TECHNOLOGY increasingly forms an essential component of every sophisticated warehousing and logistics operation. The prudent development and use of such technology (including, but not limited to, warehouse management software, warehouse control systems, warehouse execution systems, transportation management software, and the like) can frequently distinguish one operator from another in the eyes of a prospective customer. Indeed, efficiency – one of the most critical qualities that any warehouse offers – can usually be linked directly to an organization’s technological savvy.

In light of the benefits and the importance of information technology (IT), warehouse operators and other third-party-logistics providers must have strong agreements in place relating to critical IT systems, particularly in light of the recent move to cloud-based services. This article provides an overview of the critical areas that are general to all IT agreements and those specific to outsourced or hosted (cloud) services. While many warehousing and logistics operators may be intimidated by such agreements, this overview will give you a starting place for your next negotiation with an IT services provider.

Originally published in 3PL Americas, Summer 2014.