The Retail Transformation Blog

Advice and insight to help retailers thrive in the new age of retail.

Return to blog index

How can retailers choose a strategic order management solution?

With increasingly diverse ways to sell and interact with a customer, traditional retailers are putting a greater emphasis on the importance of having a seamless omni-channel ordering and after-sales experience.

Online pure play retailers are also increasing their focus on the need to source, ship and track their customers’ orders quickly and efficiently in order to stay ahead of the competition.

The functional needs of an Order Management System (OMS) vary considerably from retailer to retailer. Whilst ecommerce, warehouse management and point-of-sale systems may have very clearly defined roles in the enterprise, the functionality of an OMS can often initially be delegated to one of these systems to satisfy a simple ordering and fulfilment proposition with limited customer and supplier touch points.

Knowing how a business will develop and use its transactional channels (e.g. web, call centre, stores) and fulfilment routes (e.g. own fulfilment centres, drop-shippers, stores) is the first step to understanding whether a dedicated order management system is required above and beyond what may be provisioned in a WMS, ERP or channel-specific solution.

Providing a consistent ordering experience for customers

An order management solution encompassing the right processes and technology provides the glue between channels, suppliers and customers and a single consistent view of orders and inventory across the enterprise. Depending on the functional needs of a business, a well-executed OMS strategy can enable a business to:

  • Provide a common, predictable customer and purchase order lifecycle that applies to all channels and suppliers and presents a consistent customer experience. It also delivers a clear process for future expansion to new channels and suppliers.
  • Allow orders to be serviced and supported independent of the channel in which they were placed. The customer can benefit from placing orders via one channel and be able to track, query and update orders on other channels.
  • Have a complete picture of inventory in the enterprise, allowing for more accurate demand and replenishment forecasting as well as intelligent routing and allocation based on ordering behaviour. Furthermore it allows raising and tracking of purchase orders with suppliers in order to offer accurate stock dates to the customer when providing back ordering.
  • Introduce system support to model complex customer interactions that may otherwise have been poorly supported through manual processes. Exchanges, repeat orders, return handling, delivery splitting and available to promise inventory are examples of services that can be realised in this manner.
  • Provide and manage value add services such as installation, warranty and delivery.

Identifying the needs of the business and the benefits an OMS can bring is an important first step but it is equally important to understand what solution options there are and how these best complement the business strategy.

Choosing the right OMS technology

Until relatively recently, the customer order management marketplace was dominated largely by IBM’s Sterling order management solution, but in a world where time to market and cost is increasingly important to retailers this dominance has been challenged by smaller players and SaaS solutions.

Heavyweight OMS providers such as IBM’s Sterling and Manhattan Associates’ Distributed Order Management software provide rich but complex toolsets that allow a business to model every facet of their ordering and inventory lifecycles as well as the ability to cope with high volume operations on a global scale.

Best suited for businesses with a long term vision for growing their channel and supplier base as well as the resources to invest in developing the product to best suit their needs, these are the choice of large retailers often with a multi-national presence.

Other packages and software as a service (SaaS) solutions such as OrderMotion and eBay Enterprise Order Management occupy the second tier of the commercial marketplace and offer an attractive point of entry to retailers who want a dedicated order management solution.

These solutions may not provide the level of customisation and flexibility that the larger scale solutions do, but if a business is willing to compromise then they can offer an attractive cost/feature ratio.

This space is also being increasingly challenged by ecommerce vendors such as Hybris (SAP), Intershop and Salesforce Commerce Cloud (formerly known as Demandware) who recognise the value add of a stand-alone OMS offering to complement their existing ecommerce packages and services.

For retailers that seek the ‘perfect fit’ OMS that can be tailored to their business processes but are dissuaded by the cost, time and resource investment that comes with packages such as Sterling there is a third option which is to build rather than buy.

By focussing on the requirements that deliver the real value that matters to the retailer and working with the right systems integrator it is possible to deliver an OMS that meets the immediate business needs for a fraction of the time and cost of a large package, and offers a closer fit to the business requirements with less compromise.

The availability of tried and tested technologies such as Spring, Mule ESB and Tomcat which come at no cost to a retailer has made this option ever more attractive.

For multi-channel or multi-supplier retailers the benefits of a centralised view of orders and inventory is clear, but identifying the requirements and needs that generate real return on investment is harder to do. Understanding these needs, combined with what the market can offer, is critical to the success of choosing and implementing an order management strategy and solution.

FIND OUT MORE about Javelin Group’s Order Management Systems practice.