Moving Omni-Channel Forward: FROM ORDER MANAGEMENT TO ENTERPRISE COMMERCE MANAGEMENT IN THE CLOUD

Transcription

1 Moving Omni-Channel Forward: FROM ORDER MANAGEMENT TO ENTERPRISE COMMERCE MANAGEMENT IN THE CLOUD

2 OVERVIEW If anyone knows the pain of implementing and leveraging multiple, disparate systems to manage omni-channel retail, it is the retail CIO. While retail technology has made great strides in the last decade, delivering better omni-channel inventory visibility and control, significant gaps in functionality and integration have still persisted until now. This white paper will explore how technology advancements beyond order management and distributed order management are transforming the state of retailing, and where new functionality is headed. Although omni-channel retailers have more technology options than ever, the opportunity to leverage an integrated platform of solutions to effectively manage and promote enterprise commerce from supplier to consumer has proven to be the real industry need. Consumers are demanding, and exceeding expectations is what drives success in today s highly competitive retail climate. As a result, customer-focused retailers are moving beyond traditional order management and distributed order management towards a comprehensive Enterprise Commerce Management (ECM) platform. For retail CIOs, an ECM platform represents today s best option for seamlessly integrating customer-centric, cloudbased omni-channel solutions that enable and promote commerce. THE EVOLUTION OF ORDER MANAGEMENT Traditional Order Management Systems (OMS) Historically, order management revolved around customer interaction using a call center solution as the basis for creating, modifying, communicating and returning orders. Fulfillment was typically handled through a single fulfillment source/warehouse and offered no integration or real-time enterprise inventory visibility. The introduction of Order Management Systems (OMS) in the early 2000s provided the retail industry enhanced inventory visibility and control. Understanding the full scope of inventory across the extended enterprise helped companies become more capable of responding to customer needs. The rise of Distributed Order Management (DOM) solutions As e-commerce grew, omni-channel solutions became more prevalent. Retailers increasingly needed to fulfill and distribute orders from various fulfillment sources (i.e., multiple warehouses, retail stores, vendors). This growth gave rise to various DOM solutions, which offered advanced features like order routing, also called order sourcing/order allocation, as the key logic required to route orders and order lines to the best fulfillment source(s). Inventory visibility also evolved, as it was required for each fulfillment source across various products/ stock-keeping units (SKUs). In turn, inventory available to sell (ATS) and inventory available to promise (ATP) developed as significant requirements for effective order routing. Rapidly and effectively integrating and trading order, inventory and shipping information with internal systems and external trading partners using multiple systems, sources and vendors proved and continues to prove to be the biggest hurdle with DOM solutions. [1]

3 With many OMS options available today, weighing and determining the best long-term solution is not always a straightforward process for retail technology leaders. HOW ORDER MANAGEMENT SYSTEMS FUNCTION & COMPARE OMS manages various functions of omnichannel order automation: Order Creation Order Changes and Cancellations Order & Shipment Visibility Customer Care E-commerce to Warehouse Connectivity A robust OMS is vital towards improving omnichannel enablement. It serves as the centralized integration hub of a business and is key to optimal fulfillment and workflow within the organization. DOM enhances OMS functionality with three key additions: Inventory Available to Sell (ATS) and Available to Promise (ATP) Order Routing Rules Distributed Fulfillment Vendor Drop Shipping Ship from Store Pick up from Store Ship from warehouse For retail supply chain and IT decision-makers considering order management systems, possible upgrades or replacement to an existing legacy system, the core benefit of adding DOM is the ability to leverage inventory across multiple fulfillment sources to fulfill orders across multiple channels. DOM offers order routing logic that determines when items from various locations are available and presents the best shipping options to customers while balancing the lowest fulfillment cost option. For example, consider a customer purchasing from an online store. A lack of availability for a desired item can cause order/cart abandonment with that customer. In turn, that retailer can experience both the loss of the item sale and the loss of a larger shopping experience, and possibly the loss of that customer s loyalty. Conversely, if DOM were in place, an available item would be offered from another location and would improve the chances of a sale, additional sales and brand loyalty. Point solutions still come up short - Omni-channel process and information gaps persist With many OMS options available today, weighing and determining the best long-term solution is not always a straightforward process for retail technology leaders. DOM offers new possibilities for order routing and distributed fulfillment, however it is not always readily apparent how a new DOM solution will work within an existing system. In turn, retailers that do leverage OMS and DOM often experience hefty integration costs. More importantly, even with integrated OMS/DOM, the solutions do not address critical and significant processes required for managing commerce across the enterprise. Thus, point solutions, even [2]

4 when integrated, still leave retailers unable to commerce from supplier to consumer. options today within retailers omni-channel strategies to demonstrate where gaps exist. Consider that in a single omni-channel may be required to deliver a traditional customer-retailer experience (e-commerce, Order Management, Point of Sale (POS) and B2B Integration). For example, a consumer purchases three items online (e-commerce): sources. (Order Management) sources. (Order Management) a. Order line A is sent to the closest retail An advanced OMS one that is seamlessly combining the operations of brick-and-mortar, online retail, distribution centers (DC) and thirdparty logistics providers (3PLs) into a single seamless system, expediting advanced omnichannel capabilities, and most importantly, giving retailers the ability to provide the right inventory at the right place and channel at the right time. MOVING OMNI-CHANNEL FORWARD CUSTOMER ENGAGEMENT PLATFORM Single platform, cloud-based Customer Engagement Platform The next market shift is upon us. As the evolution of the order lifecycle continues, the emerging solution that best supports omnichannel retailing is one that addresses all retailers, trading partners and customers. b. Order line B is sent directly to the vendor for vendor drop ship. (B2B Integration) c. Order line C is sent to a warehouse for Catalog Management E-Commerce Solutions As this example demonstrates, multiple solutions multiple locations and channels. The hurdle that CIOs then face is the communication and integration across systems without timeconsuming, resource-intensive and costly integration projects. In fact, the number one complaint in today s retail market is functionality, based on communication and integration gaps between various vendors and suppliers within the OMS and DOM system. Thus, while OMS is a strategic solution, without complete and easy integration, it falls short. Customer Support Product Information Management u Ro ting Logistics Order Management System Trading Partner Management Drop Ship Figure 1: Customer Engagement Platform Pricing and Promotions Customer Engagement (POS) [3]

