B2B Order Management Challenges are Growing, Your Business Needs a Modern OMS
With the exponential rise of B2B commerce, there has been a substantial change in how businesses manage their sales and B2B order fulfillment operations.
Today’s B2B customers expect high-quality, simple, and fast ordering capabilities that echo their B2C experiences. To meet these expectations, B2B companies must place a higher emphasis on inventory visibility, speed, and their capacity to meet order deadlines. They must process more orders, faster, in a complex environment where eCommerce is on the rise.
However, while B2C organizations have been modernizing their systems to keep pace with consumer expectations and the dynamic requirements of omni-channel ordering and fulfillment, B2B organizations have been much slower to evolve in those areas. The majority of the B2B world has continued to rely on Enterprise Resource Planning (ERP) systems or legacy homegrown systems for order orchestration.
This adds cost and inefficiency, slowing production, delivery, and service at a time when speed is critical. It also creates gaps that result in underdelivering to customers, which endangers customer loyalty.
As the lines between B2B and B2C commerce blur, B2B organizations must catch up with B2C organizations in their order management and order fulfillment capabilities to thrive in 2023.
We’ll explore how companies can close the gap in this post.
Why is B2B Order Management So Challenging?
Many B2B companies use multiple systems for order capturing and processing. They must satisfy complex customer relationships, manage multi-enterprise supply chains, optimize intricate product and service configurations, and fulfill multiple extensive product catalogs.
Furthermore, B2B purchases typically involve a number of considerations that make it challenging to deliver a great experience consistently, including:
- complex purchasing processes
- contracts with specific pricing and payment terms
- configurable and segmented product assortments
- sales force involvement and commissions
- approval processes specific to a customer or segment of customers
In addition, some product categories, such as automotive products, batteries, perfume, and pharmaceuticals, have regulatory or shipping restrictions and different sales models.
B2B companies also use one or more B2B sales channels, including a direct sales force, distributors, dealers, franchises, and independent sales agencies.
With all these factors in mind, delivering a satisfactory B2B e-commerce experience isn’t just about an elegant user interface or the online user experience. It must be supported by a well-orchestrated array of technologies and processes – from content and customer relationship management to order management and fulfillment. It requires a number of key capabilities, from personalization to inventory visibility, to seamless, end-to-end fulfillment and returns processes.
The Top Order Management Challenges and How a Modern Order Management System Can Help
Here are a few of the most common order management issues that we have heard from our clients and how a cutting-edge order management system can help you resolve them:
1. Overcoming Slow and Inaccurate Order Processing from legacy ERPs
B2B commerce is rapidly evolving as customers seek increased accuracy, availability, and dependability. Businesses need to adapt to market changes to avoid losing customers, failing to attract new ones, and falling behind the competition. In response, B2B businesses are working harder than ever to manage inventories better, deal with order velocity, fulfill contracts, and deliver orders on time and in full (OTIF).
B2B organizations have traditionally used ERP systems. These systems utilize a central database that compiles inputs from several departments, including accounting, manufacturing, supply chain, sales, marketing, and human resources, to automate company activities and provide actionable order management analytics and insights to improve internal controls.
However, most ERP systems aren’t designed to support complex order management and fulfillment processes across multiple channels, sales, and fulfillment models. Siloed data sources, disparate ERP systems, and fragmented procedures across business divisions and partners can lead to redundant inventory (and related capital expenses), increased shipping costs, and expensive backorders.
B2B companies require capabilities that are not always found in a traditional ERP. They need functionality to better handle growing order management and fulfillment complexity with unique business rules, such as:
- Individualized customer pricing
- Order and customer prioritization
- Stock ceilings to avoid low inventories
They must maintain accurate and well-organized inventory data to guarantee that customers receive orders quickly and that orders are accurate. Outdated, manual processes slow down order processing and fulfillment and increase the likelihood of errors.
The majority of B2B order management systems – whether homegrown systems or ERP systems –were not designed to handle complicated orders with hundreds of lines and customized purchase orders, work orders, and bills of materials. Furthermore, even the best order management systems can become overloaded with contingent rules and limits, refunds, and price regulations. This leads to slow and inaccurate order processing and frustrations for B2B customers and organizations.
2. The OMS Solution:
B2B organizations need to look beyond their ERP systems when it comes to order orchestration and fulfillment if they want to provide B2B clients with the rapid and user-friendly experiences available in the B2C world.
By investing in a B2B order management system, B2B organizations can transition to a cutting-edge, digitally-integrated system that allows for more automation, better resource and inventory utilization, fewer errors, and faster operations—all of which will benefit both the manufacturer and the customer.
Manufacturers need an OMS solution that can help them:
- Gain real-time insight into their inventory
- Get higher “perfect order” fulfillment rates
- Develop and execute automated processes for orders
- Reduce excess inventory across the supply chain
- Experience fewer stock-outs
- Increase responsiveness to market and customer changes
- Increased customer satisfaction and loyalty
Furthermore, distributors can leverage intelligent order management systems to prioritize customers based on their contractual obligations, enabling them to serve the most important clients first while avoiding fines.
3. Delivering a B2C-like experience for B2B Customers
There is a growing realization that competing based only on superior goods or services is no longer sufficient. The speed of technological advancement has lowered or almost eliminated entry barriers in many businesses. As a result, all companies, whether B2B, B2C, or B2B2C, emphasize the importance of the customer experience as a key differentiator.
