Today we’re talking about order management systems (OMS) and the impact of ERP OMS management and legacy systems on the mid-market over the next 5 years.
It’s truly a matter of technical debt getting broadly ignored.
Reclaiming tech equity is something that every IT department is constantly thinking about; 60% of CIOs surveyed by McKinsey felt that their organization’s technical debt had risen perceptibly over the past few years.
Just like the Peter Principle, what got a business to today might not get it to tomorrow. But there is comfort in using that OMS management system – even beyond its stated use case. Problems arise when comfort leads to delayed or stalled investment and reliance on yesterday’s tools that were never intended for tomorrow’s problems.
The 5-year outlook
As ecommerce has evolved, new order management software has critically emerged to address old problems:
- How do I track inventory across vendor direct, fulfillment centers, back-of-store, and drop shipping?
- What’s the right available-to-promise by option?
- How do I synchronize OMS management across these to deliver exceptional customer value?
Like it or not, customers have higher expectations as well. Played out as the buzzword may seem, “The Amazon Effect” is real. It’s not just 2-day shipping; it extends to ease of ecommerce returns, transparent rate models, trading network visibility, and more. Leveraging information quickly for your customer is expected.
When we think of a mid-market business addressing this with legacy OMS management solutions, we run into several legacy problems.
- How often are rate tables being updated?
- Is my OMS management solution recommending a single fulfillment site for everything, or considering all options (including shipping from the store)?
- Did my static rule route an order to a drop shipper when they had no inventory?
When considering these problems over the next 5 years, is it comforting to stay with your legacy solution? Or is it finally time to consider deploying an OMS management system that’ll grow with your business?
Adopting an OMS management system
There is a methodical path to adopting OMS management technology as your company grows.
It is generally accepted that mid-market businesses will adopt an ERP system first. The ERP addresses core concerns around accounting, sales and purchase recognition, and things that are true regardless of your business model. Great for the things that every company deals with, but what about when it’s not free from nuance?
As you grow, you start needing to address more and more of your business with system support. You don’t want to run your warehouse from pen and paper or spreadsheets forever. So you invest in some warehouse management system modules from your ERP vendor to run that facility. The suite is already in place; why not?
- But what about the second facility?
- What about a vendor that’s willing to ship for you?
- What about marketplaces, websites, and emerging sales channels?
- What about warehouse managing system integrations for trading partners and virtual sites?
As you grow, your traditional model, like your customers, starts gaining both complexity and nuance.
Critical processing for backorders and more
Focused OMS management capabilities become just as essential as running the inside of the building. Unlike the ERP (finance) or the WMS (inventory and order execution), the OMS and DOM provide critical processing around the processing of the order itself.
- Is it a backorder?
- Is it a pre-order?
- Which sites had sellable inventory?
- Can I presale inventory in transit or available to promise?
- Do I ship it from Dallas or Seattle?
- Is it faster or cheaper to drop ship?
Non-order management technologies generally rely on single-decision rules to process orders. If the order came from Michigan, that order is assigned to your St. Louis facility. But if that site has no inventory; it might not even stock that SKU. It doesn’t matter that the inventory is in Nashville; that order is on backorder. You probably just lost customers.
Invest in the OMS management solutions you need when you need them. Or make do with solutions that got you here – but can’t get you there.
Related: Inventory Fulfillment in ERP vs. WMS
Like your customers, you need value now
What do you need? Value. When do you want it?! Yesterday. Time-to-value is the top factor in your success.
Ecommerce is dealing with many channels which ERPs were not designed to address. Beyond primary web or foot traffic, most businesses need to address OMS management from drop-ship partners, online marketplaces, or spin-up sub-brands on top of the same architecture. That needs to be a seamless experience for both the customer and you.
Legacy partners are notorious for giving you whatever you want – for the right price, on a non-negotiable timeline. Do you have 2 years for your on-premise solution to do things it was never designed for? On top of that, if your ERP solution is everything for everyone, have they taken their eye off perfecting their core solution? Likely.
Related: 6 Things WMS Software Companies Left Off Their Brochure
OMS management software configurability: The best of all worlds
Deposco’s dedicated OMS management system does all of the above, out of the box. Being deployed on a single codebase with a defined, purpose-built, not-acquired schema means that it just works.
As part of your growth journey, order management features can be turned on when needed, ensuring that the deployment is nimble and configured; not customized.
Custom software has the old dilemma of good, fast, affordable – pick two. Configured OMS management solutions with adaptability mean that you don’t have to choose. You get all 3.[demo_form title=”Improve your OMS management!” lead=”Talk to one of our supply chain experts today!”]
ERP vs OMS: Scalpels over sledgehammers
There is a right tool for every job. While you can use the hammer, it’s not a great outcome for the screws. Are you comfortable depending on your legacy ERP system to handle orders? It was built with accounting and finance in mind. Many will claim they can do it, they might even offer a module. But that’s no different than taking advice on your plumbing from the electrician.
OMS management systems were designed for nuances in processing orders through a network of options. Older systems apply broad rules by segmenting known variables into buckets. That’s not good enough in the modern Direct-to-Consumer (DTC) environment.
Instead of relying on fixed rules that ignore order nuance, wouldn’t it be better to leverage frequently refreshed service-provider data to make the best decision for your client dynamically?
Rates, provider availability, mode of transportation, and product dimensions are constantly evolving. If you didn’t need it on January 1, did you even load a rate table for LTL from New York to Norfolk? Your carrier may have gotten better rates since then as well. Cloud-based OMS management systems don’t have that issue. You call your carrier network’s APIs and you get an answer to your specific problem. Related: How to reduce shipping costs 2-20% in just a few clicks
Right tool for the right job, or you can choose to leave money on the table.
Modern, connected, ready for anything
The movement to online business reduces the barriers to discovering small and mid-market businesses. But this introduces the risk that all companies are assessed equally in consumers’ minds.
Your technology needs to deliver strong and keep up because there is the expectation – fair or not – that you can punch above your weight class and keep doing so in every order.
Modern OMS management systems – specifically those built cloud-native from the ground up – tackle the problem differently. Your organization benefits from connections between focused solutions, leveraging data from in and outside the organization to make the right decision each time. Not getting stuck in between patches with long stretches of feature and function gaps. You get data from partners at the rate it’s produced, not when tables are updated annually.
Are you ready for whatever the market throws at you? Meet Deposco’s OMS software