Magazine Article | December 15, 2015

Order Management: The Backbone Of Omni-Channel

By Matt Pillar, chief editor

January 2016 Innovative Retail Technologies

Matt PillarWe’re moving rapidly toward an all-out revolution at the POS. A throw-the-baby-out-with-the-bathwater, wholesale rip-and-replace of the transaction systems we’ve known since the advents of POS, ERP (enterprise resource planning), and e-commerce.

That’s an all-at-once exciting and inconvenient truth for retailers.

It’s exciting because a single, omni-channel transaction platform is coming into view. This notion of unified commerce — the convergence of systems necessary to intelligently surface information from any channel to the point of service or sale where it’s needed — is no longer a skunk works operation. Few retailers on the path to omni-channel would argue their common goal: a consolidated platform that eliminates worries about data interchange, multiple interfaces, and disparate transaction engines.

POS and ERP providers are racing toward it, and they’re increasingly transparent about their progress. Consider the technology hurdles that have already been overcome; modern digital commerce engines are scalable, secure, and incredibly tunable to meet consumers’ personal expectations.

It’s inconvenient because very few merchants have the stomach — much less the budget — to re-architect their core transaction systems. For those who are ready for the task, challenges remain, primarily on the store side of the equation. Some of those challenges are operational, such as linking the myriad jobs that have to happen in the omni-channel-enabled store, the stuff that doesn’t apply to single-channel retail.

Other challenges — and the more daunting of them — are technical.

  • How do you marry cash drawer reconciliation with the near real-time nature of digital, card-not-present transactions to satisfy accounting and finance departments?
  • How do you gain a clear view of a customer’s transaction history across all channels? It’s straightforward in the digital/call center world, but not so much in physical stores where transactions are so often anonymous.
  • How do you begin to unravel the rat’s nest of chewing gum and baling wire on the back end to create some level of inventory visibility across the store network, DCs, and the extended supply chain?

That’s where the OMS (order management system) comes in. It’s the new spine of the retail transaction engine, and it’s the bridge to tomorrow’s omni-channel sales platform. Virtually every omni-channel retailer is at least experimenting with store-level omni-channel services, such as buy or reserve online and pick up in store, buy online/return to store, and endless aisle capability. More progressive retailers are extending omni-channel to include any-channel visibility into order status, control of appeasements, and the payments life cycle. Those services, and the store-level tasks associated with each, are all fed and managed by the modern OMS.

For those reasons alone, I think any consideration of your path to an omnichannel transaction platform should begin with the OMS. In these early days of omni-channel, if you’re considering handing over the keys to a vendor that touts a unified commerce platform, should that vendor’s roots be planted in financials (ERP), stores (POS), or the Web (e-commerce)? Or should those roots be planted in a system designed for the modern era — one that pulls the customer data, inventory availability, and execution direction that enables distributed enterprise sales and service together in one, channel-agnostic environment?

Until the aforementioned barriers to a single, any-channel commerce system are cleared, there’s no case for ditching POS, ERP, and e-commerce for a half-baked platform that’s nothing but an omni-channel panacea. But, if I’m betting on a large-scale investment in a new platform in the nottoo- distant future, I’m putting strong consideration into the horse with no biases toward any one channel.