The Criticality of a Strong Order Management Solution in Commerce

For years, I struggled with the industry's separation of digital and physical commerce. As a project director for a leading commerce-focused technology company, I remember struggling with the concepts around purchasing online or purchasing in-store, and why the two couldn't work together. In 2007, I remember spearheading an effort to introduce what was then the very first version of our OMS, which incorporated the concept of purchasing product when it wasn't physically available for fulfillment from an alternate location, whether it be a store or a warehouse. Little did I know that the world of omni-channel retailing would explode a few years later, driving new technologies that would balloon and scale immensely in functionality compared to the application that I worked on many years ago. Which bring us to today. The modern Order Management architecture has become the backbone of the omni-channel commerce industry. While many software companies brand this with different names and titles, the goals of omni-channel commerce are the same: to improve and enable customer experience through different channels or touchpoints (both physical and digital), and ensure that they can acquire products and services seamlessly (without friction).

But how can a company support this concept without the right technologies in place? How can they ensure that inventory is available and exposed across all of the different sales channels where their customers shop? How can they track sales regardless of where the customer purchases? How can they ensure that the orders are consolidate, and routed logically to the lowest cost fulfillment centers? The truth is...they can't. While an eCommerce system, a Retail system, a B2B system can all connect directly to an ERP or WMS systems for fulfillment, the logic to prioritize, consolidate, route, and track customer orders across different channels simply doesn't exist in the traditional ERP and WMS platforms. And thus, the OMS does the heavy lifting for all of these elements.

Whether orders are placed from a mobile device, a laptop or macbook, a call center, or within the four walls of a store, the modern order management system (or OMS, sometimes also referred to as a DOM) provides the framework to receive, prioritize, consolidate (or deconstruct) and route the order to the appropriate fulfillment center for rapid delivery to the customer. It can satisfy fulfillment requests for B2B and B2C product, and stands as the primary source for status from time of order placement through delivery of the product. Salespeople and Call Centers rely on Order Management systems to provide updates to customers, and also handle returns. Distribution centers rely on Order Management systems to consolidate orders and initiate picking requests from within their Warehouse.  And the end consumer can rely on the Order Management system to expedite the fulfillment process to ensure they're able to pick up or receive the product even up to the day that the order is placed.

How an OMS reduces Cost
There are a number of ways that an OMS can save a company money. The first is in technology - rather than a choice of developing a highly complex, and often times delicate, cobweb of interfaces and middleware to support order processing, the OMS provides a standard infrastructure with common APIs to integrate to different channels. There are significant savings in hours of development, different middleware solutions, and maintenance across platforms typically required by an omni-channel approach. But the OMS also reduces labor in customer service and warehouse management. By offering full visibility to order history and status, the customer service agent can manage the order without having to search and update across systems, and can also intercept and redirect, where necessary, to ensure the customer is getting the best possible service when they call in. They can also leverage the OMS to produce returns, with integrated shipping labels and cost considerations. Also, both hardware and paper costs can be reduced as receipts are typically available online and through e-mail, and there is no longer a need to print. 
From a warehousing perspective, the OMS can prioritize order fulfillment requests, routing to the most cost effective location for distribution, and consolidating multiple orders to also save on costs. But it also can contribute to lower error rates in fulfillment by leaning into real time inventory values available from multiple systems. From efficiencies gained in both processing and fulfillment of orders, to reduction in systems and complex interfaces, the OMS can significantly reduce both operational and technology costs for a commerce based company that has multiple sales channels.

How an OMS drives Revenue
But cost savings (alone) aren't enough. OMS's should be generating revenue as well. By exposing inventory across channels, the 'endless aisle concept' is now available to eCommerce sites, brick and mortar stores, and even end consumers. And suppliers and vendors are also jumping in to expose their inventory for seamless fulfillment and tighten up the supply chain process. In fact, we have seen more vendors participation in drop ship direct to customer through integrated OMS functionality in 2020 than ever before. By exposing inventory across channels through a single source, the OMS is driving greater sales volume, and reducing the notion of stock outs dramatically. But that's not all - as the OMS supports a cross channel view of inventory, it also integrates all of the customer's shopping behaviors and trending for a level of visibility that the call center or salesperson can view for upselling based on previous purchase history across channels. While traditionally a function of marketing and CRM, this capability brings functionality direct to the person (or system) interacting with the end consumer to ensure a personalized experience, regardless of where they do the bulk of their shopping.

It's clear that the cost savings and revenue recognition achieved through implementing an Order Management solution can bring significant enhancements to a B2B or B2C commerce based business. Ascent, a leading consulting and implementation firm in North America, specializes in helping companies with their commerce strategies, procurement of best-in-breed systems, and implementation with a proven methodology to ensure both quality and timely delivery of leading commerce technology solutions. Want to find out more? Please contact us at [email protected]. We would love to help you and your business recognize revenue growth, cost savings, and customer loyalty and help you meet your commerce goals for years to come.

Written By:

Jason Stratton
Managing Partner
Ascent Enterprise Solutions