“If it ain’t broke, why fix it?”
Many retailers may not realize that an outdated (and sometimes inaccurate) system might be stealing from their profit margin. Issues of scale are usually paramount. Old and bloated systems require constant patches or upgrades to function as businesses grow and diversify their channels.
Legacy systems can also cause unnecessary headaches by limiting retailers’ ability to innovate with new omnichannel shopping experiences. Developing and deploying new applications with a monolithic system can become increasingly difficult.
As customers’ expectations rise and competition intensifies, retailers need an order management system (OMS) that offers them the flexibility they need to integrate with other systems.
They also need best-of-breed applications to go to market faster with unique use cases that’ll set them apart from other retailers.
With that in mind, here’s what we’ll cover:
- How Does an Outdated Retail Order Management System Waste Valuable Time and Money?
- How To Know Your Retail Order Management System Is Outdated
- How To Choose a Retail Order Management System That’s Right for Your Business
- Final Thoughts: When To Change an Outdated Retail Order Management System
How Does an Outdated Retail Order Management System Waste Valuable Time and Money?
An OMS becomes irrelevant when it can’t scale into an omnichannel management and fulfillment system that supports long-term growth.
Customers expect order fulfillment to be efficient and cost-effective. An inefficient system sucks employee time and fails to satisfy and delight current and future customers.
Here are more ways an outdated OMS wastes your time and money:
It Can’t Track Data Across Omnichannel Platforms
Customer satisfaction needs have evolved. Instant gratification is the name of the game. Consumers also want various multichannel options, such as shop online, in-store, and buy online/pick up in-store (BOPIS).
Once a customer hits the buy button, time and transparency are crucial.
When will my order be delivered? How fast will it be shipped?
Those are burning questions customers want answers to. But legacy systems can't access inventory information and order status across all channels, causing uncertainty in your consumers.
For example, if a customer places an order online for different products, an outdated OMS won't be able to determine the fastest way to get the order in the consumer's hands. As a result, you'll end up with unhappy customers since you'll have to cancel most orders if they come from multiple channels.
It Causes Slow Delivery
An outdated OMS causes warehouse processes such as picking and packing to be done longer and with much more difficulty on your part. That means you'll fall behind on customer orders, which can cost your ecommerce business big time.
McKinsey & Company shares that more than 90% of online shoppers in the United States expect two- to three-day shipping, and 30% expect same-day delivery. So, slower deliveries will translate to poor customer experience.
With so much at stake, it’s time to leave your traditional OMS and upgrade to an OMS that’ll help you push out orders faster.
It Increases the Chances of Human Error
When using an outdated OMS, you increase the number of touches on each item. The more touches required to complete a process, the more chances there are for human error. In fact, human error causes 83% of supply chain disruptions.
A legacy system also can't perform warehouse optimization and multichannel inventory management. It won’t track items efficiently as they move through the warehouse and ensure the correct product is chosen for each process.
It also causes slow and mixed communication about which inventory to pick and pack to multiple warehouses. As a result, warehouse staff might record incorrect information, increasing the chances of making a mistake on orders.
Such problems will eventually lead to lost customers.
It Can’t Grow Alongside Your Company
An outdated OMS can't grow alongside you in an environment that’s yours since it has reached its limits of capability. As a result, you can't complement your ERP system and add more robust features and functionalities to improve existing workflows from order placement to delivery.
You'll also be limited if you want to expand your omnichannel fulfillment and start fulfilling and shipping inventory from anywhere. An increase in omnichannel fulfillment needs will overwhelm the system, and it won't be able to keep up with your business and scale as it grows.
How To Know if Your Retail Order Management System Is Outdated
There are many ways to know if your OMS is outdated. One method involves an audit of internal processes, even when management has a firm idea of where the inefficiencies lie.
You must be honest about the pain points — internally and with customers. That means asking employees involved in sales, channel management, inventory, customer service, and product fulfillment. Which activities take up the most time and keep your staff from reaching aggressive sales goals?
To evaluate customer pain points, go to the source. Reviews and customer complaints are a great place to start. Today’s customers are vocal and opinionated. They’ll let retailers know how they’ve failed to meet their expectations.
Gather this data from online reviews, social media comments, and store associates' feedback to get an idea of what customers are happy with and where your brand fell short.
Once you’ve completed your audit, combine pain points from key employees and customers. Also, analyze your results for trends and indicators that your order management system may be falling short, process-wise.
After finishing the entire audit process, you may see some of the common signs below that show your order management system is at fault and needs an upgrade:
You Can't Track Inventory Levels on Different Channels
The beauty of current business trends is that you can reach customers through various channels and touchpoints.
Customers can self-serve through your online store, buy items via point of sale (POS) software in your physical store, or combine offline and online activity with delivery options such as BOPIS.
However, an outdated OMS doesn't allow you to manage inventory across the multiple channels you sell through.
So, you can't update inventory levels across all sales channels, determine which SKUs perform best in each channel, and restock accordingly. You also can't view best-selling products by channel or region.
As a result, keeping track of the velocity, volume, and fulfillment of omnichannel orders will bottleneck your business.
The Order Management Software Doesn't Have a Forecast Inventory
An OMS without forecast inventory leads to over-stocking and stockouts. Overstocking means you'll have a lot of unsold inventory and money tied up in terms of the storage fees you’re paying to keep it.
