Order management and Order Management Systems (OMS) have become extremely popular as the primary support for companies evolving from traditional siloed retail into omni/connected/seamless ecosystems and experiences (today is not the day to debate buzzwords). As with many standards, adoption does not always equal understanding, and many of us can find ourselves struggling to overcome common challenges in the OMS space. In this article, you will find the top 5 challenges we regularly encounter with our clients and our thoughts on how to address them.

1. OMS Goals Are Not Aligned to Your Company Strategy

Having misaligned goals is not a problem unique to order management, nor is it exclusive to the initial effort in launching a formal order management program. An OMS, like any major solution, will be most successful when it aligns with clear, well-defined, measurable goals that support the success of your overall business strategy.

Simply processing orders and checking a box is rarely enough to ensure your OMS is contributing to your company’s overall success. Have you defined your key metrics and their baselines? If not, you may find it difficult to get ahead of the challenges your business partners are facing with proactive solutions, or even to provide a clear explanation of the current OMS performance. You may also be in the uncomfortable position of having uninformed teams questioning the wisdom of further investment in your OMS as a route to increase their own funding. But what have you done to better inform them?

As a first step, before you run off and set OMS goals, make sure you have a standard baseline of defined and regularly measured metrics. These should be shared with your key partners and made available to anyone interested. From there, identify which metrics need to change to support the direction your company is moving in. Are you on a growth path providing new experiences, options, and/or expectations for your customers? Has your past growth resulted in a challenged bottom line? Have you heard someone say, “We need to grow our business profitably,” in other words “make more money while spending less”? These are directional indicators of where you should focus your efforts, but they lack the details necessary to be effective in writing your goals and defining success.

Following these steps will ensure you are providing measurable value to your organization:

• Understand your business: Whether you are a technology guru or an operations hero, you can’t be effective without knowing what is important to your business and where your company positions their value. Some companies are experience focused, where their product, though still very important, is secondary to how customers interact with them. In these organizations, OMS will play a part in delighting the customer and driving repeated engagement. Some companies are very product focused (referring to the products they sell, not necessarily the software products we manage), where having the best product is their top priority, far ahead of anything else. Often in these organizations, simply aligning with industry standards from an order and fulfillment perspective is success. The effort to stand out in these scenarios may vary, but at the foundational level, understanding where your company holds value is critical to building your own OMS goals and strategy.
• Understand your company strategy: Whether it has been provided to you or not, your company likely has a documented strategy outlining the business priorities and plans in place for at least this year, if not for the next three to five years. Work with your leadership team to gain access to and understand this strategy from the top level.
• Identify which company goals align with the OMS: Take note of goals within the company strategy that can be directly or indirectly impacted by the OMS:
  • Direct: Introduce 2 new selling channels to get closer to our customers.
  • Direct: Reduce order fulfillment costs by X%.
  • Indirect: Reduce operational spend by X%/$.
  • Indirect: Increase customer purchase frequency by X% per year.
• Align with your leaders: Discuss your direct leadership’s goals and how they plan to support the overall company strategy. Again, find areas of direct and indirect relation to the OMS.
• Align with your partners: Gain access to the goals or goal planning of adjacent domains. While this can be assisted by your leadership, ideally, you are connected with most groups at your company in some way, as the OMS is central to your company’s transactional success. Do these teams have goals that depend on the OMS to achieve success?
• Influence adjacent team strategies: Don’t just listen, provide options that leverage the OMS in support of adjacent teams’ plans. Instead of everyone running off and doing their own thing, find opportunities to share and collaborate on goals and execution. You may find some overall spend efficiency in taking this action.
  • Example: Your Marketing team plans to introduce a loyalty program intended to support the company’s goal of increasing customer purchase frequency. In the discussion around how these goals will be executed,  you can introduce OMS capability ideas that enhance the value of being a loyalty member, or even a higher tier within a tiered program. Some possibilities include:
    • Free shipping service upgrades
    • Fulfillment prioritization to avoid fulfillment failures due to inventory issues
    • Exclusive self-service options

• Be candid with your partners: No, I didn’t say “be rude,” but don’t be afraid to ask how a specific plan actually accomplishes a team or company goal. That’s one of the benefits of having defined goals—they allow us to focus our efforts on the right actions, rather than just taking on as much “value” as possible.
• Share your OMS goals and strategy early: Don’t wait until everything is “baked” to make others aware of your goals and strategy plans. Show them early and often. Solicit feedback and identify areas of synergy and conflict. You will help yourself and your partners settle on the most effective plans when you support each other.
• Practice agility with your goals: Just like in agile software development, don’t set your plans in stone with the expectation that nothing will change. Your company may change direction, and the assumptions driving your plans may prove challenging in supporting the company strategy early on. You can always pivot your approach to impact the results, but sometimes the assumed value of meeting a goal just isn’t going to play out as expected. Catching this early on can simultaneously uncover what will better accomplish the desired result. If changes are needed, partner with your leaders and cross-functional partners to align, adjust your plans, and communicate them outwards. Others seeing that you are focused on value supporting company success is always a positive spotlight to be in.

