G00249415

10 Technology Best Practices When Evaluating

Warehouse Management Systems
Published: 26 March 2013

Analyst(s): C. Dwight Klappich

Trends in service-oriented architectures, deployment tools and analytics, as

well as the move to the cloud, are revolutionizing warehouse management
systems. Logistics and IT leaders can use this research to better
understand and leverage technology trends when updating or buying a new
WMS.

Key Challenges

The technical architectures of many existing warehouse management systems (WMSs) are
aging and technically obsolete. These systems often require a significant amount of
customization that adds to logistics costs and support challenges.

Companies find that their WMS is not flexible enough to enable the business to respond to
change.

Technical architecture considerations have traditionally focused on IT requirements and less on

the wants and needs of end users. This limits an organization's ability to achieve process
improvement goals.

Companies have hung on to aging applications well past their prime due to the total cost of
ownership (TCO) and high switching costs. This is pushing them to buy new WMS applications.

Recommendations

Move toward WMS technology modernization to address aging and technically obsolete WMS
applications.

Ensure that technical architecture is one of your top three evaluation criteria. Then focus as
much time and energy on investigating support for enhanced decision making as on process
and activity execution.

Gravitate toward the most contemporary technology that offers the longest usable life for your
investment.

Table of Contents
Strategic Planning Assumption............................................................................................................... 2
Introduction............................................................................................................................................ 2
Analysis.................................................................................................................................................. 3
Embrace the Principles of Service-Oriented Architecture.................................................................. 3
Favor Model-Driven Business Process Applications to Align Processes............................................ 3
Aim for a Zero-Modification Implementation......................................................................................4
Prioritize the User Experience........................................................................................................... 4
Reinforce the Value of Alternative User Interfaces............................................................................. 4
Favor Embedded Performance Management and Analytics Capabilities........................................... 5
Exploit Deployment Wizards and Tools to Accelerate Rollouts.......................................................... 5
Weigh the Value of SaaS and Cloud Deployment Models................................................................. 5
Architect for Scalability..................................................................................................................... 6
Prepare for Logistics as a Platform................................................................................................... 6
Recommended Reading.........................................................................................................................7

Strategic Planning Assumption

By 2016, more than 40% of new logistics application purchases will be delivered through the cloud.

Introduction
Logistics organizations need business and application agility. Logistics and IT leaders need to
better control and manage application changes. Changing business conditions require that
organizations have the abilities to remain current with version upgrades, easily transform processes
and adapt the application to support these changes. Likewise, user experience modernization must
focus on both power and casual end-user needs for more and better information in a consumable
format. Finally, logistics leaders now demand that applications facilitate enhanced decision making
to move beyond basic process automation.
For those reasons, technical architecture should be one of the top criteria when selecting a WMS,
and second only to functionality. Technical architecture has become increasingly important
because:

The long life span and high switching cost of WMS applications demand that a new purchase
have a life span that is as long and as useful as possible.

Highly customized WMSs make it expensive for companies to remain current on a vendor's
upgrade path.

Page 2 of 8

Gartner, Inc. | G00249415

Rapid and continuous change demands that applications be agile and adaptable.

Warehouse operations are becoming more demanding and sophisticated in their use of tools to
improve performance.

As a result, organizations are starting to modernize their technical architectures. This involves
implementing or upgrading to more-contemporary WMS technical platforms. These platforms
provide users with many benefits essential to long-term investment viability, including:

Long application life span

Minimal need for customization

Enhanced tools for addressing customization if needed

More adaptability at the architectural level

Improved usability

Better decision support

This research provides guidelines that can help logistics executives and IT leaders select a WMS
with the appropriate technology architecture and start their journey toward technical modernization.
Logistics and IT leaders should follow the best practices in this research after reading "Consider 10
Criteria When Evaluating WMSs," which provides insight and advice about more general issues to
consider when evaluating WMS vendors and offerings.

Analysis
Embrace the Principles of Service-Oriented Architecture
While service-oriented architecture (SOA) continues to be a compelling topic for IT organizations
considering application replacement and modernization, most WMS vendors haven't rewritten their
applications to be SOA-compliant. Instead, they've wrapped their APIs in SOA-style technologies
for syntactic compliance to meet demand. Although this approach will reduce some integration
costs, it won't deliver the capabilities required for increased agility.
Action: Weigh up the pros and cons of this approach. Then evaluate the depth of SOA offered by
the WMS vendors under consideration, as well as their abilities to deliver dynamic process
composition, in addition to the SOA's ability to facilitate integration.

Favor Model-Driven Business Process Applications to Align Processes

Model-driven business process applications refer to business applications that support explicit,
graphical models of supported processes and generate output that configures commercial runtime
components based on the process model. Many WMS products have an implicit representation of
processes, but they're not intuitive, explicit or graphical.