Stockouts mean you won't have enough inventory to fulfill demand. As a result, you’ll have to turn customers away and try to persuade them to come back when you replenish your stock.
With these two issues, you won't know how much stock individual warehouses will need. You'll either always have too much or too little.
The OMS Doesn’t Have Seamless Integration With Other Systems
Your order management software is outdated if it can't communicate directly with other business tools, which adds inefficiencies to your fulfillment operation. Every update becomes a nightmare as breaking changes will happen and cause the business to stop.
Also, it may not be able to integrate with crucial elements such as barcode scanning, POS systems, ERPs, CRMs and PIMs, or ecommerce platforms.
As a result, you're forced to look for workarounds to channel the information to other systems, which leaves room for errors.
It Doesn't Support International Sales
Global ecommerce sales are projected to exceed $5 trillion in 2022. And with an outdated order management system, you can’t ramp up your international presence and tap into these sales.
As a result, you can't take payments for international orders in different currencies, route orders to the warehouse closest to the end customer, or automatically send order details to third-party logistics (3PL) partners in each country.
The OMS Provider Doesn't Introduce New Features
Your order management solution provider may roll out new features slowly — or not at all.
You may also have requested new features, but the provider ignores or tells you to wait for 6–12 months. That means, regardless of how important the features are to you, they may not be as crucial to the provider.
That's a strong indicator the software won't grow with your business since the provider isn't growing either.
You Can’t Manage Customer Information Effectively
An outdated OMS won’t give you access to all information on a customer, including lifetime value, previous customer orders, and location. As a result, you can’t pull data to create customer segments such as:
- Customers with a high average order value
- Clients located in the U.S. or Europe
- People who’ve purchased one item and not yet returned
Consequently, you can't hyper-personalize marketing messages to customers when trying to secure more sales.
It Doesn’t Have a Responsive Website or App
Your OMS is outdated if it doesn't have a responsive website or an app that empowers your staff to check inventory levels in real-time. A user-friendly interface is usually underestimated. Done adequately, it brings gains in productivity and staff satisfaction.
Furthermore, an outdated OMS won’t inform customers when to expect inventory and notify them when it arrives. It also doesn’t let them source inventory through varying channels where the product may be available.
How To Choose a Retail Order Management System That’s Right for Your Business
Order management systems can do much more than just manage online orders. They can also streamline order fulfillment, inventory management, and customer notifications.
But you can’t always be sure that the same OMS will help with the other processes since every business has different requirements.
When deciding, there are many factors to consider regarding the existing platforms the OMS integrates with and the workflows it can automate.
While a leading omnichannel order management system provides robust technology and functionality, the ultimate goal is to please customers. And customers are simple — they want it all. They want to buy anywhere and fulfill their purchase anywhere.
Also, in a choice-heavy consumer-driven market, consumers seek a positive and frictionless retail experience — in-store, online, or anywhere in-between. To succeed, retail stores must transform into digital-first companies that respond to customer expectations at lightning speed.
With that in mind, here’s a quick guide for choosing the right omnichannel order management system for your business:
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Determine Your Business Goals and Priorities
Before purchasing an order management system, figure out your priorities and understand what you need the system for. Maybe you want your warehouse staff to pick and pack orders faster. Or you need to track your inventory at multiple warehouses more accurately.
Discuss with your team and pinpoint the current issues you're facing to know which features are necessary and which are optional. As a result, you'll be able to understand what kind of order management process you need.
Here are some questions you can ask yourself to help you choose the best order management system:
- What functions do I want the OMS to perform?
- Can I integrate the OMS with the other systems I use?
- Is the OMS flexible and scalable?
- Is the order management system user-friendly?
- Is the software easy to install, or do I need IT assistance?
- Can I access the system from my mobile device?
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Send a Request for Proposal (RFP) to Various OMS Providers
A request for proposal is the first document you create before choosing which OMS provider you want to work with. When you send a well-composed RFP to a vendor, they're more likely to respond appropriately. Interested providers capable of meeting your needs will respond with a detailed proposal.
You can include details of how you expect the OMS to function so the provider can custom-make the proposal for your business.
Before making a final decision, analyze all the RFPs and any questions raised during the process. It's sometimes easier to use evaluation scores, especially when several similar proposals make decision-making more challenging.
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Go Over Your Options and Choose the One That Suits Your Business
After receiving the proposals from various OMS providers, make a list of four or five potential vendors and contact each supplier to set up a demo or trial of their product.
Use the checklist below to ensure you’re choosing a suitable OMS:
- Does the order management system have easy-to-adjust order routing rules?
- Does it have an in-store application for in-store sales associates?
- Do all the OMS features work reliably and as intended?
- How flexible and easy to integrate is the OMS platform?
- Is the order management software easy to use?
- Can it scale with your company?
- Does the OMS have extended order fulfillment capabilities?
Final Thoughts: When To Change an Outdated Retail Order Management System
Now that you know how to identify if your order management system is outdated, it’s time to take the next step by looking inward.
Schedule a meeting with key staff members in your company to talk about pain points and how your OMS measures up to the challenges and opportunities posed by your customers.
You’ll be able to confidently evaluate what your business needs to be a forward-thinking retailer today and remain one tomorrow.
Contact our experts if you want to build unique omnichannel retail experiences. Learn more about Orckestra's API-first omnichannel order management and fulfillment solution.