2. Capability Domains Are Not Defined

Is your OMS doing something that isn’t something an OMS should be doing? Maybe you have a Commodity Off-the-Shelf (COTS) OMS product that offers a solution to a problem that isn’t typically aligned with an OMS as an additional value add. It can be easy to take that on and “plug the hole,” but is that the right approach? Alternatively, you may have a powerful team managing a custom solution built and managed in house. It can also be easy to take on more ownership by introducing capabilities high up on your business team’s radar. Why not? You might get more funding, a larger team, and more visibility from those making promotion and compensation decisions.

As exciting as that sounds, it could cost you more in the end, and you may find yourself having an uncomfortable conversation. This could lead to less exciting work as a new technology leader comes in and wants to “clean-up the lines of capability ownership,” resulting in your team’s next focus being the difficult task of removing the capability from your OMS. Or worse, that conversation may require you to reduce the workforce you grew around the capability, leaving your OMS largely in a “run only” mode until your domain is cleaned up.

The reality is that while an OMS leverages a vast array of capabilities, it doesn’t own most of them. Before introducing a new capability to your OMS, ask yourself if it falls directly into one of the following core capabilities:

• Order lifecycle management: The systematic processes, workflow(s), and action(s) taken to ensure accurate and efficient fulfillment of orders based on the order specifications
• Inventory availability: The view of network and facility level inventory that is available to sell

If the capability is outside of these marco-level areas, you should be asking if the OMS is the right owner. You wouldn’t buy a farm just to have it. It takes a lot of work and specialization to ensure the investment carries the most value. Don’t take on capabilities just to grow your ownership. That said, once the appropriate domain is determined, if the capability impacts orders, you should work with an aligned domain owner to ensure OMS can and will support the new feature(s).

It is important to recognize that domain assignments are not hard rules and may flex based on your organization’s definition. Additionally, your organization may not yet be prepared to take on capability mapping and/or capability domain assignments. In any case, take this input as directional and work with whomever owns architectural technology decisions at your company to make the best decision you can. For those on a COTS OMS solution, the companies providing these tools care about making your life easier and offer these extended solutions to support companies with limited resources and technology-driven capabilities. Sometimes, that solution is the right one for your company. Just be sure you take the time to make an informed decision.

3. Master Data Management That Doesn’t Scale

Most companies start small and work their way up. Whether due to the availability of technology solutions at the time, or just due to the limited financial resources of a startup, many companies start with data manually managed in documents. Over time, one or more technology solutions are introduced to manage their data and overall business.

Why does this happen? More often than we would like to admit, Master Data Management (MDM) work is viewed as lower in priority. For many, it can be the least interesting work, or it might be the work with the lowest visibility to overall value at a company. So we continue to manage master data on spreadsheets. Don’t feel bad if you are managing your data manually; you’re not alone.

That said, managing data on spreadsheets means that your sophisticated Order Management System is being foundationally powered by data manually curated by one or more users in a document on a shared drive somewhere. This can result in delays in your initial OMS implementation and increased manual work for those managing the data as the required attribution within this master data grows over time to support new capabilities.

OMS isn’t the only platform suffering from this, either. As our technology and experiences become more and more connected on the path to a seamless customer experience, the same master data is needed to drive capabilities in other company tools. It is necessary to make the investment at the appropriate level (depending on your company and data size) with the goals of reducing operational costs, reducing errors, and improving the speed to market of new capabilities and software solutions. You’ll be happy you took the time today to simplify your needs for tomorrow.

4. OMS Is Expensive

Relative to other investments in your organization, OMS may have one of the larger dollar amounts next to it. But would you be able to offer the experiences and channel opportunities driving your growth without it? So what’s really happening here? Maybe you built when you should have bought a COTS solution. Maybe your company is product focused (remember #1 in setting goals?) and you need something to execute efficiently in line with industry standards—but not as the source of growth. Or, the hard pill to swallow may be that your delivered roadmap items are not performing as expected, especially when compared to the investment to accomplish them.

