The top five benefits of an order management system

The top five benefits of an order management system
OrderDynamics’ Charles Dimov explains what’s needed to simplify omnichannel retail

Caspar Herzberg |

This article was originally published by OrderDynamics

First of all, an order management system (OMS) is key to omnichannel retail. It is the core system that:
Accepts orders regardless of source (order processing)
Orchestrates the order for fulfillment
Routes products from the best inventory location
Provides real-time inventory visibility (for employees and customers)
Processes returns
Provides management with controls and feedback.

Step one: Figure out if you have one. If you are a retailer processing US$20 million or more in orders and/or have 20 or more stores, then you need an OMS. Whether it is ours or someone else’s, do not hesitate! 

Step two: If you don’t already have an OMS, consider the following benefits of OrderDynamics system.

1. Best-of-breed or unified – your choice
Most order management system vendors push their singular unified commerce solutions. Unfortunately, they push their systems, whether or not it is the right choice for the retailer. One customer told us how infuriating it was that a Tier 1 vendor sold them an OMS that let them down during Black Friday. Their system failed but the sales representative continued to pitch them to replace their enterprise resource planning (ERP), warehouse management system and other existing systems. Then, after all those upgrades, the system would work properly. Fortunately, the retailer did not trust the vendor enough to invest several more million dollars into a growing disaster.

Retailers need choices. Maybe you want a fully unified commerce/unified supply chain solution. If that is so, then you want a full system, like the one offered by Tecsys and OrderDynamics. It provides and unifies:
Warehouse management
Full inventory management
Order management system
Demand planning
Transportation management (shipping rate brokering)
Ties seamlessly with the front-end ecosystems 

However, not all retailers need or want to replace their entire existing infrastructure. That’s where a modular, best-of-breed approach works well. Unlike most of the competitors, the OrderDynamics OMS seamlessly connects with other technologies. It integrates and unifies your existing business operations and technologies. In fact, the OMS connects to the entire retail technology stack that relates to products and orders. In this sense, the order management system can breathe new life into your existing infrastructure.

2. Seriously advanced tech – lets retail fly
Retailers must be wary of old technology that is being sold as new and light OMS technology. There are no mid to enterprise level retailers who should put up with light OMS technology. Yet, there are plenty of systems that are rated as Tier IV. These are custom-coded solutions or just light solutions that won’t deliver during intense shopping periods such as Black Friday, CyberMonday and the Christmas season. If you only have between one and five, it won’t be a problem. However, if you have 20 or more, then Tier IV will not work.

Analysts views and advanced features
Look for tech leaders that are recognised by Gartner, IDC, IHL, RSR and EIQ reputable analysts. These analysts cover the retail technology and OMS markets and are thorough in their research. Every vendor will tell you that their retail tech is the latest and greatest but be wary of what they tell you and look for proof. 

Look for advanced OMS features like:
Order consolidations (for ship-from-store efficiency)
Pick, pack and verify (for ship-from-store effectiveness)
Pre-orders/Advanced orders capabilities
Shipping rate brokering
Fraud deterrence
Inventory segmentation and virtualization
Real-time inventory visibility (including safety stock and incoming goods)
Advanced analytics
Order simulator or demand planning integrations
Split payments
International: multi-lingual, cross-border orders, multi-currency, double-byte characters
Scalability (should be beyond one million single line order per hour for Black Friday)
Returns management (in-store and real-time inventory updating)

Also, read the handy guide ‘Will the REAL OMS Please Stand Up!

3. For system admins NOT coders
OrderDynamics has put tremendous effort into developing a no-coding system. After the system is integrated with your other retail technologies, no coding is needed. The idea is that all OMS should be fully configurable by the systems administrators. No retailer should ever need a specialised coder to update their system. This includes enabling new features. If a new feature becomes available it should be useable immediately. That’s what an OrderDynamics OMS delivers.

This is part of the idea of buying out-of-the-box technology that is ready to go. Good cloud-based order management software doesn’t need a platform deployment, followed by coding for the OMS application. It uses industry best practices. The system is ready to be used with standard procedures and workflows.

Vendors selling platforms that you have to custom code tell customers that they have an out-of-the-box solution. But beware! 

“We could buy SAP, for example, but noone uses vanilla SAP out of the box – everyone configures and customises it,” said Sahal Laher, chief digital and information officer at Destination XL Group. “Instead, we are avoiding costly, time-consuming customisation… using a no-code system.”

4. Multi-tenant but NOT on AWS
Today, software-as-a-service (SaaS) systems are the industry standard. OMS must be continually updated. Multi-tenant systems follow this philosophy, as all clients are on the same, latest version. Naturally, the vendor should also adhere to multiple updates, on a continual cycle. Ideally, you should look for at least six annual releases.

Tightly associated with this is to also inquire about the cloud your system is on. As a retailer, you don’t want to fund your competitors. OrderDynamics order management technology is run on the world-wide Microsoft Azure cloud. Microsoft has a commitment to support retailers, not compete with them.

5. OMS designed for retail
Finally, ask vendors about their roadmap. After politely listening to their pitch, ask about how much of the roadmap is customer-centric. In other words, has the vendor used customer input to develop their technology? OrderDynamics does exactly this. In fact, over half of the roadmap is based around customer-centric solutions. This way, every client on the system benefits from the best practices of a group of retailers.

Ask how long it would take for a feature request (FR) to be delivered? Many vendors in the OMS space will either laugh or try to avoid the question. In many cases, you are probably just going to be too small for them to take your FR seriously. Look for the vendor that will take you seriously.

OMS – Mission critical
Today’s retail industry is a complex landscape. Customers want you to be flexible and they want to be instantly recognised across the multi-channel network. A growing trend is to order online and pick up in-store, as shoppers want to save time. They expect great customer service and want their order status sent out to their favourite communication medium. As such, we are now in an omnichannel retail world. To work with all the new sales channels while juggling fulfilment options requires an OMS. The system you choose isn’t just managing orders anymore. It goes beyond order and inventory. Today’s systems must be advanced tools to help you manage customers and make the buying journey seamless. Ultimately, you need a powerful and advanced system. OrderDynamics delivers these systems to help make omnichannel retailing a reality. 

Charles Dimov is vice president of Marketing at OrderDynamics

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