the ultimate guide to selecting oms-saleswarpwp

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9 critical components retailers must evaluate when selecting an omnichannel

order management system

SALESWARP WHITE PAPER SERIES | ORDER MANAGEMENT

THE ULTIMATE GUIDE

SELECTING AN OMNICHANNEL ORDER MANAGEMENT SYSTEM

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SALESWARP WHITE PAPER SERIES | ORDER MANAGEMENTAGEMENT

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Order Management Systems are not new technology by any stretch of the imagination,

and have been used in countless industries for a number of years. However, for the

average online retailer, the demand for a comprehensive, robust Order Management

System (OMS) has never been higher. That’s because the way people shop has changed

drastically–from in-store, phone, catalog, Web, and mobile–consumers are increasingly

using a wide array of channels to buy merchandise.1

Retailers such as Amazon that have incorporated robust Order Management Systems

have seen significant growth. Forbes reported that Amazon sales have grown by

23 percent so far in 2014, mainly on the back of

the merchant’s order management and fulfillment

capabilities.2 Services such as ship-from-store,

same-day shipping, endless aisles and other

similar offerings are now expected by today’s

shoppers, and retailers without the tools and

technology required to deliver on that end will

find themselves losing customers.

In fact, one recent report from Starmount and Retail Systems Research (RSR) suggested

that retailers struggle the most when it comes to order fulfillment capabilities.3 The report

includes data on retailers across six different dimensions, including inventory management,

customer service and technology integration, and concludes that retailers are least

mature in the area of order fulfillment.

This white paper will discuss what a robust Order Management System can do for retailers,

the benefits of such a system and the critical areas retailers need to evaluate when looking

into implementing omnichannel order management software.

- - - - 1 http://www.pewinternet.org/three-technology-revolutions/2 http://www.forbes.com/sites/stevebanker/2014/08/25/amazon-grows-rapidly-traditional-retailers-struggle-should-brick-and-mortar-retailers-partner-with-google/3 http://uk.reuters.com/article/2014/07/01/tx-starmount-idUKnBw016023a+100+BSW20140701

INTRODUCTION

“ Amazon sales have grown 23 percent

so far in 2014, mainly on the back of

the merchant's order management

and fulfillment capabilities.”


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WHAT IS ORDER MANAGEMENT AND WHAT CAN IT DO FOR YOUR RETAIL ORGANIZATION?

Managing orders has become a complex task in recent years given the rise of new sales

channels and the increase of fulfillment options, but the right Order Management System

can go a long way in helping enterprises iron out many of the complexities. Set up with

highly specific business rules, an OMS exists to determine the most efficient and cost-

effective way to manage, route, and deliver orders to customers.

An Omnichannel Order Management System provides retailers with a single, centralized

view of all orders from every sales channel, while providing real-time inventory visibility

across all fulfillment locations. Regardless of whether retailers serve a consumer-facing

audience (B2C) or resell to other retailers (B2B), or both, an OMS can handle all types of

orders in a seamless and streamlined fashion.

“ An OMS exists to determine the

most efficient and cost-effective

way to manage, route, and deliver

orders to customers.”


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UNDERSTANDING THE NEED FOR MODERN ORDER MANAGEMENT SOLUTIONS

One of the biggest challenges retailers face is the fact that their technology is just not

keeping up with the times. With the rise of digital stores and the omnichannel experience

that shoppers expect, the industry has only become more competitive. Some of these

challenges include:

• Reducing time and resources needed to fulfill and process orders.

• Delivering to the customer when and how they want it delivered.

• Supporting new omnichannel buying patterns and consumer expectations.

However, very few Order Management Systems were designed to be so forward thinking.

Most of these solutions are products of their time, designed to only meet the needs

of the single channel merchant. This can be a real problem for retailers using legacy,

disparate, or siloed systems, which are not often replaced simply due to the perceived

high upfront cost of upgrading and the potential downtime during implementation.

” The ability to identify where inventory

is located and expedite picking, packing,

and shipping is a benefit immediately

seen with the use of a robust Order

Management System.”


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” The implementation of an automated

order fulfillment system may increase

overall efficiencies by 150 to 300%.”

BENEFITS OF A MODERN OMS

A modern OMS brings a lot of value not just to the retailer, but also to the consumer.

An accessible and flexible Order Management System helps retailers improve customer

service, expedite delivery and offer more purchase, delivery and return options to cus-

tomers, thereby bolstering customer satisfaction, improving the shopping experience

and allowing brands to gain a competitive edge against other sellers within their niche.