Gartner, Inc. | G00249415

Page 3 of 8

Action: Affirm that model-driven business process WMS applications will enable better process
alignment between end users and the IT organization in warehousing applications. They'll also
provide better tools for supporting continuous innovation and adaptation.

Aim for a Zero-Modification Implementation

Historically, WMSs were heavily modified, and the total extent of modifications made a WMS
among the least updated systems. This often inhibited the ability to adapt to future process needs
and forced users to spend more than half of postimplementation TCO on supporting WMS
modifications. Vendors are starting to meet these requirements with embedded scripting languages
and model-driven process management capabilities that enable changes without affecting the
underlying code. This makes upgrades easier.
Action: Strategically commit to as close to a zero-modification implementation as realistically
possible to minimize support costs and problems and to improve application upgrades.

Prioritize the User Experience

As WMSs move beyond the warehouse operator and offer more management capabilities to
decision makers and nonoperators, the UI becomes increasingly important. In fact, Gartner finds
notable UI capability and strategy differences across WMS vendors and products. Since radio
frequency devices became the prime WMS user interaction method, little has changed in how end
users display and consume information. However, mobile devices have advanced and user
resistance to using mobile devices has vanished. Users are now demanding more consumerlike
capabilities on handheld devices. These capabilities include displaying pictures and video or
rendering data on a Web page instead of as simple text. Supervisory users are also demanding
tablet computers that provide mobile analytics and alerts. As a result, the user experience will be a
differentiating factor and a key success factor in new WMS deployments.
Action: Evaluate the system's ability to provide intuitive user experiences to both casual and power
users. Empower end users to test a system's ability to personalize the user experience, as well as
the vendor's vision and road map for future-generation UIs.

Reinforce the Value of Alternative User Interfaces

The most notable and mature alternative WMS UI is voice. Voice is a mature method for interacting
with WMS and competition, and partial commoditization of voice has brought down costs. Although
voice is not yet ubiquitous, it is well-established in certain industries, such as grocery, as well as
certain process areas, such as picking, but with lower costs. The maturity of voice and the need for
more flexibility is expanding the demand for voice into new areas. Other forms of alternative UI
would be tablet PCs for supervisory users or specific types of automation like pick to light or other
forms of real-time material handling integration. RFID, once hyped as a replacement for bar codes,
has failed to gain traction for traditional warehouse processes, but we have seen RFID innovation in
asset-locating applications like Pinc Solutions' RFID-based advanced yard management solution.
Action: Evaluate voice, tablet PCs for supervisory users, and specific types of automation like pick
to light or other forms of real-time material handling integration.
Page 4 of 8

Gartner, Inc. | G00249415

Favor Embedded Performance Management and Analytics Capabilities

Since WMS's inception, there has been minimal management support beyond simple reporting
capabilities. A fundamental WMS trend is the increasing need to provide managerial users more and
richer information to enable them to manage their warehouses better. Vendors have offered or have
been adding analytical reporting and dashboards for some time, but true embedded performance
management capabilities are nascent and differentiated across vendor offerings. For most
companies, analytics have been reports about past activities and key performance indicators (KPIs),
but little has been done in the area of real-time, predictive analytics. However, this is changing.
Action: Define and standardize the metrics and KPIs that you plan to monitor, as well as your need
for near-real-time analytics and alerts. Also, develop strategies for presenting data in multiple ways,
such as via user portals and dashboards.

Exploit Deployment Wizards and Tools to Accelerate Rollouts

Gartner finds a high percentage of companies deploying WMS across multiple warehouse locations.
In the past, each WMS site deployment was nearly a complete implementation created from
scratch, which resulted in long, complex and risky multisite deployments. Some vendors now offer
tools, or wizards, to help manage and accelerate multisite deployments by allowing users to
replicate key configuration information and settings from the initial facility to subsequent facilities. If
sites share characteristics, this can have a significant positive impact on multisite deployments.
These capabilities also enable companies to create a standard blueprint for their warehouse
operations that they can replicate across facilities with only minor modifications. This makes it
easier to standardize best practices across an organization.
Action: Verify which tools if any the vendor provides to help manage and accelerate multisite
deployments if you are deploying WMS across multiple facilities.

Weigh the Value of SaaS and Cloud Deployment Models

When software as a service (SaaS) WMS first emerged, it had limited functionality and was bestsuited to low-end, low-complexity, low-sophistication warehouse environments, or what Gartner
calls Level 1 or Level 2 warehouses (see "Apply an Architectural Framework to Stratifying
Warehouse Management Systems"). However, over the past couple of years, specialized SaaS
WMS vendors have emerged that offer more-functional solutions.
Although these solutions do not yet cover the breadth and depth of WMS market leaders, they have
enough functionality to support the core WMS requirements of moderately complex warehouses.
Scalability had been a concern, specifically for multitenant SaaS WMS. However, these concerns
are diminishing as more implementations go live. TCO and the need to shift the investment from
being a capital expenditure to an operating expenditure are proving to be prime motivators for
moving to SaaS WMS.
Additionally, several best-of-breed WMS vendors now offer cloud deployment options for their
WMS. Typically in these cases, the WMS is accessed on-demand but the WMS is deployed as a
dedicated instance per customer, with the vendor managing the cloud infrastructure across