B2B buyers want convenience coupled with detailed product information, accurate pricing and shipping details, and real-time inventory updates—among other features. B2B companies must meet or exceed these expectations, even though it’s a complicated process considering the volume and variety of items they sell.
When B2B customers place an order with a company, they want and expect a frictionless experience. If the company can’t provide real-time inventory availability details, they risk accepting an order they can’t satisfy. If they can’t fulfill the order, they lose valuable time and money trying to resolve the situation – and ultimately lose a sale.
This all leads to a negative customer experience, which hurts your brand’s reputation. Even worse, the customer may switch to a competitor for future orders.
The IBM Sterling OMS Solution:
The IBM Sterling Order Management System enables companies to establish frictionless, automated processes for orders and provide customers with real-time insight into their inventory, wherever it may be. It helps ensure perfect orders, fast fulfillment, and excellent customer experiences. Orders can be tracked from request through fulfillment and throughout the entire order lifecycle. IBM OMS allows users to get real-time visibility into every order across all channels.
It also enables a company’s business users to better control orders, execute inventory and sourcing choices, manage shipment nodes, and much more, thanks to user-friendly tools. When necessary, they can quickly reserve inventory, redirect orders, and add or move stores, all of which help to make sure that there is always the appropriate amount of stock on hand to fulfill demand.
These features enable your business to develop and sustain brand loyalty and meet and exceed customer expectations for accurate, on-time delivery.
4. Handling a High Volume of Complex Orders
A single B2B order may have 30 to 300 lines (or more) of products and services and frequently has intricate configurations with many interdependent components. A separate purchase order, production order, or work order may be needed to complete each line. These orders may have a lengthy bill of materials and actions that must be completed, as well as coordination with a third party to produce the product or install the item at the customer’s location.
Complicated corporate policies might also provide additional guidelines and limitations for the fulfillment, allocation, back ordering, and substituting of items. It can be extremely difficult for distributors and wholesalers to handle post-sale service orders like refunds, exchanges, and emergency purchases, especially if they are in charge of after-market replacement parts. In order to respond to their customers’ needs swiftly, they must collaborate with several vendors and sort through numerous product lines and thousands of parts.
Relying on a traditional ERP system without the right B2B order management solution in place makes it difficult to guarantee that your clients will have a seamless, predictable, error-free ordering experience every time. This is due to the intricate nature of B2B orders, fulfillment processes, and pricing rules. Furthermore, this complexity can foster a culture of manual overrides, reprioritized urgent orders, numerous backorders, cancellations, and dissatisfied customers. All of this can prove very costly.
The IBM Sterling OMS Solution:
There is an abundance of capabilities for B2B organizations to simplify and streamline their order management process. IBM Sterling Order Management software can execute a high volume of complicated orders flawlessly, including the support of:
- Multiple fulfillment options
- Complex product and service combinations
- Various production schedules
- Multiple sourcing options and rules
- Real-time inventory availability across multiple organizations to provide precise delivery predictions
IBM OMS provides real-time access for business users to input, edit, track, cancel, and monitor the complete order life cycle. Through greater visibility and control of inventory, IBM OMS enables users to act fast where necessary and fix errors before they have an effect on customers. It enables companies to maximize inventory usage by enabling precise, real-time visibility of inventory levels across the company, from inbound to returns.
Organizations can save time and free up resources to focus on driving customer loyalty and addressing more strategic challenges.
IBM Sterling Order Management System for B2B Organizations
IBM Sterling Order Management is a multi-enterprise order management system that enhances the customer experience, boosts revenue, and improves operational margin for businesses wanting to drive B2B e-commerce growth and profitability in a highly complicated market.
With the IBM OMS solution, companies can cost-effectively manage B2B orders and complex product and service considerations while consistently delivering the perfect order, simplify complex B2B inventory actions through unified multi-enterprise inventory visibility, and reduce manual effort and expensive errors by digitizing processes and automating workflows. B2B companies that leverage IBM Sterling Order Management can:
- Fill critical gaps in ERP and commerce solutions by offering sophisticated, multi-enterprise B2B order management capabilities.
- Nimbly adapt their order management system to their corporate plan rather than the other way around.
- Minimize TCO (total cost of ownership) via resource-light transformation, accelerated development, and always-on commerce.
Get Order Management System Assistance from Eliassen Group Professional Services
Our team provides comprehensive Sterling OMS consulting services, from the early stages of omnichannel strategy development to OMS Cloud and Managed Services. Based on years of experience assisting many leading B2C and B2B companies with OMS solution acquisition, implementation, management, and support, we have developed best practices and cutting-edge solutions that get your OMS solution up and running quickly while lowering your ongoing management expenses.
Check out this white paper from IBM to learn about the growing challenges companies face in the convergence of B2B and B2C requirements, and the steps they should be taking to overcome them.
If you have an order management initiative planned or underway, please reach out to us. Our expert team is happy to help.
Written by Eliassen Group
Eliassen Group is a leading strategic consulting company that provides business, clinical, and IT services for our clients as they seek to transform and execute strategies that will drive exceptional outcomes. Leveraging over 30 years of success, we focus on three main areas: technology solutions, clinical solutions, and financial, risk & compliance, and advisory solutions. Eliassen Group prides itself on its purpose to positively impact the lives of our employees, clients, consultants, and the communities in which we operate.