This article originally appeared in the March/April issue of PARCEL.
When I started in this industry some 25-plus years ago, some companies were building their own systems and operating with a lot of data entry and a lot of paper. Back then, the argument to build was easier because there weren’t as many WMS companies, and the functionality in the systems offered was basic. Therefore, many customers developed the attitude that they were unique and no off-the-shelf system would be able to fit their needs. Part of this was true back then; the systems were not mature, and the functionality was lacking for a variety of processes. Today, systems have matured and are very robust. Newer software systems have been architected with the ultimate amount of agility. As many of the WMS companies have mature systems, the price to purchase and implement has dramatically gone down. The space is competitive and the list of attractive vendors has broadened.
The “unique” argument no longer works (although you do have to select the right system). The next argument is that support is too much money. An executive may listen to this and go along with it if they are not IT-oriented. But the fact is that someone has to support the system, whether you have an old one or you build or buy one. Through a maintenance contract with a software company (as long as you buy right) the maintenance contract should get you support and new upgrades. If you do the analysis of a new employee hired to support an in-house system (with salary and fringe) versus paying support you may find out that it is less expensive than building an IT empire. Plus the risk is less! If a small- to medium-sized company decides to support a homegrown system, you have two or three people that know the system. If one moves on or departs this heavenly earth, the learning curve is huge. Whereas with an established software company, there are numerous people, documentation, etc. to avoid such a crisis. Also, a “real” software company would have an established training program with training tools online and classes, etc. Frequently, homegrown systems never get around to documentation or training; therefore a lot of functionality is lost with transition of employees and domain experts.
The fact is technology is what will allow companies to compete in the future. As the workforce ages, new millennials and beyond will demand the technology tools to make their job easier. Companies with the best supply chains will be the winners in the e-commerce world in the future.
Susan Rider, Executive Life Coach and President of Rider & Associates, can be reached at email@example.com.