Infor: On-Prem & Cloud-Based Multi-Tenant WMS

In the distribution and 3PL industries, where efficiency, scalability, cost-effectiveness and adaptability are paramount, transitioning from an on-premises WMS system to a cloud-based, multi-tenant WMS solution can yield myriad benefits. This transformation not only impacts the bottom line but also streamlines operations, enhances security and accelerates time-to value. 

Here, Infor's Will Quinn delves into the high-level benefits of making this shift, while addressing potential disadvantages. Additionally, he explores how emerging technologies like AI, ML and multi-tenant cloud computing have been leveraged in the distribution & 3pl sectors in recent years. 

Difference between on-premises, single-tenant and multi-tenant ERP systems 

It's crucial to understand the fundamental differences between on-premises, single-tenant and multi-tenant ERP systems:

On-Premises WMS

“On-premises WMS systems are installed and maintained on a company's own servers and infrastructure. Security of the servers and data is the sole responsibility of the company,” explains Will. “They offer complete control and customisation, but require significant upfront capital investment. Server maintenance, system upgrades and security are also the responsibility of the organisation. Scalability can be limited by hardware constraints, making it challenging to adapt to rapid growth or fluctuations in demand and growth.”

Single-Tenant WMS

“Single-tenant WMS systems are hosted in the cloud, but each instance serves a single organisation,” Will continues. “They provide flexibility and scalability, as organisations can customise and configure the software to their specific needs. Maintenance and security costs are shared between the organisation and the cloud provider, which reduces some of the burdens of on-premises systems but may still require dedicated resources for management.”

Multi-Tenant WMS

Multi-tenant WMS systems are also cloud-based, but host multiple organisations on a shared platform where each company's data is private. They offer high scalability and cost-effectiveness, as infrastructure and maintenance costs are distributed among multiple tenants. 

“Customisation options are typically more limited to ensure the shared platform's stability and security,” Will says. “Meanwhile, updates and security patches are managed by the provider, reducing the organisation's IT overhead and total cost of ownership. Valuable IT resources can be diverted from maintaining physical infrastructure to providing a better customer experience.” 

Benefits of transitioning to cloud-based multi-tenant WMS 

So what are the top benefits of transitioning to cloud based multi-tenant WMS systems in the distribution & 3PL industries?

Total Cost of Ownership (TCO): 

“One of the most significant advantages is cost efficiency,” Will explains. “With a multi-tenant model, the expenses associated with hardware procurement, maintenance and upgrades are shared among multiple tenants, leading to substantial cost savings.” 

Cloud-based ERP solutions often follow a subscription based pricing model, allowing organisations to budget more effectively with predictable monthly or annual costs.

“However, multi-tenant systems may have limited customisation options compared to on-premises solutions, potentially requiring organisations to adapt their processes to fit the software's capabilities.”

Security

Reputable cloud providers invest heavily in cybersecurity, offering advanced security protocols and regular updates to protect sensitive data. 

“Cloud-based systems typically include robust disaster recovery plans, ensuring data backup and restoration in case of unforeseen events,” Will continues. “Yet organisations entrust their data security to the cloud provider, which can be a disadvantage if the provider experiences a breach or downtime. However, established providers prioritise security.”

Time to Value

Cloud-based, multi-tenant ERP systems can be deployed faster compared to on-premises alternatives, allowing organisations to realise benefits sooner. 

“The scalability of these systems enables businesses to adapt to market changes or expansion more rapidly,” Will states. “With a multi-tenant cloud WMS, your organisation is always on the most current version. Patches and security fixes are pushed out regularly and new capabilities are pushed out at set time intervals, allowing you to deploy them when your organisation is ready.”

Yet transitioning to a new system can require employees to learn new processes and interfaces, potentially causing a temporary productivity dip.

“IT professionals must transition from maintaining on premises hardware to learning the new capabilities periodically pushed out by the WMS vendor,” Will cautions. 

Emerging technologies in distribution

Over the past several years, the distribution & 3PL industries have witnessed significant advancements in emerging technologies, with AI, ML and cloud computing playing pivotal roles. 

“These technologies have evolved from cutting-edge to established necessary tools,” says Will. “AI and ML algorithms are increasingly used for demand forecasting. These technologies help organisations predict future demand patterns more accurately, optimising inventory levels and reducing carrying costs. Machine learning algorithms can analyse historical sales data to identify cross selling and upselling opportunities, enabling distributors to increase revenue.”

Cloud-based WMS systems leverage cloud computing to enable real-time data access and collaboration across the supply chain. This facilitates faster decision making and improves overall operational efficiency. 

“Cloud infrastructure provides the scalability required to handle the massive data volumes generated by IoT devices, enabling better tracking of goods throughout the distribution process,” he says. 

Transitioning from an on-premise WMS system to a cloud-based WMS solution offers substantial benefits in terms of cost savings, security and time-to-value for organisations in the distribution and 3PL industries. While there are some limitations, such as limited customisation and shared security responsibilities, Will feels that these can often be outweighed by the advantages. 

“Emerging technologies like AI, ML and cloud computing have significantly enhanced the capabilities of WMS systems, enabling more efficient and data-driven operations,” he says. “This transition is not only practical but also a strategic move for companies aiming to stay competitive in a rapidly evolving distribution landscape.”

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