Order Management Systems The Key to Successful Order Management in Digital Commerce
W H I T E PA P E R
2
Table of contents
Introduction ....................................................................................................................................................................4
C H A P T E R 1 ERP and OMS: the whole is greater than the sum of the parts ..........................7
C H A P T E R 2 The evolution of order management systems .............................................................9
C H A P T E R 3 Bridging the gap: order management systems as the key to
digital transformation ...........................................................................................................................................11
C H A P T E R 4 Order management as e-commerce middleware .................................................13
C H A P T E R 5 Intershop Order Management: the solution for SMEs .........................................15
Seven key features of an order management system .......................................................................16
Customer Case Study .............................................................................................................................................24
3
Introduction
As customers become increasingly comfortable with
multi-channel commerce and online shopping technol-
ogies, they are developing highly specific preferences
and dictat to vendors how, when, and where they want
to shop. They expect to be able to connect with a vendor
from any location, using the channel of their choice, and
to be able to switch seamlessly between touchpoints at
any time.
Nevertheless, many vendors still find it difficult to man-
age cross-channel order processes, to integrate new
or existing sales channels, and to orchestrate customer
orders smoothly. They need greater flexibility to meet
growing customer expectations and to accelerate their
access to untapped markets and target groups.
In order to provide customers with a seamless shop-
ping experience across all channels, vendors need an
equally seamless and efficient system for orchestrating
their order processes. They have to combine back-office
systems, warehouse locations, suppliers, channels, and
partner systems to create a homogeneous, effective, and
flexible e-commerce solution that is capable of fulfilling
expectations in an increasingly competitive marketplace.
E-commerce continues to evolve and has now entered a
new dimension. Digitization of channels is no longer the
sole issue, today’s e-commerce is about transforming and
combining a wide range of mission-critical processes to
create a holistic business strategy with cross-system solu-
tions that are ready for the digital future. At the center of
this strategy is the individual customer with their specific
and ever-changing needs.
In this white paper, you will learn how an order manage-
ment system (OMS) can help your company meet the
growing challenges of e-commerce by meshing multiple
processes while simultaneously reducing costs through
the automation of increasingly complex processes – as
well as optimizing and extending your value chains.
4
It’s time for intelligent order management
Many B2C and B2B companies now face increasingly
complex digital markets, with all the opportunities and
challenges they present. On the one hand, digital sales
processes offer more efficient access to customers and
markets. On the other, companies have to connect an
increasingly diverse range of sales channels using digital
technologies. The result is a continuous increase in the
complexity of business processes and IT structures.
It is therefore no surprise that integrated, multi-channel
order processes are becoming an increasingly hot topic
for both B2C and B2B vendors. Many SMEs currently use
a range of solutions to handle incoming orders. If they do
not have a dedicated order management system (OMS),
they typically use their e-commerce platform, their enter-
prise resource planning (ERP) system, or a custom-built
solution.
Unfortunately, these solutions are rarely able to cope with
the increasing complexity generated by the growing
number of channels that need to be integrated. Often,
e-commerce platforms, for example, can only deal with
orders received online – i.e., not from brick-and-mortar
stores – while ERP systems take a strict business view of
orders. So the two systems have overlapping capabilities,
but the only way to create uniform processes across all
channels is through complex and costly modifications.
A dedicated order management system, meanwhile,
provides integrated processing of incoming orders from
all available channels – yet such systems are still widely
misunderstood and underestimated. Typically, people
think an OMS is just a tool for capturing orders, process-
ing them, and forwarding them to a warehouse loca-
tion. In reality, they are capable of much more. Their key
strength lies in the fact that they are specifically designed
for multi-channel order processing, making them the
ideal resource for digitally connecting the different chan-
nels. But that is not all. They also make it easy to integrate
totally new business processes into existing IT land-
scapes. Therefore, it is hardly surprising that nine out of
ten companies that currently use an order management
system consider it a key digital tool for connecting their
sales channels (93%)1.
A fully integrated OMS uses automation to process orders
smoothly and efficiently. It collates all information on cus-
tomers, orders, and warehouse inventories in a central
resource that is visible to all users. This enables compa-
nies to make faster decisions and respond with greater
flexibility to changing market conditions.
In addition, an OMS provides a 360 degree view of each
individual customer and all their orders – regardless of
which channels were used. Serving as a central hub, it
merges data and processes from multiple channels and
offers additional specific and customer-oriented func-
tionality that increases customer satisfaction across all
channels.
1 Intershop B2B Commerce Report – Companies with More Than 100 Mio Revenue 5
x Customer orders from all sales channels (e.g., online
stores, EDI, offline stores, or field sales staff ) are
merged into a single system. This enables compre-
hensive analysis of all transactions, both in overview
and in detail. It also allows companies to tailor their
offerings to customers across all channels, thereby
increasing cross- and up-selling potential as well as
customer satisfaction and loyalty.
x All available inventories can be shared across the dif-
ferent channels. If demand in one channel is lower
than expected, the excess inventory can be made
available to other channels. Conversely, if demand in
a particular channel is higher than expected, it can
be met with inventory from other channels, directly
from a central warehouse, or from a dropship sup-
plier. In short, an OMS provides companies with real-
time access to all available inventories in their offline
stores, stock held by suppliers, and inventories within
the supply chain. Armed with this information, ven-
dors can commit to deliveries immediately and create
custom delivery processes.
x A holistic view of all available inventories at all loca-
tions reduces distribution costs. Companies can
optimize the speed and cost of processing each
order while also minimizing integration gaps. Staff no
longer has to call other locations or suppliers to check
available stock. The OMS coordinates every order
automatically in line with the respective customer
preferences, specific order-processing rules, or infor-
mation provided by offline retailers and suppliers.
x Customers can view all their current and past trans-
actions at any time, regardless of whether those
transactions were conducted online, by phone, or
one-to-one with a field sales representative. The infor-
mation they receive is consistent across all channels,
whether mobile device, desktop computer, customer
hotline, offline store, or direct contact with field sales
staff. The combination of complete transparency of
data and processes with consistent real-time infor-
mation across all channels has a positive impact on
customer satisfaction and loyalty while also enabling
additional customer-oriented services.
x For companies, having a 360 degree overview of all
customer transactions and channels makes for more
efficient business processes that result in better and
faster decision-making.
