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Warehouse Management Software: On-Premise and Cloud-Based WMS Comparison

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The great debate regarding cloud computing has raged on for more than two decades. It extends into almost every market, niche, and line of business imaginable. It includes warehouse management systems (WMS), which can use an on-premise system or cloud-based software.

Many people wonder when it comes to cloud vs. on-premise: which warehouse management system option is better? Both of these systems have clear advantages and disadvantages that lend to their side of the debate. Consider a few of these pros and cons.

Two workers in a warehouse using management software on a tablet.

On-Premise Warehouse Management System Advantages

It’s surprising that many businesses still fully support on-premise systems when many other markets move forward with cloud solutions. Two of the main reasons for supporting an on-premise WMS are greater customization and integration options. Another advantage is that an on-premise system will only require an upgrade when you want to see improvement or expand operations.

On-Premise Warehouse Management System Disadvantages

Those companies who have already spent many years with their on-site WMS may find little reason to merge into the cloud-based world. However, if they haven’t yet made that commitment, then the initial cost and time commitment may be too daunting. The cost of proprietary hardware, custom implementations, and licensing fees can be substantial.

Advantages of Cloud-Based Warehouse Management Software

A business that hasn’t already poured its time and funds into an on-premise warehouse management system will likely find that a cloud-based system’s advantages are significant enough to warrant their investment. They are initially cheaper, faster, and easier to use.

Most cloud-based systems have a variety of configuration options that are easily adjusted. In comparison, an on-premise system may offer more customization options as a whole, but it can take months or years to implement those changes fully. You can configure a cloud-based system in less than a day.

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Disadvantages of a Cloud-Based WMS

One primary concern that businesses have regarding cloud-based systems is the potential for errors due to internet latency. Even a 500-millisecond delay could cause problems. In the long run, the subscription-based models can cost more than using an on-premise system. It’s especially true with a moderate-to-high complexity system.

Which technique would work best for your particular business is something you will have to decide for yourself. A cloud-based software tends to offer more flexibility and security, but potential errors could arise because of the reliance on the internet. As for an on-premise system, they are reliable and accurate, but also more expensive and time-consuming.

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