11 Things to avoid in Order Management Systems
Tuesday, August 21, 2018

11 Things to Avoid in Order Management Systems

People will tell you what you should look for in an Order Management System. But what parts should ring alarm bells? Make the right choice and you make your retail brand much more efficient. Make the wrong choice and your company gets stuck in the stone-age of order management. Here are tips to avoid the OMS stone-age.

Pitfalls to Avoid in Order Management Selection:

1. Hard Coded Solutions

Retailers and brands need flexible systems that are configurable by system administrators and users. One of the biggest things to avoid in order management solutions are the systems that need programmers to make adjustments. Business rules are a perfect example. Business rules are set up to guide the system on how to optimally route goods. In retail, these rules need to change frequently. Just think of fashion, footwear and seasonal goods hardware at the end of every season. As the season changes, so do the speed, ship-from location, and priorities. To make it quick, easy to use drop-down menus help. What doesn’t help is needing to co-ordinate with a coder.

In today’s market, the vast majority of systems are platform solutions. Platforms are flexible and make it easier to program an OMS. However, you still need a coder to develop the solution. That also means the system is subject to hard-coding, which is inflexible from a user’s perspective. It completely depends on the capabilities of the system architects and coders who built the OMS. If they did a good job, and build in some flexibility – then you are in luck. For the most part; however, the challenge remains that platforms systems require coding.

2. On-Premise Solutions

Retailers need flexible systems that are configurable by system admins and usersA big item to avoid in order management are vendors still pitching on-prem systems. The battle of on-prem versus SaaS technologies was fought and won over a decade ago. Cloud-based technologies won. From a TCO (total cost of ownership) perspective, they are just more economically efficient to run. Yet surprisingly, some dinosaurs are still laying FUD (fear, uncertainty, and doubt) with enterprise clients. Surprisingly, despite being on the cusp of the 2020 era, these old concepts persist.

Regardless of your size, on-premise solutions are NEVER the answer. Cloud technology is available EVERYWHERE. It is a robust technology. On-prem systems are no more secure than cloud-based solutions. But, your overall costs on SaaS technology will let you invest so much more.

 

Read More: Why You Want Out-of-the-Box Retail Technology

 

3. Your Competitor’s Cloud

Not all cloud technologies are built equally. Many cloud technologies are run by organizations that do not compete in the retail space. So why gravitate to vendors that put your data on your competitor’s (Amazon) network? Worse yet, running your system on AWS means you are funding the competition to better compete with you! How does that make sense?

A major pitfall to avoid in order management technologies are those run on the AWS cloud. Yet, in an earlier article, we found that 65% of OMS vendor solutions are run on AWS networks. More retailers need to ask this question of their OMS vendors.

4. Native SaaS or Ported?

Retailers need to look for technology vendors who have embraced agile methodsOn the heels of the cloud discussion, is whether the vendor’s system is native-SaaS technology. Several large and reputable vendors have ported their systems from old on-prem technologies. The scary part here is to look under the hood, only to find that the engine is rusty, old and ill-suited to your needs moving forward. Scarier yet, is the idea that the old methodologies used to develop this ported technology – might still be used for today’s ongoing development.

Look for technology vendors who embrace agile methods. Better yet, look for proof that the vendor actively lives the vision. What you want to avoid in order management solutions are systems that upgraded only once a year or every few years. Today’s SaaS systems should include updates, new releases, tweaks and improvements regularly. Good systems release updates every month or two. Look for at least 6 releases per year. Otherwise, you are falling behind.

Make sure you have proof on this last point. You don’t want an OMS vendor that does regular update releases but really focuses those on improvements to their WMS, ECP, POS or other systems. Best to ask to see their update schedule focused on the OMS specific improvements. If that part of the release schedule is only every two years … then you will be short-changed. Buyer beware.

5. Roadmap: Vision or Daydream?

Not long ago a North American retailer awarded a tender to a firm largely based on their roadmap. Sadly, this retailer chose a Tier 4 system, over Tier 1 & 2 vendors, based on roadmap promises. Clearly, the vendor had done an impressive job on their presentation. However, in a private discussion, that vendors’ own staff were stunned about their win. The likelihood of the customer getting the system they expect is vanishingly small.

