Mid-Market Priorities for Order Management Success
We surveyed mid-market B2B professionals – manager through C-level leaders – to learn more about their priorities when selecting an order management system (OMS). The results shed light on where decision makers focus when approving potential investments, as well as revealed misconceptions about the key drivers of costs related to order management platform selection.
The Hidden Costs of Customization
Our survey found that total cost of ownership (TCO) is the most crucial factor for mid-market organizations when selecting an OMS, followed by customer service and store fulfillment capabilities. Surprisingly, extensibility and turnkey integrations ranked lowest despite being key drivers of TCO.
Extensibility and integrations enable customizations that impact implementation and ongoing costs. If not prioritized up front, most organizations will inevitably require extensions that risk overextending the system and increase TCO.
When isolating our C-suite responses alone, we saw a similar prioritization on cost. TCO topped the list with turnkey integrations consistently ranked as the least-important feature.
Mid-market firms should carefully evaluate extensibility and integration needs during the requirements gathering phase. Intuitive interfaces promoting business self-service can lower IT dependency and TCO, which is the most important factor to order management professionals across the board.
Navigating what to customize, how much to customize, and when to customize is a key driver and risk point for an implementation.
- Zach Zalowitz, Principal of OM, Perficient
A Priority Driving Mid-Market Growth
Inventory availability emerged as a top priority for the vast majority of mid-market organizations surveyed, with 87% rating it as “important” or “very important” relative to other priorities.
Effective inventory management is crucial for mid-market firms to meet customer expectations and avoid stockouts. Real-time inventory visibility across channels enables intelligent order routing and improves the overall customer experience.
How Inventory Fuels Cash Flow for Mid-Market Leaders
Our survey found that mid-market companies prioritize the financial benefits of strong inventory availability over customer experience factors. Minimizing holding costs and improving cash flow management emerged as the top-two ranked benefits, ahead of reducing stockouts, cancelled orders, and extra touches.
While the customer experience is important, our survey results suggest that focus is put on the working capital and inventory turn implications of effective inventory management. Focusing solely on customer service misses this critical angle.
When isolating our C-suite responses alone, improving cash flow management is the paramount benefit of stronger inventory availability capabilities, with 80% rating it as very important. Again, the financial metric took clear precedence over more customer-facing impacts.
When building a business case to invest in inventory availability solutions, organizations should lead with the cash flow and working capital angles. Make the financial justification for reducing holding costs, minimizing tied-up working capital, and increasing inventory turns. While customer service metrics like reducing stockouts and cancellations are relevant, the hard dollar savings and balance sheet impacts will resonate most with executives.
The person at the table ultimately approving inventory projects is the finance team, and you need to make a clear cash flow management and inventory turn business case in addition to the improved sales story.
- Zach Zalowitz, Principal of OM, Perficient
Summary
Perficient’s study reinforced that mid-market B2B organizations take a financially-driven approach when evaluating order management platforms. Total cost of ownership and working capital optimizations trump customer experience factors like reducing stockouts and cancellations.
For order management professionals building a business case to present to internal leadership, the findings highlight where to focus:
- Lead with the cash flow and balance sheet impacts.
Emphasize the potential for minimizing holding costs, reducing working capital tied up in inventory, and increasing inventory turn rates. While better customer service is valuable, the hard dollar savings and chance to free up capital will resonate most with executive leadership. - Take a rigorous approach to scoping extensibility and integration needs upfront.
Customizations can quickly inflate total cost of ownership if not carefully mapped out during requirements gathering. Promoting self-service capabilities through intuitive interfaces lowers IT dependency.
If you need to gain executive support to explore a new order management system, we can help you build a business case that focuses on financial priorities, while also backing it with market data and industry benchmarks.
If you're ready to start your order management selection, we offer a six-week platform selection jumpstart that evaluates TCO across platforms — including all customizations and integrations — allowing you to make the most-informed choice.
Contact us to learn more.