The most imp or tant b enefits of a t ypic al OMS include:
6
C H A P T E R 1
ERP and OMS: the whole is greater than the sum of the parts
Customers, inventories, and orders have always been
incorporated into enterprise resource planning (ERP)
systems – which is why order management has tradition-
ally been regarded as an ERP task. However, this framing
has been changing in recent years as growing market
volatility, the demand for seamless omni-channel com-
merce, and new digital business models create a need
for more agile collaboration and deeper integration of
IT systems, suppliers, and channels.
ERP systems are increasingly reaching the limits of their
capability, as they are simply not designed to deliver
this agility in operational settings². Rather, they were
conceived as enterprise-centric applications that repli-
cate internal business processes in standardized, digital
forms. Conventional ERP systems can no longer meet the
demands of dynamic e-commerce with its rapidly evolv-
ing markets and customer expectations. The key reasons
for this are as follows:
x ERP systems replicate internal business processes that
are usually slow to change and only do so with input
from multiple departments.
x Many ERP systems in use today were designed many
years ago and are no longer adequate for contempo-
rary omni-channel e-commerce.
x ERP systems can only access inventories after they have
been added to the system in the respective warehouse
or offline store. ERP systems are often unable to display
dropship stock or inventories held by external suppliers
or third-party logistics (3PL) providers.
x ERP systems typically handle inventories separately
based on channel and supplier. It is often difficult to
create an overview of all available stock.
x ERP systems do not provide sophisticated rules for
dynamic distribution of order items to multiple ware-
house locations or suppliers. If a customer submits
orders via multiple channels, they cannot be merged
to create a single order.
2 http://it.toolbox.com/blogs/inside-erp/should-you-use-agile-for-your-erp-project-622482 https://www.cio.com.au/article/185655/struggle_define_agility/ 7
³ Gartner Says by 2016, the Impact of Cloud and Emergence of Postmodern ERP Will Relegate Highly Customized ERP Systems to “Legacy” Status. (2014) Gartner press release. Jan. 29, 2014. ⁴ Koch, S., & Mitteregger, K. (2016). Linking customization of ERP systems to support effort: an empirical study. Enterprise Information Systems. 5,6 Forrester Research, Inc: B2B Order Management Bridges The Gap Between B2B eCommerce And ERP
As independent research and advisory firm Gartner
notes, the use of ERP systems is expected to change
significantly in the future³. The current strategy of
concentrating all processes in a single ERP system
will gradually disappear.
Legacy ERP systems tend to limit flexibility and have high
operational and support costs⁴ – which is why they are
increasingly viewed as a potential problem area. Accord-
ingly, companies are now looking for new solutions in
order to reduce their IT costs and boost their flexibility
and agility.
ERP systems will need to adapt to these changes. They
will play a key role within companies as a “system of
record,” ensuring that all mission-critical data is accurate
and consistent. However, differentiated processes will be
implemented as specialist solutions that are closely inte-
grated with the ERP system.
“[Order management systems] complement your existing
ERP platforms by directing orders between ERP instances,
adding capabilities that many ERPs lack, and providing a
consistent view of orders across all front-office systems,” ⁵
says Duncan Jones of Forrester.
According to Forrester, order management products
complement ERP systems by adding important function-
ality, such as consistent order capture across multiple
channels and business units. They allow for a reliable
insight into order status, irrespective of which channel
was used to capture the order. This provides the basis for
optimum allocation of orders to the various fulfillment
systems. The result: harmonious orchestration of the
order execution process⁶.
An order management system is the perfect comple-
ment to a typical ERP system. When the two are com-
bined, the order management system serves as the
central interface between a rapidly changing market-
place with diverse, customer-oriented applications on
the one hand and established ERP-based business pro-
cesses on the other.
The question is not whether it is better to adapt an
existing ERP system or to introduce an order manage-
ment system. In order to increase agility in day-to-day
operations without impacting your accounting and
financial processes, you have to create an effective
symbiosis of ERP and order management systems.
8
C H A P T E R 2
The evolution of order management systems
In the past, order management systems were generally
used for traditional methods of customer interaction,
often forming part of call-center applications and ERP
systems. These early order management systems offered
a basic range of functions that enabled users to create,
modify, and return orders. Deliveries were shipped from
a central warehouse, and there was no real-time informa-
tion on stock levels or order status.
By the turn of the millennium, the growing demands of
online commerce led to the creation of dedicated order
management systems. In order to cater more effectively
to individual customers, companies needed the ability
to query their own inventories in real-time and provide
order information and services to their customers like-
wise in real-time.
The next stage in development was triggered by the
ongoing growth of digital commerce and the concurrent
increase in channels. The evolution from single-channel
to multi-channel and finally omni-channel commerce
necessitated new functionality that enabled the meshing
of order processes across a diverse range of channels.