On the internal side, an OMS plays a pivotal role in communicating with external systems

to eliminate manual tasks and reduce fulfillment errors. This improves productivity

and maximizes efficiency, which can result in greater revenue and higher profit margins.

According to Eric Cameron, VP of Sales at Bastian Solutions, the implementation

of an automated order fulfillment system may increase overall efficiencies by

150 to 300 percent.


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WHAT TO LOOK FOR IN AN ORDER MANAGEMENT SYSTEM

Forrester Research analyst Peter Sheldon made a poignant metaphor when he compared

trying to sell products to customers without an Order Management System to going into

battle with a wooden stick.4 These solutions ensure the entire process, from receiving the

initial order to getting it out to the customer, is much more efficient and cost-effective. Not

having the right system in place, one that is equipped to handle every order fulfillment

scenario in a streamlined fashion, could be a big detriment.

So, what does a retailer look for in an Order

Management System that can deliver on their

omnichannel initiatives? We have outlined nine

key components retailers must look at when

evaluating Order Management Systems.

1. INTEGRATION

Technology has become commonplace in today’s retail stores and is constantly evolv-

ing, from computer-based POS systems to cloud-based systems that can be accessed

on a tablet or smartphone. Merchants also use tools and solutions for everything from

Customer Relationship Management (CRM) to inventory tracking to accounting, product

management and more.

For example, to view and control inventory in real-time, an OMS must seamlessly integrate

with diverse systems across the organization, including Warehouse Management Systems

(WMS), Warehouse Control Systems (WCS) and Enterprise Resource Planning (ERP) systems.

Having a seamless integration provides optimal fulfillment execution, allowing operations

to effectively balance automated equipment demands, labor needs and costs.

Integration with Point-of-Sale (POS), eCommerce platforms and online marketplaces is

also critical for an Order Management System to be able to automatically pull and

consolidate orders into one place, making it easy for retailers to manage orders as they

progress through the order flow process.

” Order Management Systems must be

woven into many existing solutions and

communicate effectively with them in

order to maximize their use.”

- - - - 4 http://blogs.forrester.com/peter_sheldon/14-07-29-announcing_the_forrester_wave_omnichannel_order_management_q3_2014


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Order Management Systems must be woven into many existing solutions and communicate

effectively with them in order to maximize their use. If various tools cannot be integrated,

merchants may have issues with transparency and efficiency, even if the desired system

would, hypothetically, be perfect for their needs.

2. DISTRIBUTED ORDER MANAGEMENT

Distributed Order Management (DOM) provides a single view of all orders and available

inventory across the complete distribution network including fulfillment centers, retail

stores, suppliers and even orders in-transit. This allows retailers to manage every order

from every channel from a single, centralized platform with one set of order orchestration

rules and processes. In essence, the OMS becomes the centerpiece for all channels and

distribution centers, providing sellers with real-time intelligence about the status of all

orders and allowing retailers to fulfill purchases in the

most efficient way possible.

3. INTELLIGENT ORDER SOURCING

With consumers making purchases from a variety of

channels and merchants leveraging a number of sources

to fulfill these orders, it is crucial that retailers are able

to source orders in the most effective way possible. Sometimes, leveraging a nearby retail

store to fill an online order instead of a regional distribution center may not only be more

cost effective in terms of delivery, but could also get the order to customers quicker while

getting rid of excess inventory that may not be selling in-store.

Another crucial function to look for is the ability to fulfill different line items of a single

order from one or more fulfillment locations whether an internal warehouse, distribution

center, retail store or drop-shipper. Distributed Order Management enables order sourc-

ing and fulfillment from the location best suited for each line item, based on complex,

pre-defined rule sets and logic algorithms, as well as the customer preference. However,

in order to execute automated rule sets to determine how, when and where products are

fulfilled, retailers must also have inventory visibility.

An OMS that can provide rules and automated processes to identify the most optimal

fulfillment method, whether based upon inventory levels, costs or customer fulfillment

preference is absolutely necessary in today’s omnichannel world.

” Distributed Order Management

enables order sourcing and

fulfillment from the location

best suited for each line item.”


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” This level of visibility is critical as

it allows merchants to make smart

decisions about how they leverage

their stock.”

4. INVENTORY VISIBILITY

Order management can also be a valuable tool for helping retailers manage their

inventory. In siloed retail operations, in which each channel and distribution center are

considered separate entities, it would not be unusual to see inventory managed by

different solutions, such as a Warehouse Management System for distribution centers,

an ERP for large organizations, or a POS system for brick-and-mortar retailers. A

cross-channel Order Management System can effectively be the one source of all

of this pooled information, giving retailers better control over their different channels.

