28 May OPEX vs. CAPEX- Understanding the Voxware Subscription Model
The Cloud has revolutionized the way companies acquire and leverage business process applications, and in 2012 Voxware changed the game by offering the first Cloud-based voice solution designed to improve distribution operations. Its viability hinged not only on outperforming existing on-premises solutions but doing so at an attractive and attainable price-point. For mid-sized distribution operations, which represent the vast majority of the distribution market, investment in voice solutions was cost prohibitive.
By restructuring aspects of the company and its supplier relationships, Voxware was able to reduce the upfront capital investment for new customers by 40%. By removing this budgeting barrier and offering a SaaS (Software as a Solution) model, Voxware was able to close deals and onboard customers faster and more efficiently than any other automation offering.
In addition to expediting implementation time, Voxware’s new subscription-based Cloud offering allowed customers to move from a CAPEX to an OPEX financial model for voice solutions. This sets operating costs (like rent and other regularly recurring costs), stabilizes the year-on-year budgeting process and eliminates CAPEX justifications. While this is especially important during challenging business conditions, it’s also something that is mentioned frequently by DC operations managers.
With an OPEX model in place, Voxware customers maximize their investment by leveraging additional benefits:
- No WMS necessary
- Operations without a WMS can easily and affordably realize the benefits of a voice solution.
- Minimal impact on IT resources
- A hosted solution limits strain placed on the customer’s IT team, relieving them from server/software installation and management, as well as providing a straightforward, one-time set-up. Additionally, the intuitive toolsets provided enable DC operators to manage the solution alleviating the need to rely on expensive consulting services.
- Cost effective/future-proof
- Includes all hardware/software, automatic software upgrades and hardware device refreshes, ensuring the latest technology is being used.
- Quickly scale usage up and down
- Allows customers to acquire additional capacity when needed (e.g., during a peak period when dozens of additional voice users are brought into the operation) then return that capacity later and only be charged for actual usage.
- Supply chain analytics
- VoxPilot enables seamless management of distribution operations in real-time, empowering management to make informed business decisions based on predictive and prescriptive modeling.
One of Voxware’s goals in deploying the industry’s first Cloud-based solution was to help its customers drive better business outcomes in a more efficient manner.
A specialty pet food supplier approached Voxware about deploying voice picking in its warehouse. Prior to the SaaS-offering, voice was unattainable based on constraints on capital expenditures.
The company needed to increase scalability to adequately manage peak loads, enhance productivity and safety for its employees, improve accuracy of product picking and delivery, and expand store locations without incurring additional costs.
Through its subscription-based pricing, this company was able to deploy Voxware’s Voice Management Suite and not only meet but surpass its audacious internal goals.
Puerto Rico Supplies Group (PRSG) is an example of a distribution company seeking to mitigate costs from the expensive up-front technology investment required by other vendors in the industry.
In addition to reduced costs, PRSG also sought real-time visibility into its distribution operations. With VoxPilot included in its subscription, the PRSG team was introduced and paired with an ideal solution.
“Having continuous access to the latest hardware addressed one of the key issues we were having with our previous voice provider. we were opposed to making such a large financial investment only to have to repeat this process over again in the future,” said Carlos Falcon, Business Planning Director, PRSG. “Having continuously enhanced Voxware software and the latest Zebra hardware while controlling our costs is something that we had hoped, but didn’t expect, to find during our vetting process.”
If you’re still using outdated distribution operations processes and are interested in learning how to control your costs and improve the overall experience for your customers, contact us today to modernize your warehouse. We’re here to help you improve your distribution operations.