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"A vendor-customer integration may not result in much 'out of the box' thinking," agrees Rader, "while a systems integrator can pick up on design similarities across two different industries, or suggest a good fit for a customer's warehouse that the vendor or the customer overlooked. They're there to meet the customer's design requirements, create a smooth installation process, and help the customer get the most out of their WMS."
Systems integrators also contend that WMS integrations are more complex than many shippers realize. (See the chart on Page 79.) The biggest challenge for software buyers, Sidell says, is redefining business processes to make the best use of WMS packages, which are less customized than they were 10 or 15 years ago.
"Back then, a ton of work was done on the software to make the application fit the environment, but these days about 75 percent of the work required to plan out the implementation and how it's going to be converted into the operation has fallen back to the client," Sidell says. "Those companies turn to systems integrators to help build the roadmap for the resource plan and the executables on the project."
Once shippers have decided to work with an integrator, "boutique" systems-integration firms that focus on specific areas, such as WMS, are a popular choice. Pulling says these smaller integrators, such as Q4 Logistics and enVista, are in demand right now—perhaps more so than their larger, generalist counterparts, the big consulting firms and global IT product developers. Some Will, Some Won't
Will the trend toward do-it-yourself integration continue? Yes and no, says one analyst, who believes large and small companies are moving in different directions. The DIY approach probably will not include "tier one" ($1 billion-plus in annual revenues) and "tier two" ($250 million to $1 billion) companies, says Steve Banker, service director of supply chain management at ARC Advisory Group in Dedham, Mass. By contrast, "tier three" companies (below $250 million), which typically buy low-budget WMS packages, will increasingly embrace DIY integration, he says.
"Vendors who are selling $30,000 to $50,000 systems generally can't afford direct sales forces, and they rely on the partner channel to sell, implement, and integrate the software," Banker explains. "So while I see a declining role for systems integrators with tier one and two firms, usage among tier three firms is growing."
EnVista's Rader has other reasons for being bullish on the outlook for systems integrators. One reason is that shippers' IT budgets are loosening somewhat. "[Software buyers] tried to do it on their own—or bridge the gap with the help of a vendor—over the last few years due to budget constraints," he says. "With the economy picking up, we're starting to see a shift back to using systems integrators."
| Author Information |
| Bridget McCrea is a freelance writer who often covers supply chain technologies and distribution strategies. |
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When the team at TESSCO Technologies sat down in May 2004 to discuss an upcoming warehouse management system (WMS) installation, one of the issues they discussed was whether they should hire a systems integrator or work solely with the WMS provider, Provia Systems.
"We knew we didn't have the expertise in-house," says Steve Marshner, project manager for the Hunt Valley, Md.-based firm, which distributes some 34,000 wireless products for more than 450 manufacturers from its Hunt Valley and Reno, Nev., warehouses. "We also knew that that the software provider probably wasn't the best choice for the integration either."
Team members recognized that a software vendor's expertise lies in developing its software, not in the process design and implementation on the warehouse floor. "We looked first at using them to handle all of the extra labor associated with the integration, but as we got into it, we found that aspect would likely have been farmed out to someone else anyway," Marshner recounts. "It only made sense to put a system of checks and balances in place that included both a software provider and an integrator."
TESSCO brought in systems integrator Q4 Logistics to collaborate with the vendor. Perhaps the most valuable service Q4 provided was tying the distributor's proprietary order-entry system into the new WMS. That was a critical step, as the WMS would be receiving all of the data it needed from the order-entry system. Working with the homegrown system, which Marshner calls "very complex," was no easy task, and the integrator has had to make several "tweaks" since the WMS got up and running in March.
"We've had to go back and fine-tune the design," says Marshner, who points to the software's complex release system, which dictates the priority of orders based on shipping upgrades, as a particularly sticky point. "It's a continual challenge for us."
Still, Marshner is pleased with the software's performance and the 10-month installation process, and says he'll definitely use a systems integrator the next time out. "It allowed our people to concentrate on their core competencies, and gave us a resource to tap when 'filling in the holes' during the integration process," says Marshner. "We definitely got more bang for our buck." | | |
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