This need led to the development of distributed order
management (DOM) systems. DOM systems build on the
functionality of order management systems but are also
able to split and route orders. These orders can then be
fulfilled through multiple warehouse locations in accord-
ance with the customer’s wishes – a process called
“distributed fulfillment.” A DOM system incorporates not
only internal warehouse facilities but also any internal
or external fulfillment locations – from offline stores and
dropship suppliers to service provider locations
Stores
3PL/drop ship
Distributed Ordermanagement
ERP/supply chain
CRM/loyalty
Businessintelligence
POSmerchandising
Site search PricingCustomer service
Enterpriseinventory
Store ful�llment
Distributioncenters
Retailstores
Supply chain
Contact CenterKiosk Web Mobile Tablet
Branded digital touchpoints Traditional touchpoints
Inventory/ful�llment locations
Commerce platform
Commerce APIs
Order Management
Enterprise back-o�ce systems
PIM/ product catalog
Experience management/WCM
Personalization Merchandizing
Figure 01: OMS is the core of an Omnichannel Commerce architecture
9
Incorporating distributed locations into the order fulfillment
process requires total visibility of all available inventories at
these locations (“enterprise inventory visibility”), regardless
which channel, location, supplier, or system maintains the
inventory. As a result, the available-to-sell (ATS) and availa-
ble-to-promise (ATP) status of inventory items has become a
key criterion for the efficient distribution of orders to multiple
fulfillment locations or suppliers. The ATS and ATP calculations
used in a DOM system are more sophisticated than traditional
ERP calculations, as they also take into account allocated inven-
tories for orders that are not yet logged in the ERP system (ATS)
or in-transit inventories that have not yet been added to the
ERP system (ATP).
In the B2C sector in particular, distributed order management
systems have evolved in recent years into omni-channel or
retail order management systems. Omni-channel order man-
agement systems combine all the benefits of an OMS with
those of a DOM system but also add specific functionality for
manual shipping and order fulfillment via brick-and-mortar
stores.
B eate S chiler, SVP Business Consult ing and Professional S er vice at I ntershop, on order management and distr ibuted order management systems: “Order management is no longer the key issue – it’s all about orchestration. There is so much more to consider than simply forwarding orders to an ERP system. Nowadays, it’s important to orchestrate orders in a holistic way with regard to channels, CRM, ERP, and other customer- oriented applications. That is a crucial requirement for a successful e-commerce strategy.
There are several ways in which companies can use an OMS. For example, they can use it as a central pool for all customer orders from all available channels, e.g., call center, online store, offline store, and smart phone. All orders are captured centrally from all touchpoints, aggregated, and passed on to an ERP system. Another approach is to use a distributed order management (DOM) system to connect multiple ERP systems or instances. This option is used by companies that have multiple distribution centers using the same or different ERP systems. The DOM determines which distribution center is closest to the respective customer.
A distributed order management system can also be useful during acquisitions. If a newly acquired company is running a different ERP system, you can use a distributed order management system to sell the company’s products through your existing channels by redirecting requests to the new com-pany’s ERP system for fulfillment.”
10
C H A P T E R 3
Bridging the gap: order management systems as the key to digital transformation
For many companies, the digitization process begins
with the same question: How do we prepare our legacy
IT landscape for the challenges of digital commerce?
How can we use it to drive our digital sales, business
processes and business models to improve customer
satisfaction across all channels, and to flourish in an
increasingly competitive marketplace? The emergence
of new digital commerce and marketing models is
increasing the complexity not only of corporate struc-
tures but also of business processes and IT.
When digitally transforming and networking their oper-
ations, many companies are faced with a legacy IT land-
scape that developed organically, becoming increasingly
complex in the process. There are many reasons for this
complexity, but the most common ones are:
x Either the company has grown through mergers and
acquisitions or individual locations, departments, or
subsidiaries have a high degree of autonomy in their
IT decision-making.
x Systems have been in use for many years and, as a
result, they are no longer state of the art; upgrading is
complex and expensive.
x Systems have been heavily adapted to meet the
specific needs of individual departments and/or
business processes.
x Systems are directly connected to each other through
point-to-point integration, which creates greater
complexity and mutual dependencies (see section on
“Order management as e-commerce middleware”)7.
In many cases, these systems have been operating reli-
ably for many years and users are familiar and happy with
them. Unfortunately, though, these solutions are often
unable to keep pace with growing customer demands
and digitization of commercial processes. This creates a
series of operational obstacles that hamper growth:
x Adapting the various legacy systems leads to higher
IT costs and risks. Expansion is a complex undertaking,
and it is difficult to integrate new systems into the
existing IT landscape.
x Integrating new digital channels or new partners is
a frustrating and time-consuming process. It slows
down expansion into new markets and hinders the
development of standardized product and service
offerings across multiple locations and companies.
7 Forrester Resaerch, Inc: B2B Order Management Bridges The Gap Between B2B eCommerce And ERP 11
8 CLASH OF THE TITANS 2016. An independent Comparison of SAP, Oracle, Microsoft Dynamics and Ifor
x Companies lack the agility to respond quickly to
changing customer demands or market conditions,
to test innovative sales and business models, or to
offer new products or digital services.
x It is difficult to maintain or improve service quality
without complete visibility of customers, orders, and
inventories. This leads to dissatisfied customers and
increased costs.
Most companies have two options when consolidating
and integrating their existing IT landscapes: The first
option is to completely replace the existing systems
while they are still in use. This is analogous to replac-
ing a car’s engine while the car is being driven, all the
while jockeying for market position. Such an ambitious
approach is both time-consuming and expensive and
comes with huge operational risk. In addition, any added
value will only become apparent after the new systems
have been fully deployed8. It is also necessary to train
staff in advance and, in many cases, to overcome their
resistance to the introduction of new systems. This
all militates against the speed of action that is a key
prerequisite for successful digital transformation.
