Order Management Systems and Microservices
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Order Management Systems and Microservices
Order management is at the center point of marketing, logistics, and information technology, and is a function of coordinated supply chain management. Marketing strategies pressure supply chain logistics to help keep old customers and attract new ones in addition to satisfying them. If these customers have rapidly elevated their service expectations because they are empowered and connected by mobile devices, the logistics processes in order management become very complex. To keep pace with this cycle of growing expectations, the simultaneous demand for investments in and innovations of order management systems (OMS) increases multifold. Therefore, a comprehensive OMS that is capable of bridging this gap between the supply chain, marketing strategies, and the customer experience in the digital economy is essential for the success of businesses in the future.
Order management refers to the process of receiving, tracking, and fulfilling an order and shipping the products to a customer/business/intermediary. Though it is easy to define, its different complexities during its implementation can be overwhelming. Simply put, the whole process begins and ends with the customer experience. Customers want to know the reasons what goes wrong during order processing, they want a response regarding availability if a product is lost/unavailable/out of stock, and also expect a level of service matching their expectations.
Managing the order life cycle requires time, resources, systems, software, and other processes. The optimum level of order management is achieved when there is value added to both the business and the customer and ensuring that the ordered goods/services arrive on time as ordered.
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The life cycle of an order happens in different environments and under different conditions — digital e-commerce applications, warehouses, third-party drop-ship facilities, shipping companies, and delivery intermediaries. The retail industry supply chain best represents the order management cycle and forms a core process in the supply chain operations of most industries, including technology, healthcare, finance, entertainment, and manufacturing.
Order Management Life Cycle
The individual processes in an OMS can be listed thus:
- Order placement, data entry
- Payment processing
- Order fulfilment
- Picking & packing
- Inventory, warehouse management
- Customer order tracking
- Shipping & delivery
- Carrier control
- Returns & refunds
Business functions and people involved
The OMS process flow requires various business functions and people working together such as:
- Sales & Marketing: To attract, improve, retain, and expand customer orders.
- CRM: Maintain a record of the sales and marketing processes which includes customer & vendor data and related functions and systems.
- Accounting & back office operations: Involves accounts receivable/accounts payable processes along with purchase history, purchase, change, work orders, payments, order invoicing, receipts, and ledger operations.
- Logistics & warehouse management: This includes the order fulfilment process, involving inventory management, shipping, and delivery to the customer/intermediary.
- IT & system operations: This involves the management of electronic systems, software, hardware, and databases related to customer orders.
Order Management today – the paradigm shift
To compete and evolve with new supply chain complexities and changing market systems, a paradigm shift is required for order management based on faster, more accurate, and more responsive digital order data exchange. The following four actions are important for this to happen.
Capturing an order and entering it into the computer system should happen just once, without manual steps for reentering data. This should happen very close to the source.
Automating routine order processing helps to spot problems and provide real-time information. This frees up your CSRs/account management teams to manage essential business services related to inventory shortages, delayed delivery, or customer change requests.
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Vendors, suppliers, or customers should not contact your people to view the order. In case of problems like inventory shortage, your OMS has to alert the appropriate CSR for the resolution of the problem, without being prompted by the customer.
An integrated OMS package for accurate order management and which provides real-time status on products and orders is recommended. The systems that manage customer-facing content, data, and pricing have to automatically flow along with the applications as a single source of information.
A fully integrated OMS may incorporate some or all of the following functions:
- Sales and marketing (customer relationship management)
- Vendor management (supplier purchasing)
- Customer database (analytics and business intelligence)
- Inventory management (location, quantity)
- Accounting (payment processing and invoicing)
- Order fulfillment (picking, packing, and shipping)
- Content management (Catalog management and product information, promotion, pricing)
Order management software is usually purchased by businesses such as retail, wholesale distribution, banking and financial services, healthcare, hospitality and food service, manufacturing and automotive, transportation, and telecommunication, among others.
