Choosing the Right DOM for Your Business

When you run an online retail business, you always need to balance two competing interests: providing the best customer experience, while also optimising your back end order fulfilment process.

According to surveys, only 1 in 5 online retailers use the latest technology for their inventory management. Less than 1 in 4  make use of Distributed Order Management (DOM) and only about 16% are able to fulfil orders across multiple channels.

The digital age requires exceptional flexibility from your business solutions. Many businesses are stuck with legacy technology that doesn't give them the flexibility to adapt to the latest trends and expectations in online retail.

If you want to stay ahead of the latest developments in eCommerce, you have to use the latest technology with the best features. Which means you have to seriously consider switching to DOM.

But switching to a new technology platform isn't easy, and there are several excellent packages available in the market. How do you choose the most suitable DOM solution for your business?

We will attempt to answer that question in this article.

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What Does DOM Bring to the Table?

To run a successful eCommerce business, you need an effective system to manage your inventory and order fulfilment.

Which is why many online retailers use a DOM solution. Principally, they use DOM for the following reasons:

  • The system allows you to integrate your physical stores with your online eCommerce platform. Which means that customers are able to buy something online, then pick up their order at a store.
  • The system is good at managing orders in a sophisticated way. For example, multiple orders by the same customer can be consolidated to save time and expense on shipping.
  • The system will work out the most cost effective shipping option for each order, allowing you to compare rates between shipping partners and choose the cheapest option for every transaction, while still keeping delivery times short.
  • The system gives you unparalleled visibility in your relationships with business partners and distributors.
  • In other words, DOM allows you to process orders faster, cheaper and more accurately.

All this boils down to a better experience for customers. You put them in control of their interaction with your brand. All the while, you're able to track their shopping activity across all your channels.

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How is DOM Different from Legacy Solutions?

The main reason companies switch to DOM is to improve order processing and inventory management.

A DOM system is able to automatically handle inventory changes as orders are fulfilled and replenish stock as needed. Because the DOM automates many of the most important business functions involved in order processing, you will be able to optimise your supply chain to an unprecedented level.

The DOM integrates all your inventory and order information in a single interface. This makes extremely accurate demand forecasting possible.

DOM was designed with omni-channel retail in mind. It integrates several fulfilment methods in one platform—which allows more opportunities for optimising your processes than any other system on the market. It takes the complexities of omni-channel retail and makes it manageable.

DOM opens up the following possibilities for your business:

  • You will be able to link directly to various third-party logistics (3PL) partners.
  • Regular order fulfilment can be combined with various dropped shipped items in one system.
  • The system can automatically split or merge orders to lower cost and delivery times.
  • The system can automate the order routing process—allowing you unparalleled control over the different stages of order fulfilment, while keeping delivery times down.
  • The system gives you up to date inventory numbers which incorporates all buying and selling activities in your business. This means that you will never have to be uncertain about stock levels, eliminating inventory errors.
  • The system allows you to completely customise every  aspect of your order fulfilment workflow.
  • DOM is able to integrate with your existing technology platforms, allowing you to adapt and optimise your business processes as you grow.

All these features allow you to fulfil your core mission as a business: to process orders in the most cost- and time-effective way possible. The end result is that every interaction with customers is always smooth and satisfactory.

Gone are the days where you had to worry about lost orders, late shipments, out-of-stock issues, or any other reasons for unexpected order cancellations.

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Steps in Choosing the Right DOM

Switching technologies is a time-consuming and expensive exercise. You want to make sure that you go about this process in the right way—and that you choose the perfect DOM for your application.

Before you can choose the appropriate DOM solution for your business, you need to clearly define what you need from that system. You need to know your goals and exactly what you want to achieve with such a step.

Here are the steps you need to follow in choosing the right DOM for your business:

1. Get your Objectives and Priorities Straight

Think carefully about what you need the DOM to accomplish in your business. What is wrong in your current setup, and what do you want the new technology to accomplish? What are your objectives with moving to a new software platform? What options and features are important right now for improving your business?

It's essential that you discuss these questions with the different teams in your company to get their perspective. Include your suppliers in this discussion. Choosing the right DOM will require focus and careful attention to the different concerns, expectations and needs of each department.

If you go through this process correctly, you will end up with a clear understanding of why you need from your new technology setup. It will become clear which features are essential to your business, and which are merely nice to have.

