Your Guide to Distributed Order Management
E-commerce continues to grow, and as a result, customer expectations are changing. The customer does not expect a similar experience across channels. Instead, they are seeking out a brand experience that allows them to interact through multiple channels during the shopping journey. In the end, it all comes down to whether or not they can receive the product they want, when they want it. This puts product availability at the heart of omni-channel operations. And the key to delivering the product is distributed order management.
Companies are facing a number of pressures today when it comes to meeting customer expectations. First is creating a unified buying experience across channels. Customers are not necessarily looking for a similar experience across channels; each channel has its own interaction point and is designed to deliver a different experience. However, customers need to be able to find the product they are looking for in the appropriate channel.
Second is the ability to capture orders easily. With a wide variety of selling channels available, and differing flow paths for different business models, companies need to be able to easily and accurately capture all order information.
The third pressure is to deliver orders rapidly. Customer expectations for expedited delivery are becoming more commonplace, in both the B2B and B2C world. And as the lines continue to blur between B2B and B2C, and the model expands to a B2B2C focus, order fulfillment processes become more complex. As a result, this is putting added strain on fulfillment operations.
Distributed Order Management
To combat these pressures, companies are continuing to look at distributed order management. Distributed order management systems allow the company to capture all information in the order management process across all relevant channels. This includes the entry of the order, sourcing, payments, and fulfillment. It also spans all channels of sales operations. The main benefit is that it doesn’t matter where an order originates. All fulfillment channels have access to the information and the company can appropriately allocate the inventory depending on stock levels, demand requirements, and timing of fulfillment. To the consumer, this is all a seamless experience, and that is all they expect. The customer wants to be able to order a product online and pick it up in the store. Or, if they are in the store, and the store is out of stock, they want it shipped to the house. The reality, however, is that too many retailers do not possess these capabilities right now.
There are a few key growth drivers that are pushing distributed order management technology. The first is the move to the cloud. Cloud is making implementations easier, as updates can be automated and the customer can transition to the new version a lot quicker and easier. The initial resistance came from the omni-channel shift – inventory and location information into the cloud was seen as too much data to not have “on-hand.” But customers have seen the benefits and this is no longer an obstacle.
A second growth driver is the use of artificial intelligence and network optimization. Companies are using machines to learn more about every aspect of the order management process. This in turn is helping to make better informed decisions on how to fulfill an order that will not only satisfy the customer, but also be done in the most cost-efficient manner.
A third growth driver is the seasonality of items. The lifecycle of an SKU is getting shorter and shorter, especially in e-commerce. The SKU is designed, received, and pushed to the market. It is very rare to find the same product six months later, so replenishment is nearly non-existent. Without re-stocks, it makes fulfilling from the appropriate location that much more important.
A final growth driver is the changing complexities of orders as B2C order fulfillment is bleeding into the B2B world. Customer fulfilment demands in the B2C channel will start to become the standard in certain B2B channels, thereby encouraging growth of order management solution in the B2B market. While the B2B application for an omni-channel order management system is still lagging behind its B2C counterpart, it is a market that is prime to grow.
Distributed order management is becoming increasingly important, if not increasingly complex, as the world moves to a more integrated omni-channel environment. While the adoption rate is lower than it should be, distributed order management systems will need to come to the forefront of the omni-channel experience. With the e-commerce market poised for significant growth, so too is the market for distributed order management.