This level of visibility is critical as it allows merchants

to make smart decisions about how they leverage their

stock. For instance, after receiving an order, a retailer can

use the OMS to ping different fulfillment locations and

check inventory levels. Merchants can then choose wheth-

er they want to pull stock from a source that has plenty

of inventory, from a store that has excess stock, or from

the closest fulfillment location to the customer. This can also help improve transparency

for customers, letting them know which locations have stock available and when they can

expect to receive their shipments.

Inventory is the lifeblood of retailers, and with the right Order Management System

in place, merchants can gain real-time visibility into their entire stock. This not only

improves the efficiency with which merchants use their inventory, it also helps shoppers

make better purchasing decisions.


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” Retailers want to have as few

manual steps as possible between

the time a customer places an

order to the time they receive

their order.”

5. AUTOMATED PROCESSING AND STREAMLINED ORDER FULFILLMENT

Order processing can be a tremendously time consuming process, particularly when

merchants are executing this process manually. When an Order Management System

is integrated into retail operations and all steps around billing and order checks are

identified, retailers can begin to automate this process. This will expedite the time

between a customer making a purchase and all the necessary steps and checks that

have to occur in order to process an order.

In addition to automation, an Order Management System

is vital to improving order fulfillment efficiency; as these

back-office technologies help aid employees responsible

for executing warehouse management procedures. For

retailers with their own internal warehouse or retail stores, an

OMS with pick-pack-ship and barcode scanning capabilities

will be required for order verification and to complete

order fulfillment. Bin and lot tracking may also be a re-

quirement in an OMS for retailers who need to track bin locations in a warehouse and the

items in that bin that are reserved for an order. The ability to identify where inventory is

located and expedite picking, packing, and shipping is a benefit immediately seen with

the use of a robust Order Management System.

At the end of the day, retailers want to have as few manual steps as possible between

the time a customer places an order to the time they receive their product(s), as this

can create complications and delays.


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” Fraud costs eTailers as much as

$3.5 billion annually in 2012.”

6. BILLING

Billing is an important part of processing orders and managing refunds. Order Management

Systems can help merchants accomplish this goal through billing capabilities such as pay-

ment capture, refunds, invoiced billing and recurring billing. Moreover, these capabilities

can be used by any retailer, regardless of whether they are engaging B2B or B2C clients.

If businesses are using a third-party payment system, the OMS should be easily integrated

into these systems as well, maximizing the value these solutions bring to the table.

7. FRAUD PREVENTION

For retailers, fraud is a huge concern. One report from CyberSource suggests fraud costs

eTailers as much as $3.5 billion annually in 2012 – that is a huge loss the industry needs to

be aware of.5

Modern Order Management Systems should come

complete with fraud prevention capabilities (or at

least have integrations with stand-alone fraud

solutions), such as exception reporting and order

scoring, which can help merchants identify potential fraudulent transactions. The ability

to automate fraud check activities can significantly reduce delays and errors while

simultaneously helping retailers meet customer expectations.

- - - - 5 http://blogs.forrester.com/peter_sheldon/14-07-29-announcing_the_forrester_wave_omnichannel_order_management_q3_2014


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” Today's consumer not only wants

to be able to buy anywhere, fulfill

anywhere, but also to be able to

return anywhere.”

8. CALL CENTER AND CUSTOMER SERVICE APPLICATIONS

If omnichannel retail is all about the customer, then merchants need to have the right

tools to better serve the customer and how they want to shop. Call centers and customer

service agents can improve customer service times and gain more insight into customer

preferences with a centralized Order Management System.

The main perks of using an OMS for call center and customer service purposes are

providing these agents with access to a complete view of the customer profile, past

order history along with real-time information on current orders. With access to customer

and order information, customer service agents can identify order status and make the

necessary modifications to the order, such as editing or adding new items, processing a

refund or delaying the shipment until the complete order can be sent to the customer.

9. RETURNS

Returns can be an expensive part of retail operations, particularly in regard to online

purchases that must be shipped back to sellers. Today’s consumer not only wants to

be able to buy anywhere, fulfill anywhere, but also to

be able to return anywhere. For instance, a customer

may want to return an online purchase to a nearby

store. An OMS that allows the retailer to quickly

process the return and update inventory count will

help get the item in question back into circulation

as quickly as possible.