Roadmaps meander, evolve and change with time. They are strategic. They are a directional intention. However, if they don’t change over the course of 2-3 years, then the vendor is not doing their job. They aren’t basing the roadmap on what real customer want. A solid customer-focused philosophy means that the roadmap changes periodically. Perhaps the main elements remain constant. However, smaller and mid-sized projects will shift with customer requests.

The moral of the story is to consider the roadmap as a general positive direction. If it is set in stone over the long term, will the vendor adjust to your needs? Balance this too, with today’s existing capabilities. It is not enough for a vendor (regardless of size) to ‘promise’ you that in 2 years they will have an out-of-the-box system with deep feature rich functionality. Simply put, promises won’t help you in retail when your competitors are leaping far beyond your capabilities.

 

Related: Distributed Order Management

 

6. What About Quality? 

Store fulfillment is a key part of today's omnichannel retail puzzle

Among the things to avoid in order management – quality is not one of them! In fact, quality is probably the most important aspect of choosing an OMS engine.

First, look for the organization that takes quality seriously. Can they describe their quality assurance (QA) program? Do they talk about it? Is it centralized as a function, yet distributed throughout the different operating groups? After all, there are many areas that need QA. The platform layer needs QA. Integration technology groups need a QA structure. Compliance teams definitely needs QA. Finally, the application team needs QA, too. Is there a formal quality assurance structure, or do they simply run a few tests to prove it works (fingers crossed)?

If the vendor believes in QA, ask about their QA specialists and what they do. Make sure their focus really is on quality assurance. If the vendor fails here, then walk away. The risks are too great, that there will be a flaw in your system. No retail operation can afford a breach based on their lack of appropriately ensuring they provided a top quality OMS.

Second, the quality of complex tech like a DOM (distributed order management), is challenging to assess. Look then for evidence that the vendor has positive customer reference. Then speak with those references about the quality assurance processes that keep them safe. Also look for analyst reports describing how the OMS stacks up against its competitors. OMS/DOM comparisons can be found by reputed analyst firms like Gartner, Forrester, IDC, IHL, and EnsembleIQ. If your vendor is not on several of these references, this should raise alarm bells.

7. Store Fulfillment 

Get Will the Real OMS Please Stand Up? WhitepaperStore fulfillment is a key part of today’s omnichannel puzzle. It is also known as ship-from-store methods. Not all retailers expect to use their stores as fulfillment centers. But, even if this is the case, don’t paint yourself into a corner. Another important point to avoid in order management are systems that don’t give you the flexibility to change your mind. Maybe you don’t do ship-from-store today, but you may want to do so in the future. Look for systems that keep your options open.

Be cognizant of the vendor’s other businesses interests, as well. Most vendors mean well. They want the best for their clients. However, their own business interests may be to promote their own 3PL or drop shipment services. This may work at times. Yet, at other times this may directly conflict with your true best interests. That’s specifically true if you were to pursue a ship-from-store strategy. Be cognizant of the potential agenda difference.

A recent WBR report on international markets in retail pointed out that 60% of respondents identified as ONLY being set up for single node distribution. That means most retailers around the world are only using DC’s (distribution centers) for their order fulfillment. This may be the most effective solution for many retailers. But it is not necessarily the best strategy for all. Understand your technology vendor’s other interests. Make sure they are intimately aligned with your own interest, first and foremost.

8. Black Friday Nightmares

The scariest scenario in retail is that of the Black Friday nightmare. Or if you prefer, make it the Boxing Day, Back to School Week, Singles Day, Prime Day, Mothers Day… or another key selling period. During peak times, you have volumes of orders from digital assets (e-commerce, voice, social, text, and mobile commerce). Add to this strain that your stores are packed with buying customers. Then disaster strikes. The OMS stops transacting orders. Oops. Did you check the maximum capacity of the providers stress tests? Could it handle 50x your typical order capacity?

What you want to avoid in order management selection is a system with insufficient capacity. Most solutions were not designed to scale. The vast majority are actually tailored to small businesses with 5-10 routing locations. A category up are vendors with systems designed for 10-100 locations. All good, but more important is to find out their tested, hard numbers on order processing capacity.