Gartner, Inc. | G00249415

Page 5 of 8

customers. To the end user, there are no obvious differences between a multitenant SaaS
deployment and a cloud deployment, although there are some differences for the vendor.
Action: Take into consideration your long-term deployment strategies, your near-term investment
priorities, and your ability and desire to support the WMS IT infrastructure when evaluating the value
of cloud versus traditional WMS deployment options. Note that functional differences are no longer
the principle gating factors driving the cloud versus on-premises decision. Explore multiple methods
for deployment from standard on-premises to hosted to full multitenant SaaS.

Architect for Scalability

WMS scalability and performance are of particular importance in high-volume, high-throughput
warehouse operations, such as online or catalog selling, or service parts management. Because
logistics is often seasonal with extreme peaks in demand, scalability is important. Infrastructure and
solution design that may be appropriate for low-demand periods would fail at peak volumes.
Leading vendors typically have performance benchmarks and tools to help scope infrastructure
requirements. If a vendor does not have these tools, this should be a red flag. Users in these highthroughput environments must first consider the ability of the WMS to handle high-transaction
volumes by talking to other vendor customers with similar volumes.
As volumes increase, the need for advanced capabilities becomes more important because
capabilities help drive higher levels of performance. Capabilities like task-interleaving, wave
planning and workforce management are critical tools for driving greater process performance.
While these capabilities might be of minimal importance in low-volume facilities, they become vital
in high-volume operations.
Action: Focus on functional capabilities that facilitate processes in high-performance operations,
looking at issues like "wave" picking, task interleaving and automation support, as well as user
capabilities like voice or pick to light. Use "Apply an Architectural Framework to Stratifying
Warehouse Management Systems" and "Understand the 10 Dimensions of Warehouse Complexity
Before Evaluating WMS Solutions" to help categorize operations to determine your scalability
needs.

Prepare for Logistics as a Platform

Many companies struggle to orchestrate processes across logistics applications because they have
bought or built stand-alone applications specific to a function like WMS. At best, they can pass
transaction data back and forth.
Logistics as a platform or what Gartner refers to as supply chain execution (SCE) convergence
helps supply chain organizations better orchestrate and synchronize processes across functional
domains (see "Supply Chain Execution Convergence: Delivering on the End-to-End Process
Promise"). It enables them to support end-to-end processes, such as order to cash, that span
traditional functional and application boundaries, including warehousing, transportation or order
management.

Page 6 of 8

Gartner, Inc. | G00249415

Logistics as a platform is an emerging trend that enables organizations or providers to build multiple
functions on a common technical architecture that shares UI, data model and functionality.
Logistics as a platform is emerging from a very small number of vendors, such as Manhattan
Associates and its Supply Chain OptimizationPlanning Through Execution (SCOPE) platform.
More broadly, other vendors are offering some simple, cross-functional data integrations, but
there's minimal, if any, cross-functional process orchestration.
As concepts like multi- or omnichannel commerce grow, convergence will become increasingly
important. Although organizations need to focus new application acquisitions on specific, near-term
needs, they need to make these decisions in the broader context of longer-term strategies, such as
SCE convergence.
Action: Start transitioning to SCE convergence if you are an early adopter. Begin by defining
consistent business objectives across SCE functions, and make a vendor's ability to deliver a
logistics platform a critical selection criterion.

Recommended Reading
Some documents may not be available as part of your current Gartner subscription.
"Predicts 2013: Collaboration, Cloud and Evolving Strategies Will Drive Global Logistics"
"Magic Quadrant for Warehouse Management Systems"
"Most Benefits of Service-Oriented Architecture for Business Applications Are Longer Term"
"Model-Driven Packaged Applications: Using SOA and BPM to Modernize Packaged Applications"

Gartner, Inc. | G00249415

Page 7 of 8

GARTNER HEADQUARTERS
Corporate Headquarters
56 Top Gallant Road
Stamford, CT 06902-7700
USA
+1 203 964 0096
Regional Headquarters
AUSTRALIA
BRAZIL
JAPAN
UNITED KINGDOM

For a complete list of worldwide locations,

visit http://www.gartner.com/technology/about.jsp

2013 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This
publication may not be reproduced or distributed in any form without Gartners prior written permission. The information contained in this
publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or
adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication
consists of the opinions of Gartners research organization and should not be construed as statements of fact. The opinions expressed
herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not
provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its
shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartners Board of
Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization
without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner
research, see Guiding Principles on Independence and Objectivity on its website, http://www.gartner.com/technology/about/
ombudsman/omb_guide2.jsp.

Page 8 of 8

Gartner, Inc. | G00249415