Is your business ready for an order management system?
Blog: Capgemini CTO Blog
The journey to omnichannel
From Amazon to Walmart, organizations are untouched by the advent of omnichannel order fulfillment. Customers now demand an omnichannel experience – from placing the order online to options for home delivery, store collection, or pick-up from a convenient collection center. A customer might visit a physical store, experience the look and feel of a product, and expect it to be delivered to his or her home.
With this in mind, a simple definition of an omnichannel order fulfillment includes the entire process:
- Customer order capture through different sales channel – store, online, mobile app, kiosk, call centers, etc.
- Order fulfillment through different inventory sources – store, warehouse, supplier, or even manufacturing sites
- Delivery to the end user at his or her choice of fulfillment locations – store, home delivery, or store pickup.
Why do I need an order management system?
Most retailers start small. They often have a single channel and limited fulfillment centers to cater for customer orders. As their business grows, however, they go through a cycle of selling more products; expanding to other sales channels, including e-commerce, flagship stores, online marketplaces, multi-brand retailers, etc.; expanding into multi-markets across geographies; servicing customer orders through distributed fulfillment centers; and then potentially manufacturing products in-house and through a global supplier network.
Due to the nature in which businesses grow, a retailer’s IT infrastructure is often not able to cater to this complex order fulfillment, and retailers implement workarounds to optimize their ERP. Complexity is also generated through mergers and acquisitions during specific growth periods. This leads to every retailer having their own ERP and systems developed in-house to cater to their own specific needs, and their own fulfillment process with varying degrees of order prioritization and allocation logic.
Investment in an order management system (OMS) can change all this.
Are you ready to invest in an OMS?
It’s clear that investing into a comprehensive OMS solution can overcome all your order fulfillment changes. But is it as simple as it sounds?
The existing complexity and variability in my clients’ order management processes across geographies is still very much unknown. While there is awareness of this non-harmonized global process, what is still missing is an understanding of its impact on the OMS rollout, which leaves two choices:
- Carry inefficient and non-harmonized processes into your OMS tool – this would most probably end up replicating your current ways of working in the guise of incorporating the regional variance, which defeats the whole purpose of reaping the full potential of OMS
- Design a global order management process incorporating only genuine regional differences – while this will enable you reap the full benefit of an OMS in the long term, in the short term it will cause disruption in your order management to varying degrees in different markets. The noise will heard across the organization, causing a delay in rollout, and in extreme cases a roll back. This creates a scenario where regional markets start dominating the roll out in the guise of “we are unique and our needs should be incorporated into the OMS.”
Clearly, both situations are undesirable. But can they be avoided? My advice would be to go for a maturity assessment of your existing order fulfillment process. Capgemini’s ESOAR methodology (Eliminate, Standardize, Optimize, Automate, Robotize) is a unique and straightforward transformation methodology that addresses the underlying causes of inefficiency in your business operations, before working on the actual symptoms. It enables you to map your current processes by asking and answering the following questions:
- Eliminate – is there a customer specific process created in a region that can be eliminated?
- Standardize – is your order allocation principle defined and handled differently across regions? Is your order validation process standardized?
- Optimize – are you using multiple tools and sub-processes across markets? Has every market created their own in-market tools to do their job?
- Automate – what is the percentage of work being done in the process through SCM platforms and tools?
- Robotize – are you capturing your customer orders manually? Is invoicing still generated from ERP manually?
These steps require you to run an internal workshop, or discover opportunities for elimination, standardization, and optimization with help of external experts. Failure to leverage the whole ESOAR journey and look for an OMS solution for all your fulfillment challenges will result in sub optimal results and won’t give you the return on investment you might envisage.
My advice? Aim for a global process with minimal regional exceptions, and embark on a process optimization journey before you invest in an OMS.
Abhishek Bikram Singh has over 12 years of industry experience (CPG, Manufacturing, Chemical, Retailers) in managing different supply chain functions. He has worked with clients across industries to define their order fulfillment and master data management maturity with respect to people, process, technology, and governance, and to develop their target operating model.