Order management systems represent a critical investment in retailers’ efforts to unify omni-channel strategy and operations. Evaluating which OMS providers and systems have the capabilities to deliver on your unique requirements can be quite an arduous process.There are a host of considerations to evaluate when selecting the right OMS software for your business. Some OMS providers underestimate OMS integration complexity, others tout a single platform when they were never built on a single data model, and most cannot handle the full range of omni-channel capabilities to truly unify commerce. No matter your unique business requirements, make sure you learn the right questions to ask so you save yourself and your organization future headaches.
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Table of Contents
- The Importance of OMS
- Secret 1: Many OMS Providers Underestimate Integration Complexity
- Secret 2: Most OMS Aren't Delivered on a Common Platform
- Secret 3: Few OMS Solutions are Omni-Channel Enabled
- Secret 4: Not all OMS Can Handle Omni-Channel Fulfillment
- Secret 5: On-Premise to Cloud "Upgrades" Are Actually Entirely New Implementations
- Secret 6: Not All OMS Can Scale Automatically
- Secret 7: Bigger OMS is Not Necessarily Better
- Conclusion: Cut Through the Hype
The Importance of OMS
In the Age of Amazon and in the face of mounting customer expectations, retailers must rapidly enable customer-centric unified commerce. A next-generation order management system (OMS) is critical to the customer experience and makes the difference between thriving and merely surviving in today’s digital age.
An OMS is key to any unified commerce strategy; the right OMS will enable buy, fulfill and return anywhere, customer-centric commerce.
According to Boston Retail Partners,
"A single order management solution provides many benefits to help solve the challenges facing retailers as they try to offer a unified commerce experience to their customers, including increased sales by offering more purchasing options and decreased costs by simplifying the store-level technology environment."
However, not all order management systems (OMS) are created equal.
Many OMS providers promote their applications using very similar language, making it difficult to ascertain what is real and what is smoke and mirrors, blatantly untrue or vaporware.
Providers will tout that their systems are built a certain way, can integrate a certain way, can operate a certain way and can enable certain critical processes, when they cannot.
Selecting the right OMS in the cloud will mean the difference between rapidly enabling unified commerce at least time to value (months versus years) and at least cost.
Secret #1: OMS Integration Complexity is Vastly Underestimated
To unify commerce and meet consumer expectations, retailers need a next-generation OMS – yesterday. However, if you talk to retailers who have undergone an OMS integration, you will find that it takes an average of 18-24 months to get up to speed with an integrated OMS. Most solution providers do not openly share the details around integration complexity, and many retailers don’t know to ask about it.
Why is integration a key consideration and a critical success factor?
- Some solutions don't work as designed. In order to actually work as designed – delivering enterprise inventory visibility and fulfillment and a single view of the customer, inventory, item, order, and payment – an OMS must integrate with 6-20 or more other, bifurcated systems across the enterprise (e.g., retail, supply chain, ERP and enterprise business applications) and must be able to move as many as 150 different files across these systems to transfer the data required to unify commerce.
- Nearly all OMS solutions on the market today take 18-24 months to integrate, consuming valuable internal IT resources and dollars. In contrast, a next-gen OMS built on an integration Platform as a Service (iPaaS) alleviates integration complexity. Even retailers with the most complex integration situations get up and running within 16-20 weeks. When it comes to iPaaS, some companies promote it, but few are actually built and delivered in an iPaaS framework.
- On-premise proven is not the same as cloud proven. In a time when the “retail fast” are eating the “retail slow” and agility is everything in the race to unify commerce, look for an OMS that takes an “integration first” approach to customer-centric commerce. It can mean all the difference in your ability to execute and answer the customer promise in a matter of months versus years.
According to Forrester, end users must “Consider the actual capabilities available to solve the agility, automation, and cost issues between partner onboarding portals, cloud solutions, business activity monitoring, and B2B managed services.” (The Future of B2B Integration, Forrester, Henry Peyret, September, 29, 2017)
Secret #2: Many OMS Providers Say They Deliver Unified Commerce on a Common Platform But Very Few Actually Do
While a single platform and data model are absolutely required to unify commerce, there are very few providers that have OMS on a single platform and data model.
To unify commerce, your OMS must deliver a single enterprise view and a single version of the truth for item, order, inventory, payment, shipment, carrier tracking and customer. This is only possible when an OMS is built strategically from the very start on a common platform and data model.
While many cloud-based OMS today are marketed as a single platform solution using a common data model, the reality is:
- DOM solutions that have historically been built for and delivered on-premise are not up to speed and are not yet delivered on a common platform and data model. These providers may be future thinking on their marketing message, but they lag far behind in the actual development and delivery of a single platform OMS. (If you are thinking of upgrading your on-premise OMS to the cloud, be sure to read Dirty Little Secret #5!).
- Most of the other vendors touting an OMS on a single platform have obtained their OMS solution by acquiring another company and then have cobbled that cloud OMS together with other applications behind the scenes. Again, OMS solutions inherited through acquisition are NOT built on a single platform or data model, despite saying otherwise in their marketing message.
These solutions will take longer to integrate, are harder to scale and will cost more in the long-run. Typically, these solution providers will have had success in another solution area (POS, for example) but will not be known for OMS or have a multitude of referenceable OMS clients.
OMS is the new POS, impacting every point of customer service across commerce and supply chain fulfillment processes. OMS solutions inherited through acquisitions are not on a common platform or data model, and these providers often struggle in customer service aspects such as call center and customer support due to lack of a common data model.
