Replatforming Your Ecommerce System? Don’t Overlook Order Management

Feb 05, 2016 3:16 PM  By

ecommerce fulfillment, ecommerce operations, order management system

For many ecommerce retailers, the website replatforming process eventually becomes a necessary task. It’s a complicated undertaking, but several factors – the challenge of updating legacy systems, the need to add new site features and the desire for a fresh start – can make the process necessary and ultimately beneficial.

In fact, according to a July 2015 finding from Forrester Research, 54% of ecommerce executives say replatforming is a top priority during the first half of 2016.

When embarking on a replatforming project, a critical element that cannot be overlooked is the incorporation of a dedicated Order Management System (OMS). This is a vital step that must be taken at the outset of the process to ensure that a retailer has a strong understanding of inventory, availability and fulfillment optimization to maximize revenue and deliver a superior customer experience.

Why Is a Dedicated OMS Important? 

When faced with the challenge of order fulfillment, it’s not helpful to see a product availability picture from a standalone perspective. For example, if a consumer is interested in a value-added service like gift wrapping or next-day delivery, those requests affect the availability picture. Incorporating a dedicated OMS—which considers order constraints when providing inventory availability—enables retailers to furnish customers with a more realistic inventory picture. This prevents disappointment for customers and provides consistency in setting expectations throughout their ordering experience.

Today’s retail world is increasingly demanding, and simply being able to see items online is no longer sufficient to meet changing consumer demands. Retailers also want to provide different tiers of availability for their shoppers – is an item available right away? In two days? If it is on backorder, then when is the earliest it can be available? Can it be shipped next day if the customer adds gift-wrapping? Can it be shipped to a store close to the customer?

A dedicated OMS has the ability to show product availability based on network availability and order constraints, delivering a level of visibility that a native ecommerce system cannot provide. Typical order management capabilities already built into an ecommerce platform aren’t powerful enough to ramp up to omnichannel needs. Such systems lack the capability necessary to provide the full picture.

Cross-Channel Order Management 

Another layer of complication comes from the inclusion of brick-and-mortar stores as fulfillment centers. Buy online, pickup in store isn’t a luxury anymore. This service has become a basic requirement, not a differentiator. A dedicated OMS, providing real-time availability based on demands generated from other channels, is required to make it feasible.

The ability to lower shipping costs without compromising service level agreements (SLAs) is something today’s retailers strive for. For example, if an order contains multiple items, a dedicated OMS can help achieve this by utilizing all channels through an intelligent sourcing and allocation algorithm using a fulfillment optimization engine. The OMS also ensures that the shipments were consolidated to perform fewer payment settlements, reducing the transaction fees for the retailer.

Today’s customers are looking for a channel-agnostic engagement, and the call center provides an excellent opportunity for retailers to engage with and provide a superior customer experience. Incorporating call center requirements into the replatforming process is becoming increasingly common. With 90% of incoming calls being order related, it’s critical for retailers to have an OMS that features a complete call center solution to fulfill all actions across channels. These systems bring together online, in store and call center channels to provide a single brand experience. In addition to maximizing availability and profitability through optimization, an OMS also provides a 360-degree view of a customer’s interactions with a brand, helping create a consistent, high-level customer experience while building brand loyalty.

A dedicated OMS also integrates with other enterprise solutions across channels, like store fulfillment and warehouse management, to solve complex omnichannel order orchestration problems. The integration assets built with these cross-channel systems to a dedicated OMS provide a jumpstart in accomplishing a retailer’s implementation goals.

Why Now and Not Later? 

An OMS should be incorporated at the outset of a replatforming project to avoid the challenge and cost of retrofitting. Attempting to retrofit an OMS after the replatforming process is complete is expensive and leads to more problems than a basic integration. A piecemeal approach also makes it difficult to scale up to functionality. An advanced OMS is not a cookie cutter solution; it is tailored to meet specific needs. If retailers fail to consider requirements at the outset of a project, they are left with an ecommerce website lacking important capabilities, which means missed sales and losing omnichannel abilities.

The bottom line is that order management can’t be separated from ecommerce – the two must be addressed at the same time because they are interdependent. If retailers fail to think about all the requirements upfront, they will have a system running without all the necessary capabilities.

The argument is clear: Incorporating a sophisticated, dedicated OMS into a website replatforming project is critical to delivering superior customer service, capitalizing on revenue and omnichannel opportunities and avoiding costly retrofitting projects.

Karthik Marudur is director of product management at Manhattan Associates