How to get the best deal during WMS contract negotiations

You are down to the last step in selecting your warehouse management system.  You could be buying your WMS directly from the developer or from a third party reseller. Either way, they will begin with a contract stating the agreement you have come to, structured clearly to their advantage. That is normal business and nothing of any immediate concern.

Your selection team has so far been made up of operating people from sales, finance, and production.  Now is the time to add legal support to your team. If your business has an in-house attorney then use their expertise, though you should also consider adding outside legal support from attorneys with significant experience in software contracts.

Recommended reading: get step-by-step information on WMS contract negotiations and the rest of the selection process using comprehensive WMS selection survival guide

Your original WMS requirements are still of primary importance. You want a statement that these requirements and that the assertions made by your vendor are the reason you selected this software. You are placing absolute trust that this WMS will be the toolset you will use to satisfy your requirements.

You want to the agreement to state what the vendor will provide for you and when, and - on a basic level - how much the WMS will cost upfront. This is an agreement between two business parties and the expectations your WMS vendor will have of you should also be clearly detailed.

Data migration and technical issues

Who will convert and your existing warehouse data and import that data to the new WMS? This is a major consideration for any enterprise-wide system and is one of the most time-consuming activities of the implementation. How will the imported data be tested and be updated, if needed, should be agreed in the contract as it likely will need several iterations to be completely ready.

Consider what hardware and network upgrades are needed and who provides those upgrades. If you chose a cloud WMS, be clear on what the vendor will provide for data backup and security. Get to know what minimum uptime will they agree to and whether they have a plan to recover from any potential disaster. Ensure that any extra cost for WMS service packages is outlined clearly so you can budget for it.

Training and implementation

Has the vendor promised to provide training, and if so what level and quantity of training have they promised? Who will be trained? Will the training be onsite or through the use of web presentations?  Will they give you training materials for use later on as your personnel changes?

Verify the price of the WMS is the amount you had expected, and pay careful attention to conflict resolution processes. There is always a chance of a disagreement and you don’t want to be limited to some far-away foreign court.

Pay attention to the details. Be sure the i’s are dotted and the t’s crossed. Your WMS vendor is not out to cheat or take advantage of you at this point - or shouldn’t be, if you have been thorough in shortlisting vendors with good business practices. Just watch out for your own interests and know what you are agreeing to. The sooner you sign, the sooner you can start implementing your new software.

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle.

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Tom Miller

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