investing in a new solution every five years, and you can rest assured that your software is up-to-date and relevant with your warehouse management technology. So while you may balk at the monthly fees, the long-term cost is actually cheaper when you consider having to replace your on-premise solution every 5-8 years.

If you are interested in learning about our Cloud-based Sage 100 warehouse management applications, contact us today. We’d be more than happy to help you discover the true cost-saving benefits of the Cloud.