The second option is to adapt or expand the existing IT
systems. While this is an effective way of solving current
problems, it also creates problems for the future. The
higher the degree of customization and the greater the
number of integrated systems, the more complex it will
be to implement future changes. This is an issue because
one of the most important characteristics of successful
digital transformation is the ability to respond quickly
to changing customer needs and market conditions.
The agility of a company can be measured by the flexi-
bility with which its IT resources and business processes
can respond to change. Thus, a highly customized IT
landscape is not an appropriate solution, but rather an
impediment to digital transformation.
With this in mind, companies are increasingly
recognizing that they need greater flexibility in their
business processes – without radically changing their
existing IT landscape. Indeed, they are now coming to
the surprising realization that successful digital transfor-
mation requires totally new technologies and solutions.
The most pivotal solutions are those that bridge the gap
between existing IT landscapes and new digital sales,
business processes and business models.
An order management system is one such solution, as it
provides a link between established internal IT systems
and business processes on the one hand and new digi-
tal commerce models on the other. It builds on existing
IT landscapes by adding networked digital commerce
functionality – without changing or replacing the exist-
ing IT resources. This enables companies to expand their
opportunities and drive their new digital commerce
models with greater speed and significantly reduced risk.
12
C H A P T E R 4
Order management as e-commerce middleware
One of the major challenges in contemporary e-commerce is the complexity of inte-
grating multiple customer-oriented applications with diverse internal or external busi-
ness applications as well as partner systems. The reason for this is often the existence
of legacy IT landscapes, whose components are woven together through a complex
array of direct point-to-point integrations. Besides creating headaches for IT depart-
ments, such legacy environments undermine the company’s agility and performance.
Not that point-to-point integration is necessarily a bad thing.
If you only need to integrate a few applications, the point-to-
point strategy is fast, simple, and inexpensive.
The problem is that most companies have to integrate many
different applications and/or external partners – and these
integrations are rarely static.
The task of maintaining or expanding the ever-increasing
number of interfaces and integrations presents a range of
problems for IT departments. While project and maintenance
costs rise, the speed of integrating new systems and partners
or replacing existing solutions is reduced. And whenever
another point-to-point integration is needed, the IT archi-
tects and developers often end up reinventing the proverbial
wheel.
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Figure 02: Point-to-point integrations are a barrier to flexible e-commerce solutions
13
Modern e-commerce landscapes consist of a large num-
ber of systems that have to be networked with each
other. E-commerce middleware solutions play an impor-
tant role here in creating a powerful and flexible e-com-
merce architecture. These middleware systems can be
used to centralize and standardize future integrations,
thereby eliminating complex point-to-point architec-
tures. Rather than being directly connected, applications
are linked using the standardized methods defined by
the middleware.
This is where a modern and sophisticated order manage-
ment system comes in. As e-commerce middleware, it
integrates heterogeneous systems using common infor-
mation and process elements.
It embeds itself completely in a wide range of processes
and solutions, linking online stores, marketplaces, EDI
hubs, approval processes, credit checks, payment provid-
ers, marketing and reporting solutions, ERP and logistics
solutions, CRM, and offline stores to create a holistic order
processing system. A well-designed order management
system is also capable of streamlining all processes and
aiding the integration of all important data and processes
into a unified e-commerce architecture.
Marketplaces Vendors
OMS:1. Item2. Inventory3. Customer4. Order5. Payment6. Ful�llment Execution
WMS
Publish Publish
PublishPublish
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POSE-com OMS
API/EDIAPI/EDI API/EDI
Publish
Figure 03: OMS as central e-commerce middleware
14
C H A P T E R 5
Intershop Order Management: the solution for SMEs
One of the most significant results of digitization is the
fact that large global corporations and SMEs are becom-
ing increasingly indistinguishable, mostly in terms of their
order management requirements. Of course, there are
differences between these two types of companies with
regard to the complexity of the processes used through-
out each business. Yet both need a high level of agility
and flexibility plus the ability to integrate an increasing
number of sales channels in order to remain competitive.
In Europe, for example, there has long been a need for
an independent order management system from a lead-
ing e-commerce provider that is specially tailored to the
needs of SMEs.
At one extreme are the two flagship OMS solutions from
Manhattan Associates and IBM Sterling Commerce. These
powerful systems are joint market leaders, according
to Forrester Research9. They are scalable, customizable,
and ideally suited to large multinational companies with
highly complex order management scenarios. At the
other extreme are software-as-a-service (SaaS) providers,
such as Order Dynamics. While these are useful solu-
tions, the SaaS model means they cannot be customized
or expanded to meet specific business needs, i.e., they
are unsuitable for SMEs, which typically require a mix of
operational agility and long-term security.
SMEs, therefore, have the following options: Use the
Manhattan or Sterling products, spending seven-figure
sums on roll-out, but only actually needing around 40%
of the available functionality. Or opt for a more affordable
SaaS product, while also adapting their established busi-
ness processes to accommodate the fixed functionality
of the SaaS model.
“There are currently no lightweight distributed order man-
agement systems in the European market that offer the flex-
ibility of an enterprise solution but at a cost that suits SME
budgets,” says Simon Phillips of Javelin Group (Accenture).
The Intershop Order Management System has been cre-
ated to fill this gap. It can be adapted to suit individual
business needs and is available as an on-premise solution
or off-premise in the cloud at Amazon AWS or Microsoft
Azure. With its flexible and SME-centric licensing and
operational model, it also suits SME budgets. Another
important benefit of Intershop Order Management is
that it is not limited to Intershop Commerce Manage-
ment, one of the world’s leading e-commerce systems:
“What’s special about our order management system is that
it can be used independently of our commerce management
system,” says Intershop CEO Jochen Wiechen. “There are
many companies that are hampered by a lack of order man-
agement functionality in their e-commerce or ERP systems.