5 The solution, ECM, overcomes omni-channel complexity by addressing key retail functions with cloud-based software solutions that perform and easily integrate on a single platform. The result for retailers is a single, seamless, multi-tenant, cloud-based, omnichannel solution that addresses the full range of retail requirements including: Advanced Order Management Trading Partner Management Retail Engagement/Point of Sale (POS) And e-commerce The ECM platform is game changing for retailers; where, for the first time via a single platform, retailers can:: Easily exchange order information with suppliers in preferred file formats Fulfill orders from the most optimal location/channel Fulfill orders at least cost Deliver optimal service levels across all channels Understand and communicate customer order preferences to empower associates to engage in better clienteling And deliver an e-commerce experience, and more importantly, a flawless omnichannel experience, that promotes brand loyalty and increased sales ECM simplifies omni-channel fulfillment In 2011, an estimated 52 percent of companies built their own e-commerce systems 1. A decade later, these same companies are now experiencing daily integration issues and are seeking new solutions as a result. The ECM model makes omni-channel success more widely available by addressing each critical stage of the omni-channel order processes with seamless integration and results. ECM leverages advanced order management functionality while addressing gaps within OMS with DOM for the next level of omni-channel fulfillment, delivering ease of: Integration Deployment Scalability A retailer managing commerce via an advanced OMS on the ECM platform couples the best of OMS with DOM, enabling the company to fulfill any order from any location. Together, the separate systems run seamlessly to locate the best source for fulfillment across all DCs and retail stores as well as directly with manufacturers and vendors. Properly managed, this solution allows rerouting and eliminates back orders and potential sales losses. As a shopper s order enters the ECM system, the DOM logic will automatically recognize Citation: (1) Chris Fletcher, Build vs. Buy in E-Commerce: Is it a lobster trap?, Gartner, December 6, [4]

6 e-commerce, POS, OMS, and B2B data exchange. For retail technology leaders, the headache and cost associated with synchronizing and integrating diverse software solutions disappears, while the ability to fulfill orders, drive loyalty and grow sales increases. Deployment ECM is offered as Software as a Service (SaaS). It is important to weigh the ability to access any portion of an omni-channel solution suite, from any location or device, as this allows retailers improved and more immediate inventory visibility, resource planning and transportation routing. Having a real-time, seamless interface between all omni-channel solutions and across all devices is not only convenient for managing shipments, inventory and demand, but it is also instrumental toward delivering stellar customer service and clienteling opportunities. Figure 2: Enterprise Commerce Technical Architecture availability across all sources and direct the best option for fulfillment including: DCs, retail stores, 3PLs and suppliers. Additionally, when a customer order enters a DOM system, the chosen item is located and then customer engagement is enhanced by offering the customer options for pick up or delivery and best shipment options. Based on the customer s choice, the order routing and distributed fulfillment is made. Ease of integration The foundation to ECM is its Trading Partner Management (TPM) integration layer that serves as the platform enabler and translator, allowing different software solutions to rapidly connect and trade information within and outside the enteprise. The cloud-based platform also allows seamless software communication across Scalability As a cloud solution, ECM readily scales to grow with a company s business, considering both locations, and channels. The platform can be implemented as a whole, or the various solutions can be added and leveraged with time. Most importantly, a scalable solution at a flexible price point helps level the playing field for small to mid-sized retailers. The best approach for business growth in today s complex and evolving environment is not to weave together multiple, disparate systems, but to adopt a single platform solution to solve complex omni-channel business problems. What most separates ECM from point OMS and DOM solutions is its cost-effective ability to drive engagement and sales across the enterprise and address comprehensive omnichannel requirements. [5]

7 Getting started While solutions abound, the first, absolutely critical step towards optimizing omni-channel retail is determining an optimal supply chain strategy. Executives armed with an omni-channel strategy that is based on a detailed review of the company s supply chain network and inventory flow/demand patterns will make more informed decisions toward optimizing key processes and how to leverage enabling technology to drive targeted results. If and when order management functionality is required, ECM represents an important opportunity for small to midmarket retailers to compete by cost-effectively optimizing omni-channel fulfillment. CONCLUSION Managing complex omni-channel processes and technology is challenging for most retail technology leaders, but a single, cloud-based platform now makes deployment and integration affordable, seamless and painless. ECM delivers enhanced visibility and control across the order lifecycle by addressing the critical integration gaps that exist between disparate order management, distributed management and omni-channel retail solutions. In this way, optimal order fulfillment and customer care is enabled across the supply chain network. ECM enables retailers to easily and strategically fulfill orders, at the right time and channel, and with the least time to fulfillment and cost. In a market where customer service is absolutely essential to competitive advantage and profitability, ECM not only allows companies to act on every sales opportunity, it also helps companies promote better clienteling and brand loyalty across channels to deliver a seamless, optimal omni-channel customer experience. For retail technology leaders charged with developing the best omni-channel strategy, ECM delivers significant competitive advantage and results. For more information: ENSPIRE or info@enspirecommerce.com Enspire Commerce North Meridian Street Suite 415 Carmel, Indiana 46032