Whatever is driving this perception that your OMS is expensive, you can take the following steps to change the perception to one of value:

• Align your goals with your company strategy: Sound familiar?  Aligning goals will ensure the OMS directly supports overarching business objectives. This will drive efficiency, growth, and a better customer experience.
• Remove blockers: Get the hurdles out of your way that slow down your new capability activation (e.g.,. solve your MDM problem). We will often see material benefits in having the foundation ready to support new capabilities.
• Do the right work, not the most work: Again, align your efforts to your company strategy while planning work to your capacity, rather than constantly building team capacity to do more work. Taking on everything that’s thrown at you can easily result in unstable team growth and increased costs to manage and deliver. It also reduces the overworked team’s ability to practice basic agility in delivering iterative improvements on your path to desired results. I will always recommend doing fewer things of higher value that support a win/win/win across spend, delivered value, and your capability delivery effectiveness.
• Build your OMS network: It isn’t enough to know what is happening in your competitive set or what’s on the roadmap for a COTS provider. You need to understand what is and isn’t working. This doesn’t mean sharing material non-public information, literal performance, or the recipe for your secret sauce. It does mean that just because your primary competitor is doing same day delivery doesn’t mean they are seeing success.
• Establish “grow profitably” as a guiding principle: Always find an opportunity to save within your growth initiatives. Don’t isolate your thought process around improved topline sales only. If you do,  you may eventually be forced to rewrite a roadmap focused purely on cost savings at the risk of falling behind in the value capabilities you offer. In other words, don’t wait for someone to say “grow profitably.” Instead, live this concept every day as you make the next decisions on how your funds are spent.

5. I Don’t Know What To Do Next

“I have an OMS, it is performing pretty well, but I am struggling to know what to do next.” Many of us have said this at some point as we have grown in our careers in the OMS space, and there are a few problems causing this:

Problem: To date, the capability to easily A/B test new things is not equally supported for OMS and fulfillment in the way you may see for something like an ecommerce experience.

Solution: Don’t let the difference in testing supported by technology block you. Leverage your configurations to create pipelines for testing. “Manual” is not a dirty word, it’s just something we prefer to avoid in our base workflows. Take on manual efforts before building deep. What you are looking for is the lowest effort to prove a hypothesis which is often either an impact to customer adoption, quantifiable experience improvements, or savings. Take on partners to brainstorm the best manual solution you can, set goals, define success, timebox the process, and execute. It is easier to ask for a small amount of money to justify a larger spend later than to ask for the big dollars with no proof.

Problem: You are not active with your COTS solution and its roadmap.

Solution: Don’t just spectate or join calls while multitasking. Your COTS solution designed to address problems and determine whether it can solve them. Many of you have been told, or have heard someone say, that you should ask a question if you have one, or make a comment that isn’t being addressed, because someone else in the audience is likely thinking the same thing. Your voice may be the one that sparks another customer’s input, driving toward the capability you need next from your provider. Many providers have product councils for this purpose. Make sure your company has a voice, even if that means you aren’t taking on that role. You won’t get what you want if you don’t ask for it.

Problem: Your COTS solution limits the ability to take on your own improvements.

Solution: Though this is becoming much more rare, a purchased solution, in certain circumstances, may limit your ability to own how your solution provides value. Does this mean you have outgrown your provider? Is the next step a request for information (RFI), request for proposal (RFP), and/or a request for quotation (RFQ), along with a new build vs. buy decision? Maybe. Or, should you be looking at solutions designed to augment OMS capabilities through user exits in the order lifecycle? Just because your provider isn’t there doesn’t mean there isn’t a solution for what you want without planning a new OMS implementation. Further, you may be able to build the capability externally with your own team(s) and leverage the same exits to accomplish the need. Be creative not only in what you are introducing, but also in how you are accomplishing the change.

Problem: Your built platform’s product manager(s) and/or owners have ignored the COTS ecosystem, resulting in a solution that serves your business today but often falls short of enabling you to lead and influence with a solution ready for tomorrow.

Solution: Get ahead of this early! Whether you are a product manager/owner, or not, it is critical to know what is being offered by the competition. This includes not only your business competition but also other OMS options in the market. If your solution is not competitive with COTS solutions and you end up building yourself into a corner or simply lacking standard capabilities, your company will likely start to evaluate whether the build was the right decision. In this case you will face a highly challenging and disruptive experience. Don’t fall behind by only building solely for your business because you can. Sometimes it helps to imagine that you will be offering your OMS as a COTS solution for others, whether you actually plan to or not.

Problem: You need a fresh perspective to identify your hidden opportunities.

Solution: Take on a partner. Similarly to how you would evaluate software solutions, see who in the market is providing trusted strategic analysis and direction. Meet with your top options and determine the best fit for your company, especially as it relates to your specific strategies, challenges, and existing technology. Your chosen partner can support you in identifying technology, capability, operations, or even process related opportunities.

At the end of the day, the challenges in order management success are like many other challenges we face—the immediate impacts can feel much more complicated than they actually are. Take the time to evaluate your opportunities and break them down to the basics; you will often find that the solutions aren’t that complicated. Every business is unique in its own special way, so use these insights as a guide rather than a rule book. And as always, if you get stuck, ask for help.