Four benefits of SaaS WMS for small businesses

After a long history of false starts and failed expectations, software as a service has matured into a viable and fast-growing business model for managing warehouses.  

There is still debate about potential risks involved in utilizing hosted software, but for small companies the benefits side of the argument seems particularly compelling.

1. Cost saving on physical infrastructure

SaaS WMS allows small companies to avoid investment in physical infrastructure.  Businesses can avoid spending cash that is needed to fuel growth on stacks of servers which will be obsolete in five years and in need of replacement.  Instead, that cash can be spent on marketing or manufacturing efforts that generate revenue.

2. Scalability

SaaS WMS allows small companies to scale their IT costs as they grow.  This can be an underappreciated feature for people who have never had to grapple with problem of having work for fractional amounts of resources.  

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With SaaS, you only pay for the part of a server you use.   A small company might not have enough work to keep a full time IT professional busy, but with SaaS WMS you can pay for 3/5ths of a full time equivalent.  You also do not have deal with the distraction of managing an IT department that really has nothing to do with your warehouse operations.

3. Easily-installed updates

SaaS WMS allows small companies to keep up-to-date with upgrades and software enhancements.  For companies that host their own software, upgrading can be a costly and time consuming decision.  Extensive testing is required, and there may be cost of ownership increases.  Generally, because internally hosted companies wait so long to perform an upgrade, a significant investment in change management is required, to train people on new features and platforms.

In the SaaS model, service providers routinely apply upgrades so the features are kept current, and the change management cost is minimal.

4. Expert data security provision

SaaS WMS providers will likely know more about managing data security than a small company.  IT security, and all of its associated issues, is a complex subject.

While there is a lot of concern expressed about how secure cloud based computing really is, the decision to host or not host your own software due to security concerns is probably only critical at the extremes.  If a security breach would cripple your business model, or totally eradicate your customer’s trust, then you probably cannot afford to allow someone else to manage your data, no matter how small you are.  

On the other hand, if a data breach would be undesirable but not catastrophic in the long run, then chances are good that a SaaS provider will do a better job at reducing security risk.  The SaaS provider will invest more, be more up-to-date with counter measures, and will have a market driven interest in not receiving any bad press because of a security failure.

SaaS -as a business model- is not a panacea for everyone’s IT problems.  But if you are a small company, and you know for certain that IT is not one of your strategic advantages, then SaaS offers you a lot of benefits.