The thing that baffles so many people about the market for warehouse management systems is how there can continue to be so many vendors of that category of software. Although the market has seen a large number of mergers and acquisitions recently, a surprising number of providers still remain active.

"I've been predicting—and analysts such as Gartner have been predicting—the demise of all these companies for years, but they're still out there," says Chris Barnes, a partner in the consulting firm MercerBarnes Associates and author of Warehouse Management Systems: Assessment and Selection. "I don't know how. There's about 300-plus companies, and about once a week I'll talk to someone who has a new package that they're trying to get promoted."

While this variety means that WMS buyers aren't locked into working with one or two big companies, it can leave them feeling a little like a grocery shopper in the cereal aisle: overwhelmed by all the choices.

With so many options—and more coming all the time—how can you ensure that you're selecting the very best product for your company? Here are nine considerations that can help you shape your decision.

The perception in the market is that all WMS providers basically offer the same capabilities, and to a degree that's true, says John Pulling, chief operating officer of WMS provider Provia. "There are some situations where one of us will have just a killer solution for a key vertical, and it's obvious that the product's better. But in a lot of situations, it's just not," he says.

Buyers need to seek out differentiators—that "killer solution," perhaps, or some function that solves a specific problem. For most buyers, the main consideration will be whether a product includes features that meet their particular business needs. Kirkland's, a Tennessee-based home décor retailer, for example, has a unique system for downloading orders and building picking waves. When the company was selecting a WMS, the ability to accommodate that system was critical.

Most solutions these days can be customized or modified to handle just about anything. With that in mind, Vice President of Logistics Todd Weier's selection team looked at each product's basic functionality and chose the one that came closest to meeting Kirkland's requirements. "I felt the closer you could get to their base functionality, the better the transition, the better the implementation, and the lower the cost would be," he says.

One way to assess the gaps between your requirements and a WMS system's capabilities is to run "scripted demos"—the warehouse equivalent of a dress rehearsal. These trial runs can identify a system's shortcomings, and what it might cost to address them. "A gap could be as small as a pinhole or as large as a sinkhole, and the only thing that can cover the gap is dollars," says John Sidell, principal with systems integrator ESYNC. "Is it a $1,000 modification or a $300,000 modification? Demo scripts can flesh some of that out."

Conventional wisdom says "best of breed" vendors offer the best functionality. But ERP providers say they've greatly improved the functionality of their WMS modules. "The reason why people bought a bolt-on WMS was because the WMS capabilities in ERP offerings were weak," says Jon Chorley, senior director at Oracle Logistics. "Well, that is absolutely not true anymore."

Buyers are no longer looking just at the functionality of the WMS, they're also assessing how well it integrates with other solutions, such as transportation management, order management, and labor management applications. "It's very rare today that we will sell just a WMS," says Chris Heim, president of HighJump Software. "Normally we are selling in conjunction with a visibility system, supplier-enablement system, or MES [manufacturing execution system]."

Buying several solutions from a single provider does cut down on integration and customization costs. Oracle and SAP argue that one advantage of working with an ERP vendor is that both supply chain execution software and back-office solutions will be operating off of the same data, so there are no worries about integration. That's why many shippers are putting their ERP providers on the short list of potential WMS vendors. "We're finding more companies are revisiting what we have to offer, even if they had made a previous decision for a best-of-breed vendor," says Tillman Estes, director of business development for SAP.

Ease of integration was a determining factor for specialty sporting-goods retailer Sports Giant when the startup selected Radio Beacon as its WMS provider. Of all the solutions the company considered, that one integrated best with Sports Giant's MAS 500 system from Best Software, says Sam Simkin, executive vice president and chief financial officer. Continued...

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