When it comes to repairs, savvy automobile owners have long known they can get a price break and more personal service by bringing their car to an independent garage rather than the local dealer. Now, owners of some warehouse management systems (WMS) have that "outside garage" option as well. In the past few years, several third-party software maintenance firms have appeared on the scene to provide support for specific brands of warehouse management systems.
The trend first took root about a decade ago, with the emergence of third-party software maintenance firms for enterprise resource planning (ERP) systems. Among the better-known providers of this type of service are Rimini Street and the now-defunct TomorrowNow. The movement now seems to be spreading to more specialized systems.
Just as with independent auto repair shops, these third-party software maintenance shops generally charge a lot less than the vendor would. "You ask for modifications from the vendor and it's going to cost $175 to $200 an hour for their staff to do what you ask them to do," says Phil Obal, president of Industrial Data and Information Inc., an independent software research company based in Tulsa, Okla. "The third party can do it for less."
In addition to offering lower prices, third parties also go the extra mile in providing personalized service. In fact, it was user requests that sparked systems integrator eKin Systems Inc. to enter the WMS support business, says Imran Manzoor, a managing partner at the Milwaukee, Wis.-based firm. Manzoor's company provides full support to users of Catalyst International's WMS, including 24-hour on-call service. After Catalyst was acquired by CDC Software in 2007, eKin discovered that a lot of users were unable to find the kind of support they wanted, Manzoor explains, so eKin stepped in to fill the gap. The firm has since branched out into support for users of RedPrairie's and Manhattan Associates' warehouse management systems.
Another third-party software firm that provides support to WMS users is the Raleigh, N.C.-based Open Sky Group. Open Sky offers maintenance, training, and support for users of RedPrairie's WMS. The company's CEO, Curt Sardeson, and many of its staff members are former RedPrairie employees.
Sardeson says that although in one sense, his company competes with RedPrairie, it also serves as a kind of complementary service provider. He explains that a lot of his firm's work comes from smaller companies that want help modifying their software so they can, say, generate custom shipping labels or reports. Although RedPrairie provides its clients with tools they can use to customize their applications, many lack the necessary in-house expertise or simply don't have time to learn to use the tools. These companies often end up turning to Open Sky Group for help, says Sardeson. "We're the after-market alternative if RedPrairie is unavailable," he says.
Despite the apparent advantages offered by third-party software firms, some users remain leery. P.J. Jakovljevic, an analyst for the Boston-based software consulting firm Technology Evaluation Centers, says users are often reluctant to switch to outside support firms out of fear of burning bridges with the vendor. They're afraid that if something happens to the third-party firm, the vendor won't take them back as a customer or will charge a hefty penalty to do so, he explains.
Those concerns notwithstanding, smart distribution managers will start quietly checking around to find out if third-party support services are available for their particular WMS. At the moment, this option is available for a limited number of WMS packages, so their search may come up empty. But that could change in the very near future. This market is projected to grow over the next year.
