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IBM Smarter Commerce, Sterling OMS, and the Omni-Channel

By . 27 May 2014 . in Uncategorized

Last week at the IBM Smarter Commerce Convention, leading omni-channel experts and practitioners like Carter’s, Home Depot, and Men’s Wearhouse shared what worked, challenges, and lessons learned implementing omni-channel strategies.  They provided key insights for buy online/pick up in store (BOPIS), buy online/ship from store (BOSS), and reserve online/pick up in store (ROBIS).  While the right technology features and functions required to enable omni-channel processes remain important, the common thread shared by experts is organizational alignment between IT and Operations where siloes have historically existed.  In the paragraph below, I took some time based on my experience working with retailers like Best Buy, The Home Depot, and The Men’s Warehouse to “net out” the top best practices and challenges.

Leading Best Practices:

  • Begin with building foundational capabilities. Do no rush to the end!
  • Resolve inter-channel conflicts and gain alignment top to bottom and across functions.
  • Adopt a “release strategy” for body of work and for each release define a “minimum viable product”.
  • Understand role of new omni-channel systems vis-à-vis ERP and other core systems

Review the top 20 Omni-channel supply chain best practices here

First and foremost, every organization considerably further along in their omni-channel journey strongly suggested to begin with building foundational capabilities before complex – and avoid rushing towards the end. The foundation for Omni-channel transformation is laid by building teams, putting systems plumbing, and achieving organizational alignment. One of the presentation puts the roadmap nicely, start with a Foundation, to put in place core capabilities, then move to Harvest where cross channel capabilities are optimized, and finally Innovate to gain leadership position in the marketplace.

As part of organizational alignment, resolve any inter-channel conflicts such as in-store return for an online sale early on before the actual change. The cost structures that businesses are operating under have not changed, they worked till now because channels operated independently. For omni-channel transformation, you need all departments working together towards one goal, hence the departmental Scorecards, KPIs, and metrics should be designed so that your employees can “walk-the-walk”.

Work on order alignment especially for stores for whom an order should be on order regardless of where it originated and how it will be fulfilled. This is valuable especially for big box retailers who already provide “will call”, “home delivery”, “store transfer” type services to the customers. Omni-channel only increases the number to include in-store pickup, ship from store, reserve etc. Standardization will help in not only with store being more efficient in their work but also enablement of additional services will become easier using the same standard framework.

Adopt a “release strategy” for changes and for each release define a “minimum viable product”. Release strategy hold together process, functional and system changes and maintain pace across the different work streams. A “minimum viable product” defines the scope of changes that IT teams can deliver for a release from a systems standpoint that would support a business capability such as Buy Online Pickup in Store.

Spend time with cross functional teams to understand role of new omni-channel systems vis-à-vis ERP and other legacy systems, and decide system of records for key business objects and transactions. New breed of systems such as Distributed Order Management (DOMS) take on huge set of responsibilities in a cross channel organization and all teams ranging from ecommerce, supply chain, finance, stores, customer service should be on-board with the change in systems authority.

Omni-channel transformations are still in the early phases of adoption from an industry standpoint and hence there are more questions than answers. Help business decide what they want by providing a sandbox environment early in the process to visualize the new processes, try a few “what-ifs”, and finally settle on what they foresee working best of the business. Include a “Proof of concept” in your project plan and use it as a gate check before progressing into subsequent phases of the project.

To learn more about how SCA helps leading multi-channel retailers gain competitive advantage implementing omni channel strategies using Sterling OMS and other leading supply chain technologies, check out the links below.

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