Our order management system provides a new alternative
for these companies.”
With the Intershop OMS, small and mid-sized enterprises
now have a solution that enables them to respond to
current and future demands from markets and custom-
ers – simply, quickly, and efficiently.
9 The Forrester Wave: Omnichannel Order Management, Q3 2016 15
With the Intershop Order Management System, you can capture and merge orders from multiple
channels and process them in a standardized way. Regardless of whether an order is received via an
online store, offline store, field sales representative, EDI connection, or B2B marketplace, you have a
complete overview at all times. You can also quickly integrate new channels and use channel-spe-
cific order processes to adapt with ease to the individual requirements of each channel. Merging all
orders from all available channels in the Intershop Order Management System gives you full insight
into buyer behavior and transaction histories across all those channels, thus enabling you to take cor-
responding management action. Your customer, meanwhile, has a cross-channel account providing
them full details of all their orders – regardless of which channels they used to place them.
1. Connected channels: the key to an integrated multi-channel strategy
As the borders between channels become increasingly
blurred, companies are connecting what were once sep-
arate channels to create a single, consistent shopping
experience. Instead of focusing on the locations where
transactions are performed, businesses are now striving
for a seamless customer experience across all available
channels. For example, a customer can research a prod-
uct online, order it on their cell phone, and pick it up
from a brick-and-mortar store, which sends them a text
when the item is ready for pick-up. After placing an order,
the customer can check the order status from a phone,
tablet, or any other Internet-enabled device and add the
pick-up date to their calendar. The key to successful
multi-channel selling is the convergence of those chan-
nels and removal of the traditional barriers between
them. This enables the vendor to focus on selling and a
holistic view of the customer – regardless of the channel
used.
The greatest potential lies in cross-channel integration
of order management processes and technologies. The
ability to view all orders across all channels and to use all
information collaboratively creates new scope for sav-
ings, synergies, and ultimately increased revenue.
Seven key features of an order management system
92% of companies surveyed have used an order management system to improve their cross-channel order capture processes; 81% have used cross-channel customer accounts to optimize their customer processes.10
How the I ntershop O rder M anagement System c an do this for you:
10 Intershop B2B Commerce Report 201616
With the Intershop Order Management System,
you can create an aggregated, comprehensive view
of all your inventories at internal and external loca-
tions. This provides customers and staff with com-
plete transparency across all channels with regard to
which stock is available at which locations. This ena-
bles you to reduce your stock levels, increase stock
turnover, optimize delivery routes, utilize stock across
all channels, and ultimately release tied-up capital
while improving your ability to meet demand. Your
customers receive a better quality of service on every
order because you are able to offer the ideal mix of
inventory location, delivery address, and delivery
preferences.
85% of companies surveyed have used an order management system to optimize their cross-channel inventory, thereby achieving long-term savings and improvements in business processes.11
How the I ntershop O rder M anagement Sytem c an do this for you:
2. Meet demand across all channels and from any warehouse location
Intelligent order management begins long before an
order is even placed. First, the vendor has to create an
inventory that matches the expected demand. It is essen-
tial that all local inventories at all locations are visible and
accessible to all relevant users. Companies that are able
to create a comprehensive inventory view, with stock at
multiple locations being available as a shared resource
across all channels, can fulfill orders from every channel
and from any warehouse location, thereby reducing stor-
age and distribution costs.
Connecting all channels with the inventories at all loca-
tions provides the basis for cross-channel order man-
agement processes and supply chains. The result is a
seamless customer experience incorporating all available
channels.
11 Intershop B2B Commerce Report 2016 17
3. One order, one customer: multiple systems and channels
For order processes to be efficient, you need a consoli-
dated view of each order. In many companies, however,
these processes are spread over a number of separate
systems. There is often a partial or complete lack of
standardization in the processes used and consolidation
of orders and data. With separate systems for the various
channels and no (properly) integrated enterprise solu-
tions in place, many companies are unable to manage
orders in an efficient and effective way throughout the
entire lifecycle.
Successful companies use a single order management
system to orchestrate all their order processes and inte-
grate them with existing processes and systems. From
order acceptance and approval through to billing, pay-
ment, and the management of shipments and returns,
an OMS ensures that all processes mesh seamlessly and
operate robustly, profitably, and harmoniously with all
other participating systems.
The typical OMS is able to seamlessly integrate the
specific business processes of the respective company,
enabling a transparent and homogenous order manage-
ment process that transcends system boundaries.
81% of companies surveyed have used an order management system to improve the efficiency of e-commerce processes. 12
Regardless of whether you sell B2B or B2C, through an online store, marketplaces, offline stores, field sales force, or EDI, the Intershop Order Manage-ment System serves as a single commerce hub where you can manage your orders in an efficient and integrated manner. The Intershop OMS orches-
trates the entire lifecycle of all your orders and provides a consolidated view of orders and data – all fully integrated with your legacy and third-party
systems, both internal and external. The results are not only shorter and smoother processes but also fewer errors – which means greater customer
satisfaction and a better bottom line.
