A while back I wrote a posting where I claimed that if a top-tier Warehouse Management System (WMS) has not been too heavily customized, the costs associated with an upgrade would be about 15-20 percent of the original implementation cost. But this is only true if we are not talking about the dreaded platform “upgrade”.
What is a platform upgrade?
Things change. And things in technology change particularly quickly.
I won’t list all the significant shifts in technology I’ve seen in my career. That is not the point of this article. The point is that a software vendor’s technology and product development teams eventually get to a place where they feel they are falling behind what the market is demanding, or that they cannot take their product to the next level, unless they make some fairly drastic changes to the core architecture. The software vendor comes out with a new product that in theory should be a major step forward, rather than just providing incremental enhancements. But the installed base is faced with a tough choice: go through a platform upgrade or go off maintenance.
Why is deciding to go through a platform upgrade a tough choice? Because you are not just installing patches of new software code supporting product enhancements, you are doing a totally new install.
I recently spoke with Joe Knausdorf, Senior Director of Technology at Lineage Logistics, about his experience in this area. Lineage Logistics has one of the largest networks of cold storage warehouses in the United States. Joe mentioned that Lineage had gone through an upgrade with its previous WMS vendor, and as you would expect, it cost about 15-20 percent of the initial implementation. The company experienced significant issues for the first six months, which led to painful business operations. And more than a year later, the company was still having problems.
Then about 12 years after Lineage had started working with this vendor, the vendor announced that it was coming out with a platform upgrade. The team at Lineage realized that they would be faced with a long implementation that would rival the costs of the initial implementation.
If a project is going to cost about the same as a brand new implementation, many companies decide they might as well explore other solutions, and in many cases, they end up switching software providers, which is what Lineage did. The company bought and installed a solution from HighJump Software (a Logistics Viewpoints sponsor) in 2008.
And then, HighJump announced a platform upgrade a couple of years ago. Switching from HighJump’s 9.x to 10.x versions would require a brand new install. But Lineage did not have a painful platform upgrade experience. The early days of planning began in December of 2011; the project was to be completed in May of 2012. This included two complete iterations of testing all business functionality.
When you see a six month project, you might think it was a big project, but it really wasn’t. The cost was only 5 percent of the initial HighJump implementation.
Further, once Lineage went live, the company experienced very few problems. Lineage has an internal metric that tracks defects related to an upgrade. This metric looks at all business processes touched by a system and measures support issues that are reported following the upgrade. Lineage had a 95 percent success rate on this metric. And the support issues reported were very minor; for example, forgetting to configure a printer during set up.
Joe reports they did not discover any bugs, and that after a couple of days all issues were resolved.
The smoothness of this upgrade also impressed one of Lineage’s key clients — one of the world’s largest retailers known for its technology savvy and process discipline. The retailer works with other 3PLs and has seen painful upgrades that impacted its service levels. The retailer demanded daily conference calls with Lineage where all fulfillment issues related to the technology were discussed. The first call lasted 10 minutes. The retailer complemented Lineage for having such a clean cut over and said no further calls were necessary.
Joe did make the point that he was very proud of his team and the thoroughness of their testing. But he also complimented the HighJump product. One core HighJump marketing message is that its WMS architecture allows its customers’ IT teams to take ownership of the product without requiring a lot of costly services from HighJump. Lineage’s experience would support those claims.