techwatch
Swept up in the cloud
WHEN IT COMES TO SELECTING SO-CALLED “CLOUD”
software apps for their distribution operations, logistics managers have two choices: a software-as-a-service (SaaS) offering
or a hosted solution. Each approach has its pros and cons, says
Frank Camean, president of the consulting and systems integration firm 4Sight Supply Chain Group. A clear understanding
of the two choices is critical to making the right decision for a
given company’s operations.
SaaS is generally a good choice for companies getting started
with cloud computing. Under the SaaS model, a company rents
the software, paying a periodic subscription fee. The software
application is housed on a remote server and accessed via the
Camean.
With a hosted solution, by contrast, a company sets up the software application on an
Internet-based server, which is run and maintained by an outside vendor. In essence, it’s a
private cloud except that the vendor owns the
hardware and provides the support. Camean
advises companies opting for this “single tenant” approach to get a clear upfront definition
of the fees, particularly whether the charges will be based on
transactions or period of usage.
For warehouse management systems (WMS), in particular, it
makes sense to start out with the SaaS version if the company
has low to medium volumes or a simple operation with a limited number of users. Companies with tight information technology budgets are also good candidates for this approach.
But over time as the distribution center operation expands or
becomes more complex, a company should take a look at the
hosted version. That’s because a hosted solution allows for flex-
ibility in configuring the application to meet a company’s
unique operational needs. “If you’re debating between a SaaS,
hosted, or on-premise [WMS], I would encourage you to look
at the maturity or complexity of your overall operations,” says
Camean. “Don’t [make the decision]
strictly on the basis of the size of your
company or your annual revenues.”
In fact, if the company is running a
sophisticated DC operation with auto-
mated material handling equipment,
then it really should consider a hosted
solution (or the traditional on-premise
model) for its WMS, Camean says. “You
can’t do customizations in a SaaS WMS,”
he explains.
Editor’s note: To learn more about
cloud computing, check out DC
VELOCITY’S free “Monthly Briefing” webcast with Frank Camean, “Cloud-based
WMS: Is it ready for prime time?” You can
view the archived presentation at
www.dcvelocity.com/videocasts/?video-cast_id= 21.