How the I ntershop O rder M anagement System c an do this for you:
12 Intershop B2B Commerce Report 201618
e-Co
mm
erce
Place OrderOnline
Shipmentupdate
API
CommProtocols
FileFormats
XML
API, SFTP
XML, CSV,EDI
API XML
SFTP CSV
SFTP EDI
Sales OrderCaptured
OrderRouted
ShipmentUpdate
InventoryLog
Ship FromWarehouseNoti�cation
Pick / Pack /Shop
InventoryLog
Ship FromStore
Noti�cation
Pick / Pack /Shop
Send EDI
Receive EDI/ Portal
VendorDrop Ship
OM
S
SKU
1SK
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SKU
3
WM
SPO
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ore
Vend
or
Customer orders 3di�ferent SKU‘s
Hollistic Inventory snap shot through integration points with key systems
InventoryAllocationDecision
4. Automate, split, and route
Today’s customers expect to be able to buy products
whenever, wherever, and however they want. This pre-
sents vendors with an enormous challenge and increases
the complexity of order and delivery processes. Success-
ful order management strategies include order place-
ment and routing rules that allow you to coordinate your
available inventory with current demand.
A sophisticated order management system is thus able
to process each order item both as a separate entity and
as part of an overall order. The ability to individually pro-
cess each item makes it possible to optimize every order
using automated rules and thus avoid the “all-or-nothing”
conundrum for a multi-item order. Custom order routing
rules provide the best strategy for processing and ship-
ping orders in accordance with your own commercial
considerations, available inventories, and the customer’s
specific requirements.
77% of companies surveyed use an order management system to optimize their supply chain processes.13
The Intershop Order Management System allows you to optimize your order processes and process
costs through automated, cost-efficient, and transparent order fulfillment via the route selected by the cus-
tomer. You can use order routing and fulfillment rules, such as “ship complete,” “optimize by purchase price,”
“ship from one location,” “ship or do not ship from store,” and “ship from nearest location,” to forward an order
to the optimum location for both you and your customer – on an order-by-order basis. You can also define
sourcing rules that determine the preferred locations to which orders are sent or the preferred locations or
suppliers for entire product groups or manufacturers.
How the I ntershop O rder M anagement System c an do this for you:
13 Intershop B2B Commerce Report 2016
Figure 04: OMS orchestrates complex omnichannel delivery processes
19
5. Efficient payment processing through invoice-to-cash management
Digitization and the continued rise of e-commerce are
presenting new challenges for finance departments and
drive long-term changes in payment and receivables man-
agement. New online payment methods necessitate new
processes and partners. Traditional and online payment
methods must be harmonized and combined with effec-
tive risk and credit check measures to create an optimized
payment and receivables management system.
The latest order management strategies are, therefore,
embedded in efficient and transparent payment pro-
cesses. All processes from billing to payment as well as risk
and credit checks plus the logging of incoming payments
or receivables in the ERP or receivables management sys-
tem must be implemented and managed with maximum
efficiency as part of an all-inclusive order-to-cash strategy.
An order management system supports cross-system
integration of order-to-cash processes through the auto-
mation of workflows and transformation of numerous pro-
cesses within the organization.
The Intershop Order Management System enables you to efficiently coordinate your various risk assess-
ment, payment, and billing processes. Harmonized with your order management processes, you can define
custom approval and payment scenarios featuring partially or fully automated interaction with credit agencies,
payment providers, and internal or third-party systems. By creating a central hub with all payment and billing
information, you can provide your customers and staff with complete transparency across the entire payment
process. The results are a better quality of service and a reduction in costs – which ultimately leads to fewer
outstanding payments, optimized cash flows, shorter order-to-cash processes, and a better cost position.
How the I ntershop O rder M anagement System c an do this for you:
Electronicallydeposited funds
% 4+5combined
82%
0%1 2 3 4 5
not important highly important25% 50% 75% 100%
73%
61%
60%
51%
43%
39%
39%
32%
Faster payment andbetter cash�ow
Cost reduction(less e�ort chasingoutstanding payments)
Improved customerrelationships
Improved reconciliation
Receipt of payment prior to shipping
Allows sales viaonline channels
Merchant service feeis tax deductible
Opportunity to gain„preferred“ supplierstatus and/or captureadditional orders
Figure 05: Benefits of electronic payments (Source: Deloitte Payment Report 2015)
20
Payment service providers, such as Payone, Computop, and Wirecard, take care of the entire online payment
process in conjunction with the chosen payment providers, e.g., PayPal or Visa. Since the transaction costs and
available payment methods offered by the various payment service providers often vary widely, companies no
longer rely on a single provider for their national and international transactions. Rather, they assemble a strate-
gic mix of service providers or work directly with specific payment providers, such as PayPal.
With the Intershop Order Management System, you can specify which
payment service provider or payment provider to use in conjunction with
each payment method and client. For example, you can select a specific
provider for each individual country and payment method and simply
change the provider if necessary, e.g., because of rising costs – all without
major modification to your systems.
How c an I maximize revenue with multiple payment ser vice providers?
Credit card
Giropay
Direct debit secured by service provider
Payment on invoice secured by service provider
Payment via Amazon
SOFORT online direct payment
PayPal
Direct debit
Payment by consumer loan/installment payment plan
Payment on account
Cash on delivery
Pre-payment by bank transfer
We process payments internally or through the respective payment provider We process payments through a payment service provider
14% 86%
42% 58%
58% 42%
66% 34%
70% 30%
73% 27%
82% 18%
84% 16%
87% 13%
95% 5%
96% 4%
96% 4%
Figure 06: ibi research - Total costs of payment methods; payments are mainly handled by payment service providers
Do you process your payment methods internally or via the payment provider, or do you use a payment service provider (PSP)?
21
72% of customers surveyed would prefer a service portal with more self-service functions.14
6. Better customer service through order management systems
The quality of your customer service can give you an
important competitive edge in markets where price is
just one of many factors that influence the purchase
decision. Today’s customers expect a seamless shopping
experience – from the time an order is placed through
to a potential return. They want to be able to see all
the information they need, whenever they want, and in
whatever channel they choose.