Ask your preferred vendor to what their exact test numbers scaled. At what point did their system break? Every tech vendor, who has done their homework, MUST have these figures. If they do not, be highly suspect of their claims. The “we’ve got you covered” platitude does nothing for you if a light OMS fails on Black Friday.

Don’t let the size of the vendor fool you either. Many players in the DOM market are huge international firms. Remember that many vendors acquired their technology from buying small tech companies. That means the technology is probably not as well integrated, as suggested. If the vendor did not complete their due diligence, then the system can break under load stress. Think this can’t happen? There are a string of examples to the contrary. Investigate this closely. It will save you embarrassment, lost customers, and the pain of ripping out and replacing a poorly designed OMS.

 

Read More: Order Management Quality Assurance is Critical

 

9. Don’t Confuse UX with Core Technology 

In Order Management avoid the vendors that focus on the aesthetics at the expense of the core capabilities

As an engineer, I am prone to focus on technical functionality. For me, core capabilities, effectiveness and the overall impact of a system trump the cuteness of the icons. Yet my marketing side loves a beautiful interface. As such, I have keenly watched for this balance.

In retail, we so often seek out the aesthetically pleasing. The storefront has to be beautiful, clean and neat. The product must look simple and sleek. The packaging must be appeasing. Our website must be beautiful and easy for shoppers to browse. So too, the backend systems like the OMS must be functional, with a good user experience feel.

All good, but consider the right balance. What you want to avoid in order management are the vendors that focus on the aesthetics at the expense of core capabilities. Too many OMS vendors get into the space by designing a beautiful UX. They focus the conversation on the drag and drop functionality and cool layout. Yet looking deeper shows a code-intensive platform (this will cost you money, time and flexibility). Alternatively, the beautiful system ends up being the skin of a very light and function impoverished system.

Selecting a DOM is a serious undertaking. Don’t shortchange yourself. Don’t get bamboozled by a beautiful skin, at the cost of the core underlying technology. At the end of the day, a backend system is really only as useful as the function that it accomplishes.

10. Unified Commerce or ERP Bloat?

Many vendors selling an OMS in the mid & enterprise space pitch Singular Unified Commerce (SUC) solutions. Naturally, there is a vested interest here. They want to convince retailers to buy an entire unified commerce system from them, and ONLY them. It means their share of wallet grows substantially.

To many retailers, this pitch is enticing. Only one vendor means one contract. It means one throat to choke when things go wrong. It means one investment (albeit massive). Simple, yet loaded with risks.

As yet another thing to avoid in order management purchase considerations, a SUC system is among the greatest risks. Recall the old concept of ERP bloat. ERP vendors were selling enterprise systems loaded with modules that customers did not want, need or used. The systems took years to implement (today 22-26 month implementation are common). They also tied customers into large binding long-term contracts – whether the system worked or not.

Consider converged commerce as a solid alternative. Converged commerce gives you the same unified solution, but it is based on developing a high-performance system. This done by having a trusted SI build a top tier system using best-in-class technologies. Read more about this in The Rise of Converged Commerce and Is Unified Commerce the New ERP Bloat?

11. Fixating Only on Current Needs

A final thing to avoid in order management selection is taking a narrow fixation only on current needs. Some system integrators offer retail clients the opportunity to develop a fully customized solution. Cool, but limiting. What is troubling is the lack of specialized expertise, and deep functional knowledge going into these systems. This approach often ends up with the client getting systems that only cater to current needs. Custom built solutions don’t evolve automatically (see discussion about Native SaaS technology, above). It limits you by not bringing your organization the best practices learned from other retailers.

When seeking a new system, don’t just focus on what your current system does NOT do, either. Looking for the ‘not X’ system means you won’t appreciate the additional benefits of all that a well-developed solution can offer. Most importantly, look for a vendor with specialized depth in DOM infrastructure. Seek a vendor that is continually evolving, improving and developing the product. In the long run, it will result in your system improving automatically, over time.

 

Author: 

Charles Dimov, VP of Marketing at OrderDynamics

Charles Dimov is VP of Marketing at OrderDynamics. Charles has 23 years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.

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