Picking up from our last blog on “Order Management Systems”, this is an introduction to our upcoming 8-part series on how retailers must adapt their Back-Office Applications to meet the demands of Unified Commerce. At RIBA we know that IT teams in the retail industry are all-too-often stretched to capacity and so, through this series, our aim is to help retailers integrate their back-office system with all the technical innovation happening in this era of digital commerce.
Below you’ll see the infographic we use at RIBA when we are scoping Unified Commerce integration projects, specifically for integrations of Unified Commerce to the traditional retail back office. The infographic models the information flow in a 21st century retailer as it connects its consumer-facing apps and wholesale apps with its traditional back office systems.
The Retail Front Office
Retailers have embraced digital commerce in a big way. Shoppers are delighted with technical innovations that display products and prices, provide information, make offers, reward loyalty and take orders. The “Front Office” has escaped the confines of stores, the mall, and is well established in the 24/7 digital world.
In our graphic we identify seven sources for customer transactions. Retailers staff four of these applications — special ordering, call center, mobile POS, and traditional POS. In the others, shoppers transact business without retailer assistance on web stores, kiosks, mobile apps, and social.
All our clients seem to be active in at least two: web and POS, and most plan to expand their digital footprint once they achieve a platform for unified commerce.
The wholesale connection
Any attempt to landscape Unified Commerce would not be complete without Wholesale Apps. We do a lot of work for brands which typically run retail stores and consumer web sites in addition to their traditional wholesaler business. For them “unified commerce”, includes shipments to other retail channels, international affiliates, and licensees, as well as EDI Sales from wholesale clients.
As you approach the middle of the graphic from the left, you see Order Management System (OMS) which manages order fulfillment and ensure these orders are successfully delivered. In short OMS provides the same functions in-house as the wholesale channel. As we will see OMS depends on a tight integration with several back-office tables as well as with the various customer facing apps.
OMS deals with great levels of complexity. The modern retailer has 4 possible ways to fulfill a customer order: from the store stock, from another store, from a warehouse, or from the supplier. For each of these options there are three methods to physically deliver the merchandise: in-store self service, in-store pickup, and shipment to a destination. Now, imagine multiplying the 4 fulfillment options by the 3 delivery methods, each integrating with multiple customer transaction sources. Retailers are confronted with dozens of possible engagement/fulfillment combinations, each with unique data formats and cost dynamics. That’s a whole lot of data to keep track of and to integrate into processes that were not designed for Unified Commerce. Consider the process changes, costs, and integrity issues.!
Shared Data Repository and Essential Data Transformations
It is remarkable how many of the “front office” and wholesale applications listed on the left side of the graphic require secure enterprise-wide access to “back office” tables such as product, prices, customer information, location, calendar, and associate. Some applications also require access to inventory, orders, and recent sales history. The challenge is for retail data integrators is to support OMS and to provide the bridge between the back office and the front.
Now let’s turn to the plumbing which transforms the entire enterprise system with all its disparate parts into one Unified Commerce engine. You will note that in the center of infographic we have the “Shared Enterprise Data Repository” which exposes these back-office table to OMS as well as customer facing and wholesale applications. According to Retail Research, more than 50% of the “winning” retailers now have a shared repository. If you are not yet there, RIBA’s Retail Data Hub can provide this powerful capability.
Note with all the arrows going in and out of the Data Repository, it become the vital hub in our integration projects, hence Retail Data Hub. The alternative, a multiplicity of point to point transformations, is very limiting, expensive to maintain, and cumbersome to operate.
Back Office Apps
This bring us to the back-office applications which, for the most part, typically were designed for a simpler retail era. We group all the traditional systems into seven application sets: Sales, Merchandising/PLM, Planning/Assortment Management, Stock and General Ledger, Workforce Management/HR, Logistics, and CRM. In the next few blogs we’ll discuss how Unified Commerce refines the scope and functionality of each of these applications. We’ll highlight the unique integration challenges of each and show the additional user responsibilities that Unified Commerce demands. An integrated approach leads to better use of Analytics, Unified Commerce process change, and enterprise-wide optimization.
And lastly, on the far right we highlight the role of powerful Analytics that can be achieved by harmonizing these disparate systems and information flows. The key, as we’ll show in blogs to follow, is a well-constructed, dynamic path into the Data Warehouse which becomes the “single point of truth” for your commercial activity, retail and wholesale, front office and back. Come back soon for the rest in this series about working towards a Unified Commerce Back office. Next week we’ll look at Sales Management and Reporting in Unified Commerce.