Open source WMS: how much will it really cost?
Free is a beautiful world, especially when you’re in the warehouse and every margin is already razor-thin, and every scrap of product (or waste) accounted for each day. When we hear about a platform that makes our jobs easier also coming with no cost, it’s a bit difficult not to drool all over the floor.
As you’ve probably guessed already, these open source WMS tools you’ve seen on the web aren’t truly free, even if you’re not paying anything upfront.
Let’s look a little closer at the cost of open source options for your warehouse.
One quick note is that we’re not here to promote one option or the other, there’s plenty of benefits to every model. Consider this page as a quick tool to help your team ask the right questions about your next WMS.
Buying the software
Let’s start off with the big winner for open source WMS tools. They’re essentially free to purchase, so you’re not hit with license fees. Typically, you’re saving thousands of dollars in this category.
The one caveat is that you might need additional features or support to make the most of the system. If you want something outside the baseline software, then you may have a purchase cost of sorts.
Special features and customization
Say you found the perfect open source WMS for all your needs, but its cross-docking module just isn’t as good as you need it. You’re going to have to bring in some outside help for this one. You’ve got two options for adding this feature or for customizing the module that comes with your tool:
- Use your IT team to build it.
- Work with a third-party, either their existing tool or creating one just for you.
Going the first route requires you to either have an existing IT team that can build out these modules or hire someone who can. Working with your existing team will pull them away from some duties and typically takes a little longer to your new module. Hiring up for this project will likely cost you at least $65,000 per year.
Depending on the level of customization you create or the number of tools and services you buy from others, you may end up reaching or exceeding the cost of a software license. SaaS models for small systems may only cost you a couple of hundred dollars each month.
Here’s the letdown: implementation costs for an open source system can be about the same as those for a private label platform. You’ll still need the infrastructure to run it, downtime to transition between platforms and a team who knows the tool and can train your staff on it.
Understanding and adjusting to workflows are just as difficult with either system. One way that this segment may feel like it costs you a little more with an open source tool is if vendors you’re considering include training and other implementation needs in their licensing costs.
Implementing an open source WMS also has one big gamble: how well it’ll play with your other software. Private label solutions tend to have a benefit of being tested for a variety of platforms and integration in multiple environments, so they’ve done the debugging and cleaned up a lot of interactions before you even thought about installing them.
Some open source tools are also very good at this and work well with APIs and EDIs right away. Others don’t. When you implement open source, you’re on your own in terms of implementation and integration. If everything works as it should, that’s wonderful. If things don’t, you’ll need a good team or some help.
Maintenance and troubleshooting
This is another section that can be a wash. Most vendors will charge you a fixed cost or a percentage of the license each year as a maintenance fee. You pay whether or not you need any help. Open source tools don’t have that requirement, but you’ll have to hire outside help or an internal team member to work on issues that do arise.
This area is a bit of a gamble. If you choose wisely, then an open source tool could end up generating some bigger savings. If the platform doesn’t work well or you need a lot of help updating it whenever any of your other pieces of software — like an ERP — release an update, then you could be out-paying a private label solution’s costs.
One area that most open source tools shine in is their community. You’ve got a lot of developers and programmers sharing advice to help things work more smoothly. Sometimes they’ll release tools and patches to address different needs or industries. There is a big feeling of “we’re all in this together,” and that can be great when you’re experiencing a problem someone else has already solved.
Private label solutions tend to have communities as well, but they’re often looking for solutions from the vendor. There is usually a little less experimentation, and much of the work on these platforms is custom or closely guarded. If the vendor can charge for a module to accomplish a task, they’ll most likely do so.
It’s an interesting debate and one worth having, especially if you’ve got a great IT lead already on staff.
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