Here are a couple of questions you should be able to answer before moving on to the next step:

  • What do you aim to achieve in terms of inventory management? Is your goal to minimise carrying costs, have better visibility in inventory numbers, or have better turnover in inventory?
  • What are your prospects for growth? Any new technology you bring into your business needs to help you achieve your goals, not hinder your progress.
  • Are your products seasonal, or do they sell well all-year round? If your business is more seasonal, you need a DOM that will be able to cater to your needs.
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2. Draft a Vendor Proposal Request

Now you will start to approach technology vendors for their input. Begin by writing a proposal request as it will help you organise your thoughts and communicate them clearly to the vendors.

Before a vendor can answer your questions with regards to their products, they need to know which core features are essential to your business. Every company has different technical requirements. You need to make that clear when you approach a vendor.

Here are some of the essential elements that you must include in your proposal document:

  • What are you ordering volumes  at present and what kind of growth do you expect in the future?
  • How many SKUs do you want to register in the system?
  • Which software vendors do you currently use?
  • Which technology solutions do you currently use?
  • What is your current software and networking capability?
  • What is your acquisition and implementation timeline?
  • What is your current employment training process? How much help would you need from the vendor in getting your team members up to speed on using the new system?

With such a document in hand, a potential vendor will have all the information to be able to determine if they can meet your needs. The aim is to find a match between your requirements and what the vendor's technology solutions can provide.

3. Research the Market

Do you know what the key features and limitations are for each DOM system in the market?  

Approach different vendors and discuss their different product offerings. Knowing what is available as well as the cost of the different offerings will enable you to make an informed decision.

However, finding the perfect isn't as easy as matching your requirements to the list of features for each product. Different software packages have a different user interface and operation  philosophy. Some packages might be intrinsically easier for you to learn and to implement, since it resembles technology you've used in the past.

That's why it's a good idea to try out the different options before you buy. Many DOM vendors offer demo versions of their products. You should get demos for all the products on your short list and see how they fit in with your workflow.

You might also want to read online reviews for each product. You don't want to rely solely on a company's marketing materials to form an opinion of their product.

The experience of other customers will give you a much better picture of the suitability of a certain technology to your business.

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4. Evaluate your Choice

In the previous steps, you will probably have gained valuable insights into the different DOM solutions in the market.

No single system will be able to meet all your expectations. There will always be compromises and trade-offs when choosing a technology solution.

The important thing is to make sure that you don't leave out an important feature or capability that will later become a frustration or hamper your growth.

Any new system needs to incorporate the features you need to make a success of your business. It needs to integrate seamlessly into your current operations and allow your business to thrive.

This is why you have to carefully review your choice of DOM solution. Don't only consider the features and functions of a particular product. Carefully consider the vendor and the relationship you will be able to maintain with them. They need to give you the support and attention you need and fit in well with your company culture.

Here are a couple of questions you need to answer before making the final decision on a DOM solution:

  • Will the DOM allow you to eliminate several of your manual business processes through automation? This is one of the key benefits of using a DOM, as it can save you a lot of time and money in the long run.
  • Does the DOM have the capability to to integrate your different channels and manage them within the same interface? Will it allow you to do business across geographical and currency barriers?
  • Will you be able to manage multiple warehouses and third-party logistics (3PL) partners within the same system?
  • Will the system be able to process your sales and inventory data to produce accurate demand forecasting? This is especially important if you anticipate large shifts in your market.
  • Will the DOM be able to integrate with the technology you currently use? Will you be able to connect to the technology used by your supply chain partners? This would include systems like warehouse management, accounting, and the various order fulfilment processes in your ecosystem.
  • Is the technology constantly being maintained and updated with new features? How regularly is the system updated?

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Switching to Distributed Order Management is a large step to take for any retailer. It will take a considerable investment in time and money. Nevertheless, the benefits of such a transition is well worth the expense—if you choose the right DOM for your particular requirements and market.

However, choosing the best DOM solution for your business is no trivial task. The best systems are able to aggregate orders flowing into your business from several channels into one interface, while making global inventory data available from a central hub and turning it into actionable information.

Distributed Order Management is nothing short of revolutionary. When you implement the correct system in your company, it can transform your business.

If you get the right DOM for your business, you will gain a considerable advantage over your competitors. You will also be in a much better position to serve your customers and grow your business.

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