The Forrester Wave™: Order Management Systems, Q2 2023

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Enhance Profitability in 2024

A CFO's Guide to Optimized Inventory and Order Management

A flexible modern OMSs that can help reduce stock levels, improve inventory turnover, and ultimately increase margins.

By Rob Shaw

Feb 22, 2024

2023 was a challenging year. A year of uncertainty, political effects and the lingering impacts of a global pandemic on supply chains. This left many retailers and D2C brands grappling with excess stock and fluctuating demand.

1. Don’t lose profits on your inventory

As a CFO, your mandate extends beyond financial oversight. You’re focused on maximizing profits, minimizing costs, and mitigating risks. Inventory management is a critical component of this responsibility:

  • Excess stock ties up capital and increases carrying costs. This impacts your business’s profitability.
  • Inadequate inventory levels can lead to stock-outs. This affects customer satisfaction and consequently revenue.

To address these issues businesses must prioritize accurate and real-time inventory availability data. Investment in technology that is ‘inventory aware’, lets teams see which products are selling well and where. The result? You can prevent overselling. Reduce underselling. And have the right products available to customers at the right time to drive more sales.

2. ERPs aren’t designed for modern day order management

Contrary to common belief, if you rely solely on ERP and commerce systems for order management, it can prove limiting as a business expands. Complexities arise from:

  • Diverse sales channels
  • Increased sales
  • Multiple fulfillment locations
  • International growth

While ERPs encompass broader functions, a dedicated Distributed Order Management System (OMS) focuses exclusively on managing orders and inventory availability data. This gives businesses, customers and third parties greater visibility and transparency. Learn more about the difference between an ERP and an OMS in this eBook.

3. Reduce returns and fulfillment costs

Returns, a significant cost driver, are often executed by separate solutions. However, this approach can lead to a disjointed customer journey, and a costly one.
An OMS can streamline and automate the return process. This helps reduce:

  • Cycle times
  • Handling costs
  • Shipping costs
  • Fulfillment times and
  • Enhances the customer experience.

While commerce platforms and ERP systems may let you split shipments, they lack the ‘brain’ of an OMS. When you fulfill online orders from strategic locations and access more inventory across locations, you can reduce split orders and keep margins higher.

This strategy works for seasonal markdowns, too. If you can sell more stock online or fulfill from stores where sales are lower you will keep your in-store stock markdowns to a minimum.

In the competitive landscape of modern commerce, CFOs should leverage real-time inventory visibility. And invest in flexible modern OMSs that can help reduce stock levels, improve inventory turnover, and ultimately increase margins.

Why not see the ROI for yourself? Check out the Distributed Order Management ROI calculator here.

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Omnichannel Order Management ROI Calculator

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