As more and more companies move from offline to online, we are in a modern gold rush. But just like the gold miners, there are winners and losers when it comes to succeeding online.
While sales and marketing are critical to the success of online omnichannels, the equation is missing an often overlooked part – operations. Because if back-end processes are not included as a pillar of your omnichannel strategy, there is a risk of burnout and declines in sales.
Today, many companies use a combination of spreadsheets and legacy software to manage back-end operations: inventory tracking, planning, ordering, etc. However, these manual processes and disparate systems quickly fall apart.
So what should you do? How can you manage inventory, plan product demand, and get the right product to the right customer? The answer, of course, depends on what you’re trying to do.
In this post, we’re going to examine the different types of back office systems to determine exactly which ones you need – and get you on the road to automation.
4 types of ecommerce back office systems
Some of the most popular back office systems for managing e-commerce operations include:
- Order management systems
- Inventory management systems
- Warehouse management systems
- Enterprise resource planning software
Each has a specific functionality that can increase efficiency. Choosing the right role depends on the needs of your company.
1. Order management systems (OMS).
Let’s start with order management systems (OMS). At its simplest level, order management means how you process orders from the time the customer completes the checkout until they receive their item (and sometimes when they return the item to you). And the system is the method or methods you choose to complete the process.
This means that your OMS manages the processes associated with orders and their fulfillment, e.g. B .:
- Allocation of orders for dispatch to the corresponding warehouse
- Processing of orders
- Provision of a data record with data on the status of orders and the inventory they contain
Brightpearl does a great job of breaking it down even further if you want more detailed information about what an OMS can do. They also highlight the different types of order management systems, including:
Manual order processing: This could look like printing a CSV spreadsheet, then placing an order with your warehouse, printing a shipping label, and finally picking and packing the order for shipping.
Manage orders through your e-commerce platform: If you are only selling to consumers directly through your website, you can use your ecommerce platform to track orders. However, if you sell on other channels like Walmart or on social media like Instagram, it can cause problems.
Order management software: For smaller businesses that don’t have a large tech stack, order management software can work well, especially if you can integrate it with your existing ecommerce platform. Some good examples are SureDone and Sellbrite.
Most importantly, OMS software helps you automate it unlike manual processes and ecommerce platforms. And automation is key if you want to sell more and grow your business.
2. Asset Management Systems (IMS).
Now we come to the inventory management systems (IMS). Inventory management (sometimes called inventory control) is all about monitoring the quantities and locations of your products. It takes into account the entire product life cycle – regardless of whether it is on a shelf at your dealer, is currently being fulfilled or is currently being returned by a customer.
So if you can keep track of your inventory effectively, you’ll know exactly how much of each item you have, which items are running low, and when to replenish them.
Brightpearl has another great inventory management guide for more details. However, the benefits of effective inventory management include:
- Less the risk of running out of supplies
- More insights into high performing products
- Better customer experiences
- Great theft deterrent
When it comes to inventory management systems, they are very similar to those used for order management:
Manual systems: This can include tracking inventory using a general ledger or spreadsheets. However, these methods are very error-prone, especially when multiple people are involved.
Inventory management software: Software systems automate time-consuming manual processes and offer many functions, such as B. Low inventory notifications and real-time inventory reports. What’s even better is that cloud-based software can be integrated with your existing tech stack.
For example, Shopventory can be easily integrated into BigCommerce. This automated connection is especially beneficial for saving time when you are selling through multiple third-party marketplaces like Walmart and Amazon in addition to your ecommerce store.
The only downside to dedicated inventory management software is that it can get complicated for companies with multiple technology systems that need to work together.
3. Warehouse Management Systems (WMS).
If you already have an IMS, why do you need a warehouse management system (WMS)? While some people use IMS and WMS interchangeably, the latter has one key difference – it is specific to warehouse operations.
As SkuVault explains, a WMS is an important element of your supply chain that manages inventory, picking processes, reporting and auditing. Your WMS can work with your IMS to keep track of items that move throughout the process of storage, picking, and packaging.
In addition, a WMS can monitor multiple warehouses and centralize the information to facilitate the distribution of goods. Some warehouse management software can also help you automate the kitting and bundling process, which can potentially increase your sales.
SkuVault also shares the core components of a WMS:
- Take care of receipt and return to ensure you have the correct inventory
- Manage warehouse logistics, improve efficiency by reducing labor costs
- Integration with your existing technology to enable seamless order fulfillment
- Reporting and forecasting to maximize your storage space
So if you want to automate the receiving and sending of goods, warehouse management systems such as those offered by SkuVault and Scout TopShelf are an excellent choice.
Nowadays, some inventory management systems offer this functionality along with a number of other functions, including order management, inventory tracking, and order generation.
4. Enterprise Resource Planning (ERP).
Eventually we got to ERP (Enterprise Resource Planning) systems. ERP systems include many of the functions mentioned in the above systems – and a few more.
Another term used to describe ERPs is the enterprise management system for the reason that they can manage multiple areas within your e-commerce back-end operation.
ERPs do a little bit of everything from inventory and orders to payments and warehouse operations – and can eventually become the only source of truth for your data. For example, having access to accurate data was a big reason BigCommerce retailer Saddleback Leather switched to Acumatica for its ERP.
“I find that more and more people are using Acumatica because it is intuitive, makes sense, and is so easy to use. We don’t have spreadsheets and people have access to the same data all the time, ”said Dave Munson, founder and CEO of Saddleback Leather.
However, not all ERP systems are created equal. Legacy systems with limited functionality can actually stifle your ecommerce growth. Acumatica has a helpful checklist that you can use to evaluate the features you need for your business. This includes:
- Does it integrate seamlessly with your e-commerce platform?
- Can you perform important accounting and management functions?
- Is it in the cloud so you can sync and access data from the internet?
- How are you burdened as you grow and scale your ecommerce business?
- Does the system allow you to reduce risk and improve security?
Also, because of their feature set and centralization, ERPs are best suited for larger companies (both B2B and B2C), fast-growing DNVBs, and complex use cases such as B. Selling through multiple distribution channels, including online and in-store.
So if you’re looking for a place to start evaluating ERPs, BigCommerce works with several including Acumatica, Brightpearl, NetSuite, Microsoft, and Sage.
Key takeaway: automate your back office operations
Ultimately, it is imperative that you automate your ecommerce back-end operations, whether you are a small business or a global company. Because when you do, you unlock the keys for a better customer experience, less wasted time, greater efficiency and much more.