Meeting those demands for each individual customer
is virtually impossible without an integrated view of all
your customers and all their orders. Companies that have
an integrated order management system can provide
customers and service staff with transparent, structured,
and multi-channel access to all information – from pur-
chase history to contact details, current order status, and
payments. These value-adding services are available to
customers at all times.
The order management system serves as
the central “control room” for a powerful and
deeply integrated service portal – a key hub
for all the core processes in your digital cus-
tomer service offering.
The Intershop Order Management System provides your company with a comprehensive overview of all
customer and order data across the entire order lifecycle. From order and delivery status through payments, bill-
ing, and outstanding payments to approvals and returns, all information and services are available to customers
across all your channels. Whichever channel a customer uses – e-mail, service portal, call center, or field sales
representative – the Intershop Order Management System enables you to personalize your customer service by
providing accurate and comprehensive order information at any location and time. In short, the Intershop Order
Management System forms the heart of your digital customer service offering. You can use it to divert routine
tasks to a digital service portal, thereby improving your margins.
How the I ntershop O rder M anagement System c an do this for you:
MO
ST IM
PORT
AN
T
Complaint
3,0
4,0
5,0
6,0
GeneralQuestion
AccountInquiry
RoutineTransaction
SensitiveTransaction /Billing
Quick Quick Human Contact Secure
Most important factors when choosing channel for each contact reason15
14 Forrester Research, Inc: The B2B Omni-Channel Commerce Platform of the Future15 CX Act 2015 Omni-Channel Customer Care Study
Figure 07: The reason for contact is an important factor when selecting the channel
22
76% of consumers view a vendor’s return policy before placing an order. 81% of consumers prefer vendors who have a simple return policy.16
7. Efficient return processes – for more profitable e-commerce
The more quickly and efficiently a company can perform all the tasks involved in pro-
cessing returns, the more satisfied the customer will be with the quality of service –
which is a crucial element in long-term customer loyalty. The most important variables
from the customer’s perspective are the simplicity of the processes in the channel of
their choice, the speed with which refunds or credits are provided in the case of returns,
and the ease with which incorrect or damaged goods are replaced or repaired. It is
therefore essential to have a cost-efficient method of processing returns throughout
your sales network, with seamless interaction between all relevant actors and systems.
There are various ways in which an order management system can be used to process
returns efficiently. For example, it is an excellent tool for linking a return to a customer
order and validating it in accordance with predefined rules or guidelines. As a central
hub, the OMS can orchestrate all processes involving the customer, the vendor, and the
vendor’s sales network.
16 MetaPack: Delivering Consumer Choice Report 2015
Intershop’s Return Order Management can optimize your return processes by managing the return of items
to company locations or even third-party providers. As an integral part of your service portal, it enables customers
to create returns online and print their own return documents and shipping labels quickly and easily. By creating
custom rules for each reason for return, you can specify which location in your sales network an item should be
returned to. An integrated RMA process ensures that you, the customer, and any relevant partner can view the sta-
tus of each return at any time. With options ranging from fully or partially automated processing of returns received
at your logistics center or offline stores, through to the provision of credits, all return order management processes
are deeply integrated, thus eliminating potential gaps between systems and media.
How the I ntershop O rder M anagement System c an do this for you:
23
C U S TO M E R C A S E S T U DY
Sybrand Brouwer is the head of INDI.nl, an online provider
of technical and industrial components, which was recently
spun off from technical wholesaler Kramp. “This meant that
two years ago we found ourselves in the luxurious position of
being able to design our platform from scratch, without the
hassle of legacy systems,” says Brouwer. “We didn’t want an
ERP system, as they are often complex and inflexible, which is
why the new platform consists of a commerce and order man-
agement system together with specialist solutions, such as a
financial core package. This set-up covers all our needs.” The
solution not only supports the extensive product catalog
and huge transaction volumes in the online store, it also
facilitates the complex orchestration of multiple orders and
smooth handling of invoice-to-cash processes. The benefits
for INDI customers include real-time querying of product
availability as well as easy access to a range of order fulfill-
ment options, self-service functions, and after-sales services.
Ful l fo cus on e - commerce INDI decided to outsource logistics, so it could focus
entirely on e-commerce. “Others excel in logistics and stock
management and we are happy to contract that expertise,”
says Brouwer. “At present, we have one fulfillment partner
connected to the OMS, but we hope to have more soon. We
have introduced a few parameters so that the OMS checks
which logistics partner fulfills the requirements in terms of
availability and price when an order is placed. Then the right
partner gets the right order and we are able to orchestrate
the whole order flow.”
No need for an ERP “The partner fulfilling the order is invisible to the customer,”
adds Brouwer. “But the client certainly profits from the effi-
ciency levels. We are in a replacement and repairs market
where speed is of the essence. If somebody orders ten prod-
ucts and one partner has five in stock while another has
twenty, then the latter partner will get the order and the cus-
tomer will receive everything they ordered in one delivery.”
INDI chose an OMS for its logistics set-up due to the
scalability and flexibility it offers – plus it supports the
company in the rapid expansion of its product range “It
creates an overview of the order flow and it’s easy to adjust
the parameters,” says Brouwer. “We can add logistics part-
ners or even manage a warehouse, should we decide to keep
certain parts in-house. When it comes to costs, this solution
is considerably cheaper than an ERP system, which are often
also lumbering and complicated systems that require a great
deal of technical know-how and customization when you
want to add functions or make adjustments. The OMS allows
you to do that in the blink of an eye. For example, we wanted
to include an option for invoicing weekly instead of per order,
and it was a piece of cake.”