It is vital to know how your potential OMS provider built and delivers its solution in this make or break time in commerce. So, what do you look for?
The OMS providers that are delivering unified commerce solutions on a single platform and data model will be able to prove several things to you as part of your evaluation:
- They have referenceable customers and will have delivered OMS in the cloud in 20 weeks or less.
- They'll be able to show the code set and prove that the solutions on the platform are built on the same code.
- Their solution will not have sprung up or grown from an existing on-premise solution or from an acquisition (even from several years ago), but they will be initiated and built from the start based on a single, unified commerce platform strategy.
Solutions built on the same architecture, code and platform will integrate, scale and innovate faster - and at the least cost. OMS built on one code base can become a competitive advantage for your organization.
OMS is the new POS, impacting every point of customer service across commerce and supply chain fulfillment processes.
Secret #3: Not All OMS Solutions Are Truly Omni-Channel Enabled. An Integration Framework is Required.
Be sure the OMS you are looking into can manage the complex flow of data and the full life cycle of an order. Many OMS cannot do this because they are not built on an integration framework.
If the architecture does not support the flow of data, you will end up with point-to-point integration, which is extremely expensive in the long run. To overcome these constraints, you will likely find it is necessary to buy an enterprise service bus (ESB) to integrate bifurcated solutions, adding cost and time delays.
Consider how customer expectations and resulting retail technology requirements have evolved over the last ten, and especially five, years. With an integration framework, users benefit from functionality updates without having to upgrade their technology. This is critical for thriving in the digital age, keeping costs low, and providing fast time to value and least internal integration pain. If you want an OMS that will take you further, faster, longer – an integration framework is required.
During the selection process, remember to ask, “Do you have an embedded integration framework that is written on the same code base?”
Most OMS providers have missed the boat by not building their OMS on an integration framework.
Secret #4: Not All OMS Can Handle Omni-Channel Fulfillment
Some OMS solutions handle ship from store and buy online/pick up in store (BOPIS), but they do not have an integrated managed file transfer solution (EDI) which is necessary to enable vendor drop ship.
If you want to offer endless aisle and expose all the inventory in your network to improve customer service and profitability, you will want to look for an OMS with an integrated EDI solution that enables vendor drop shipping.
Along those lines, if you are selecting POS alongside your OMS, you will want to look for one that enables omni-channel returns and multiple transactions on a single receipt. This too is only offered by a few providers.
Secret #5: "Upgrading" From On-Premise OMS to the Cloud is Actually an Entirely New OMS Implementation
“Have you considered upgrading your OMS to the cloud?” This question from your current OMS solution provider may sound fairly innocuous and straightforward. However, there is no such thing as an upgrade from an on-premise OMS solution to a cloud OMS. Consider these points:
- Nothing about your OMS will remain the same except the brand name of your solution provider. If you move from on-premise to the cloud, you and your organization will undertake a a full-blown, new OMS integration and all that comes with it.
A solution provider may downplay this fact and will likely even incent you to move to the cloud sooner rather than later. They will tell you that it is advantageous to use the same provider for multiple solutions or even offer you a discount for bundled solutions. However, the least cost and fastest time to value solution will likely not come from your existing OMS/DOM provider that is just entering the cloud market.
- The feature and function sets of your solution provider’s existing on-premise OMS/DOM and its new cloud OMS likely are not the same. Be sure to do your due diligence and match feature and function from old to new.
There is no easy “upgrade” path for OMS to the cloud. The reality is that when switching from on-premise to cloud, your organization will start at zero.
If moving to the cloud is part of your organization’s unified commerce and IT strategy, complete a comprehensive review of the cloud solutions currently on the market to ensure the solution chosen will meet your long-term requirements and deliver the results you need in the timeframe you need.
Secret #6: Scalability is Key to OMS ROI
If the OMS is not strategically developed for the cloud from day one, dynamically scaling the OMS (up or down) to meet business growth or other changes will be difficult. Adding hardware to rapidly scale or respond to peak fulfillment will be required.
An OMS that auto scales vertically and horizontally and can dynamically add horsepower (memory and data storage) to manage peak fulfillment, rapid growth or retail network updates (store locations, 3PLs, DCs, etc.) is a competitive advantage as it is able to easily respond to changing business requirements.
Consider this insight from Tom Enright of Gartner:
“Embrace new technologies, scalable and flexible architecture and do not be short-sighted with immediate gains. Instead, think about long-term business benefits and growth.”
Secret #7: Bigger OMS is Not Necessarily Better. Faster is Almost Always Better.
For mid-sized and even enterprise markets, the bigger OMS provider is typically not better.
Faster time to value is even more critical for the mid-sized retailer playing against the giants. Your customers do not have the patience to wait a year or even two for your organization to play catch up, which is the typical timeframe for cloud OMS implementation.
Conversely, what would it mean to your organization and to the customer experience and resulting sales results for your company to unify commerce in only a few short months? In our estimation and from the news headlines, it means a lot.
One cloud OMS provider is consistently implementing a next-gen OMS for mid-size to enterprise retailers and distributors in 8-12 weeks. Think about this – those organizations have unified enterprise commerce prior to peak season and have a competitive edge.
Focus on speed to market and client facing value. Don’t assume that bigger OMS is better. Faster and more agile is almost always better and provides significant competitive advantage in a market where the retail fast eats the retail slow.
Conclusion: Cut Through the Hype
If you’ve made it this far, you see that OMS evaluation and selection is complex. However, if you know the right questions to ask your prospective OMS vendor or current OMS provider, you can cut to the chase a lot quicker and mitigate unforeseen headaches.
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