The ‘Unowned’ Function: Order Management in Commerce
In the intricate and multifaceted world of Commerce, the order management function plays a pivotal role. However, unlike many other functions within a company, order management doesn’t typically get ‘owned’ by one core group. Instead, it remains a shared responsibility, and for good reasons. In this blog, we’ll explore why order management is inherently a shared function, examining key aspects through the lenses of a Chief Information Officer (CIO) and a Chief Customer Officer (CCO).
Shared Functionality: A Necessity
Order management in an average company encompasses a myriad of tasks, from inventory availability, to order creation, orchestration and processing, to fulfillment and returns. These tasks require collaboration and coordination across multiple departments, including sales, inventory management, customer service, and supply chain / logistics.
From a CIO’s perspective, the need for shared ownership is evident in the technological aspect of order management. The systems and software used for order processing are complex and often require integration with various other platforms. Effectively this is the only solution that spans across front-of-house (FOH), middle-of-house (MOH) and back-of-house (BOH) application sets.
- FOH is the commerce platforms and some aspects of MarTech
- MOH is inventory availability rules and order-management along with supply-chain
- BOH is financials / inventory ownership and of course the ERP.
So, as the CIO/CTO, who do you have manage the solution, its cost and staffing and technical roadmap?
Customer-Centricity and Order Management
Now, let’s shift our focus to the perspective of the CCO. In an age where customer-centricity is paramount, the order management function is crucial. The customer’s journey doesn’t end with a purchase; it continues throughout the order processing, shipping, and delivery phases. This is where the importance of shared ownership comes to the forefront.
Consider a situation where the customer-service department “owns” the order management process. They might prioritize real-time tracking and quick order processing but may overlook the importance of accurate product information or understand the impact the labor-capacity plans at fulfillment centers have to do with the estimated-delivery-dates the customer saw (which are now in the past!). On the other hand, the logistics department, if solely responsible, might excel at efficient delivery but could disregard the overall customer experience.
Shared ownership ensures that the interests of the customer are central to every aspect of order management. The CCO’s role in this scenario is to ensure that customer satisfaction is not compromised at any stage. This requires collaboration between departments, aligning goals to create a seamless and customer-centric order management process.
Real-Life Examples: A Closer Look
Let’s examine some real-life examples to illustrate why order management doesn’t get owned by one core group.
- Inventory Management vs. Sales: Consider an average apparel retailer. The inventory control teams within Store-Ops must ensure that products are available and accurate, so that Omni-Operations super-users in IT can update the rulesets for availability…. so that when customers place orders they see the accurate inventory. But, the eCommerce team is concerned with generating sales quickly and meeting monthly goals, while the customer service team is being bombarded with chats and calls (without a call-deflection strategy) because the whole process is disjointed and they’re left hanging out to dry waiting for their products.
If one group takes sole ownership, the balance between inventory levels and sales velocity may be disrupted, and the customer will feel it and CLV will be lost as a result.
So, should OM function be owned by one team?
In Commerce, the underlying processes and technologies needed to scale a business while continuing to serve customers is daunting. The complexity of technology, the diverse tasks involved, and the imperative of customer-centricity all necessitate collaborative ownership.
- From the perspective of a CIO, it’s clear that technological dependencies span various departments. Most, for now, have the VP of Supply Chain ‘own’ the solution, but are expected to work collaboratively up and down the organization.
- For a CCO, shared ownership ensures that the customer’s interests are prioritized throughout the order management process.
In the end, a well-orchestrated and shared approach to order management benefits not only the company but, most importantly, the customer. When multiple teams collaborate, the customer receives a seamless and satisfying experience from the moment they place an order until it reaches their hands, and beyond.
While there is no one-size-fits-all answer here, largely companies are still lacking a “Commerce Operations” team that is centralized between all these functions which operates with accountability and a mandate but with flexibility and influence.
Want to know more about how we can help you think about your “Commerce Operations” org-design and its impacts? Email us at ‘oxm@perficient.com’ to start a discussion