24
C U S TO M E R C A S E S T U DY
Added value Peter Szabados, Global Head of Digital Manufacturing
and Logistics at Panalpina, regards the order manage-
ment system as an integral part of the new end-to-end
commerce facility that the company plans to offer its
customers. “We are an integrated forwarder and logistics
service provider that specializes in sea and air freight,” he
explains. “Competition is fierce in the logistics market, which
is why we are always seeking ways to distinguish ourselves
from the pack. One example is our Logistics Manufacturing
Service, which aims to get products closer to the end user.
Instead of the entire production cycle taking place in one
location, it is undertaken in different places and the high-
tech components are only brought together after the order
is received, so that the product never becomes outdated. Our
new e-commerce platform was put together using the same
approach. It’s an end-to-end solution where all the elements
are brought together to create a complete solution with
added value.”
The Logistics Manufacturing Service was developed on
the basis of customer demand. “We have noted that many
of our customers struggle to make the move to online selling
or to selling outside of their regions. That is both a B2B and a
B2C issue,” says Szabados. “Panalpina has a global footprint
and our complete solution allows them to utilize that inter-
national presence. We work together with a number of part-
ners in this respect, with Intershop handling the commerce
platform and the OMS. We made a deliberate choice to have
the same supplier deal with both of them, as the online shop
is our face while the OMS is our brain. Those two facets must
work together properly.”
Five c ategories Panalpina had a list of five requirements when it came
to development of the end-to-end solution. “We wanted
a SaaS set-up, suitability for both B2B and B2C, geographi-
cal scope, an integrated package, and the option to adjust
workflows.”
Szabados believes that the resulting solution, which is
currently running as a trial version with the first customer,
will appeal to five target groups: “Firstly, there are those
companies that do not yet sell online but want to do so.
Then there are those that want to get involved in new mar-
kets. Thirdly, we are targeting this solution on organizations
that wish to optimize their existing set-up, maybe by coordi-
nating existing sales channels. Next up are the new compa-
nies that started out offering their products in marketplaces,
such as Amazon, but that have now
grown to an extent where they want
to manage their own brand. The
fifth category covers companies that
want to outsource their e-commerce
infrastructure and ecosystem.”
“The great thing is that we adopt a
modular approach, which means
we offer the benefit of an integrated
package but you can still select a few
elements,” Szabados adds. “Should
a customer already have an ERP
system, then we’ll link the OMS to
it. Of course, the OMS can also run
without an ERP system, allowing us
to give the customer exactly what
they want.”
25
C U S TO M E R C A S E S T U DY
M ak ing the connec tion Zamro is among the companies that have opted to use
the OMS as a link between commerce platform and ERP
system, says Thomas Bloemarts, the company’s logistics
manager: “Zamro is an online shop that sells tools and spare
parts and primarily targets SMEs that have technical require-
ments. At present, we already have a commerce platform,
an OMS, and an accounting package. We are now busy
additionaly selecting an ERP system.”
D ropship suppliers Zamro launched in February 2016 as a subsidiary of the
ERIKS group, an industrial service provider. The online
shop went live in the Netherlands in October of the same
year, followed by Belgium and Germany. “We started off
selling ERIKS products, which allowed us to build on their
logistics system, making our set-up relatively simple with the
online shop, OMS, and financial package,” explains Bloe-
marts “But we now want to extend our range, which means
we must link more suppliers to the system and support vari-
ous capabilities and operational models. We will keep stock
ourselves and use dropship suppliers, and we’ll need an ERP
system for our purchasing and financial administration.”
N imble and f lexible The OMS is the linchpin in the new set-up, according to
Bloemarts: “The system checks stock availability and sees
to the order routing as well as all customer communica-
tions, such as order confirmation and order status. It’s the
back-end system for order administration, which is where
Customer Services goes whenever there are order queries.
The OMS allows us a high degree of flexibility when it comes
to linking suppliers and extending the functions. Because it’s
independent of the front-end, we can develop the OMS in
parallel. For example, we are presently working on refining
and optimizing the business rules. It was also a strategic
decision to not have everything run through the ERP system
because that would have meant we were dependent on a
single supplier. Moreover, ERP systems are generally not so
nimble. The OMS allows us to be flexible.” Another advan-
tage is that the system can easily be replicated for other
countries: “Different countries have different tax rates, dif-
ferent e-mail formats, or different billing formalities,” adds
Bloemarts. “With the OMS, we can easily adapt to each indi-
vidual country.”
26
27
Intershop Communications AG Intershop Tower
07740 Jena, Germany
Phone: +49 3641 50–0
Fax: +49 3641 50–1111
www.intershop.com
© 2017 Intershop™ Communications AG. All rights reserved.
All other trademarks are the property of their respective owners.
L E T U S B E YO U R G U I D E
Intershop is one of the world’s leading mid-market and
enterprise ecommerce solutions. Using a single platform,
the suite allows companies to showcase their brands, mar-
ket products worldwide, and implement strategies that
will grow their business – all under a single pane of glass.
The Intershop Commerce Suite encompasses:
Omni-Channel Management, Experience Manage-
ment, Product Information, Customer Management,
Transaction Management, Organization Management,
Analytics & Reporting, and Operational Excellence.
To learn more about Intershop, its platform and services,
or to schedule a time when you can learn more about
the Intershop advantage, email [email protected] or
call +49 3641 50 2062. Companies that qualify can take
advantage of an on-site workshop where Intershop will
work with your business and IT executives to understand
how an Intershop implementation can help your organi-
zation scale to new heights.