Businesses are increasingly looking to innovative solutions that streamline their operations. One critical aspect of business operations is order management, which plays a pivotal role in ensuring customer satisfaction and efficient supply chain management. The future state of commercial order management systems promises to revolutionize this essential function, solving current problems while expanding capabilities to meet the demands of tomorrow’s businesses. With new entrants and expanding use-cases in non-traditional industries, will the definition of OMS get clearer or the definition ‘fuzzier’?
Current Challenges in Order Management
Before delving into the future, it is crucial to understand the problems that order management systems currently aim to address:
- Orchestration: Many businesses struggle with data scattered across multiple platforms, making it challenging to maintain a centralized and up-to-date view of orders, inventory, and customer information. This fragmentation often leads to errors and delays. Just as a PIM orchestrates product-information, the OMS orchestrates the flow of orders (data) across the entire systems landscape.
- Inventory Optimization: Optimizing inventory availability across channels is a complex task. Over-exposing inventory leads to poor customer experiences, but under-exposing leads to lost sales. The controls are increasingly found in more mature OMS solutions, but the challenge currently is that those roles are heuristics (rules-based) still.
- Scalability: Traditional systems may struggle to handle the growing volumes of orders, especially for businesses experiencing rapid expansion. Scalability is a vital concern to ensure smooth operations during periods of high demand. Estimated delivery-dates, for example, are increasingly happening at the PLP… can current systems keep up with that scale?
- Integration: Seamless integration between the systems involved in capturing, fulfilling, servicing and returning orders is often a challenge, resulting in inefficiencies and data discrepancies.
The Future State: Solving Today’s Problems
I’ve been fortunate enough to see the evolution of order management over the last 15 years in the space, 40 projects in total.
From the first screens in 2008 at Manhattan Associates to my time today across a handful of industry solutions (and for a year within a retailer) here are my predictions for where the market is heading.
AI-Driven Inventory Management:
Artificial intelligence and machine learning algorithms will power predictive inventory management, optimizing stock levels in real-time based on historical data, current demand, and market trends. This will reduce costs and minimize stockouts. Onera, a ToolsGroup company was working on this but got bought… I believe COTS OMS providers may either built this or buy it in the coming years. Keep an eye on Retalon.
Scalability and Cloud Solutions:
Cloud-based order management systems have now become the norm, offering unparalleled scalability to accommodate growing order volumes and business expansion. This flexibility ensures businesses can adapt to changing market conditions. Yet, there are still many commerce organizations deployed on premise. Moreover, I still see most OM providers only deploy quarterly major releases vs. only few have truly continuous deployments for fixes and new functionalities. Salesforce is and has been out in front on CI/CD, but Manhattan Associates and Körber Supply Chain both do a great job on major/minor releases.
Enhanced Customer Experience:
Future systems will focus on enhancing the customer experience through automation and personalization. AI-powered chatbots and virtual assistants will provide real-time order updates and answer customer queries, ensuring a seamless experience from order placement to delivery. Most chatbots I see still do not fully integrate into the OMS, and specifically they don’t do this proactively and with an understanding of the likely reason a customer is needing support. While not an OMS, Zendesk has been pushing forward heavily here. I could see more OM provider with turnkey solutions to Zendesk and other customer-interfacing / ticketing systems.
Integration and Interoperability:
The future will witness the widespread adoption of open APIs and integration platforms, making it easier for businesses to connect their order management systems with other crucial software applications. This integration will streamline operations and eliminate data silos. I see the “ERP vs. OMS” discussion, relative to order-flow, heating up in the coming years. ERPs will always be around to support back-office functions, but the middle-of-house functions for inventory availability, orchestration and service in the front-of-house will still need a focused solution. You’ll see more players in the MACH Alliance grow in the coming years, and I’m banking on Fluent Commerce as one of the only OMS providers solely focused on the OM space.
Expanding Capabilities for the Future
As order management systems evolve, their capabilities will expand to address emerging business needs:
- Supply Chain Visibility: These systems will offer end-to-end supply chain visibility, enabling businesses to track the movement of goods from suppliers to customers in real-time. This will enhance transparency and reduce the risk of supply chain disruptions. Blue Yonder has been making traction here since acquiring Yantriks solution, keep an eye out.
- Customization and Personalization: Order management systems will increasingly leverage customer data to provide personalized product recommendations and promotions, further enhancing the customer experience and driving sales. I’m interested to see how B2B use-cases evolve here in the future!
- Accelerated, Turnkey, Integrations: At a conference in May in Vegas I stood up and talked for a few minutes on how easy it will be using Chat-GPT like functions to almost instantaneously create ‘connectors’ for all the major supporting commerce functions moving forward. No more months of waiting on tax/fraud/payment/email connections.
- Environmental Sustainability: Sustainability will become a key focus, with order management systems helping businesses reduce their carbon footprint by optimizing shipping routes, reducing packaging waste, and minimizing returns. IBM showcased a lot of this at their TechXchange conference last month and currently organizes their OMS within a Sustainability suite.
The future state of order management systems is poised to revolutionize the way businesses handle their operations. “e-Commerce” is dead… “Commerce” is where we’re evolving, and OMS will be front and center in that transformation. I’m very bullish on this space, specifically the point of order-capture and how the post-purchase experience shapes and retains customer trust.