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OMS and their Organization
Reducing errors, eliminating manual customer service, and having access to specific business intelligence by using an integrated system replace the requirement for multiple standalone applications. By using an integrated OMS and modern digital communication, customers stay connected to their orders at all times. Failure to deliver the order on time is a surefire way to lose customers. A failure to communicate each stage of the order fulfillment process to the customer may have the same outcome.
Microservices and Order Fulfillment
Fortunately, microservices are a type of application and system architecture designed to carry out the order management process in a successful manner.
Order Management Microservices
Individual services that are involved multiple business channels during the order management process form the backbone of large-scale ERPs and CRMs. Some business services that are easy to automate such as customer logins, payment processing, customer notifications, and inventory search engines are, therefore, good candidates for microservices architecture. Microservices refer to applications designed around independent business capabilities but built to serve as independent and end-to-end platforms.
- A sales rep/CSR/customer creating an order event on a mobile device/back office sales order system/B2B web portal. With a microservices system, this event kicks off a series of OM services eliminating manual data entry and document management. This gets rid of cost redundancy and paperwork and increases the accuracy of the order processing activity.
- The first business service event is storing and saving order data in the database. This database containing vendor and customer records acts as the CRM. Stored data is used in the internal general ledger activity that concerns customer terms, account history, billing, payment processing, discounts and promotional codes, and back ledger data.
- Microservices architecture model provides visibility for the entire OM lifecycle starting from initial order to internal fulfillment actions such as stock reorders, invoicing, inventory caching and counts, and payment. At this stage, all business services communications to manage, allocate, pick, package, and ship orders are automated across all inventory classes/available SKU assets.
- The documentation for billing, the carriers, and scheduling is stored as a delivery event. A carrier event is processed by the OMS to control shipping status and to create updates for the customer and all the involved departments. This service also monitors real-time delivery status for omnichannel business supply chains that involve more than one brick-and-mortar inventory, warehouses, and involved regions. In case of a delay due to bad weather/a change in carrier/changes in freight classifications, then the OMS communicates the latest updated billing/payment events.
- A service event also creates automated customer service notifications that confirm the order event, email communications, and order tracking. Once the delivery is complete, customer service notifications follow up on help requests/follow-up services, such as returns, refunds, exchanges, and tracking customer rewards points.
- The microservices system creates a series of actions which starts with the order event and measures and analyzes internal analytics related to the business processes, performance data, digital advertising data, CRM metrics and sales trends.
Is it wise to use monolithic systems for modern OMS
Retailers have realized that by using monolithic systems, they do not have good visibility of store inventory, availability, and general movement across the supply chain when an e-commerce and omnichannel order placing is done. This is because of the very nature of the monolithic infrastructure. Monolithic infrastructure designs are rigid and have to be redesigned even when the smallest changes were brought into effect. Time, money, and resources have been at a premium when organizations had to rethink monolithic systems.
Therefore, during the era of quick transformations and daily technology advancements together with changing customer expectations, a different approach such as microservices is required.
The architecture of microservices is such that it can be designed to revive the old as well as simultaneously usher in new developments.
Do you want to overcome business bottlenecks by implementing microservices? Talk to us today!
How Sayone can assist in Microservices development
At SayOne, we offer independent and stable services that have separate development aspects as well as maintenance advantages. We build microservices specially suited for individuals' businesses in different industry verticals. In the longer term, this would allow your organization/business to enjoy a sizeable increase in both growth and efficiency. We create microservices as APIs with security and the application built in. We provide SDKs that allow for the automatic creation of microservices.
Our comprehensive services in microservices development for start-ups, SMBs, and enterprises start with extensive microservices feasibility analysis to provide our clients with the best services. We use powerful frameworks for our custom-built microservices for the different organizations. Our APIs are designed to enable fast iteration, easy deployment, and significantly less time to market. In short, our microservices are dexterous and resilient and deliver the security and reliability required for the different functions.
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