An OMS that will accept returns from all channels, fulfill exchanges, and manage refunds

can extend the seamless omnichannel experience to the return process.


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WHAT TO LOOK FOR IN A VENDOR OF AN ORDER MANAGEMENT SYSTEM

Although Order Management Systems are largely used to accomplish similar goals,

each vendor differs in various ways. Merchants must keep this in mind as they evaluate

all of their options and look for the perfect solution. That being said, here are some

things to consider when evaluating each vendor:

SERVICES: As mentioned earlier, retail is a fast-moving, always-evolving industry.

Merchants need to keep up to remain competitive, which means they also need a highly

flexible Order Management System that can be modified and even customized to meet

the requirements of their specific business. Retailers

should identify whether vendors offer customization ser-

vices that will help them stay at the top of their game.

PARTNERSHIP: When retailers are looking to put systems

in place to deliver an omnichannel customer experience,

retailers should look to vendors who will participate in

a long-term partnership. A vendor who takes the time

to understand a retailer’s strategy and who provides a

scalable solution that will transform and grow with the

company will prove to be a smart long-term investment. It is best to avoid the need

to re-platform in the future to prevent operations from being disrupted.

SUPPORT: Some vendors offer live help 24 hours a day, 7 days a week. Others simply

have online troubleshooting guides. In either case, the level of support should be

evaluated to ensure not being left up the creek without a paddle. In the case of bugs,

retailers should ask about response times, what qualifies as a bug, and who monetarily

is responsible to get it fixed. These are important questions to ask to ensure teams

are prepared for what is expected.

COST: Budget is always top of mind for most retailers. While Order Management

Systems are important pieces of technology, it is also important for merchants to

find a vendor that can provide them with a solution that fits their budget. If cost is

an issue, retailers may want to consider a vendor with a cloud-based system or a

solution that provides additional bonuses, such as commercial source code, to

maximize their investment.

” A vendor who takes the time to

understand a retailer's strategy

and provides a scalable solution

that will transform and grow with

the company will prove to be a

smart long-term investment.”


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The Order Management System is an integral piece of retail operations, as it plays a

critical role in several different facets of order and inventory management, ranging from

fraud prevention to order fulfillment to inventory visibility. Merchants must understand

what key functionality is needed in an Order Management System, and the type of

vendor that will help them deliver the omnichannel experience their customers expect.

SOURCES:- - - - http://blogs.forrester.com/peter_sheldon/14-07-29-announcing_the_forrester_wave_omni channel_order_management_q3_2014

http://uk.reuters.com/article/2014/07/01/tx-starmount-idUKnBw016023a+100+BSW20140701

http://www.forbes.com/sites/stevebanker/2014/08/25/amazon-grows-rapidly-traditional-retailers-struggle-should-brick-and-mortar-retailers-partner-with-google/

http://www.pewinternet.org/three-technology-revolutions/

http://www.nielsen.com/us/en/insights/news/2012/smartphones-the-ultimate-shopping-companion.html

http://www.retailsolutionsonline.com/doc/overcoming-order-fulfillment-challenges-with-plausible-solutions0001?sectionCode=Articles&templateCode=Single&utm_source=et_6214150&utm_medium=email&utm_campaign=ISRET_2014-10-08-W&utm_term=70a97cf7-12c6-491a-95d9-3a969f7159ee&utm_content=Overcom-ing%252bOrder%252bFulfillment%252bChallenges%252bWith%252bPlausible%252bSolutions

http://www.internetretailer.com/2013/03/28/online-fraud-costs-e-retailers-35-billion-2012

http://www.retailsolutionsonline.com/doc/why-omni-channel-commerce-needs-an-omni-channel-order-management-solution-0001

http://www.saleswarp.com/blog/infographic-how-to-unify-product-data-for-the-multi-channel-shopper/#more-59023

” Merchants must understand what

key functionality is needed in an

Order Management System to deliver

the omnichannel experience their

customers expect.”

To learn how SalesWarp can help your

retail organization accelerate growth, visit

SALESWARP.com or call 410.276.4600.

ABOUT SALESWARP

SALESWARP, a provider of omnichannel management software for responsive retail, breaks down the barriers

in a multi-channel commerce operation to manage all product, inventory, order, fulfillment, accounting and

customer data from one system. By eliminating operational silos, SalesWarp provides retailers with seamless

data flow and advanced intelligence that results in more effective decision-making for a profitable, streamlined

and responsive retail business. For more information, visit SALESWARP.com.

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