How B2B Order Management is Improving Efficiency and Driving Growth
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The popularity of B2B ecommerce is on the rise.
Frost & Sullivan predict that B2B ecommerce will hit as much as $6.6 trillion by 2020.
But, with this increased market opportunity comes increased customer expectations.
You’re now more likely than ever before to be supporting B2B buyers and purchasers that have grown up with the Internet and the digital age at their fingertips. In fact, Lead Forensics claim that over 73% of B2B sales transactions now involve millennial decision makers.
In order to satisfy this new cohort of buyers, a streamlined B2B order management process is vital.
Dealing With Complexity
B2B online orders tend to be more complex than the average B2C online sale.
They often have a higher cost of customer acquisition, while the average buying cycle is usually much longer and requires more advanced technologies like punchouts, RFPs and EDI.
But by using an online order management system combined with best practice workflows and a solid strategy, your business can improve its operational efficiency and overcome the challenges frequently associated with B2B order management.
B2B Order Management
B2B order management is the process of tracking orders placed by your business’s clients and managing the necessary fulfillment processes for them.
A typical B2B order management process looks like this:
- Your sales representative enters the order from your customer onto your order tracking system – be it order management software, ERP or manual spreadsheets.
- If you have a B2B ecommerce business, then this first step can be overwritten by your customer placing their own order online – either through a dedicated B2B ecommerce platform like BigCommerce or via a custom online portal.
- An order confirmation is sent to the customer.
- The products are reserved and allocated to the orders – either manually or automatically.
- The order is sent to the warehouse to be picked, packed and shipped, while a back order is created for any out of stock items.
- A dispatch confirmation is sent to the customer.
- The order is delivered and received by the customer.
On occasion, you may also need to track and manage returns, exchanges and refunds, which are all considered to be a part of the order management process.
What is an order management system?
An order management system is any platform, tool or technology that’s used to centralize and track orders, as well as inventory levels and shipments.
Although we’ll discuss your options in detail further on, it’s widely recognized that there are five common types of order management systems:
- Your ecommerce back-end.
- Standalone order management software.
- Enterprise Resource Planning (ERP) software.
- Retail and B2B operations platforms.
Challenges of Online B2B Order Management
As mentioned, the rise in popularity for B2B ecommerce has heightened expectations, while different methods of buying and selling have introduced complexities.
Listed below are the most common challenges B2B businesses are faced with today.
1. Global supply chains are complex and growing.
From third party logistics (3PL) providers to dropshipping companies, alongside traditional in-house supply chain methods, there are now a myriad of ways in which to fulfill orders and complete shipments across the globe.
When working with a 3PL, you’ll send regular shipments of inventory to your logistics provider, while they handle all order shipping, returns, freight forwarding and even order processing, depending on the service package you agree on with them.
Dropshipping fulfillment involves forwarding orders and shipments as a request to a vendor or manufacturer. They will then be responsible for sending the items to your customers on your behalf, usually with your branding on, so the customer is unaware you’ve even used a dropshipping company.
But one particular standout supply chain method which presents B2B businesses with a whole new set of challenges and complexities is Electronic Data Interchange (EDI).
EDI provides businesses with the ability to exchange documents and transactions between trading partners in a standard electronic format.
For example, your clients could send a purchase order to you digitally through EDI, rather than sending a paper document or fax.
Buyers within larger companies that choose to do business with you – such as Target, Walmart and Tesco – expect your systems to be able to talk with theirs, as this saves valuable time, money and resources when it comes to placing and completing orders.
Thankfully, there are lots of companies out there that specialize in EDI integrations for both your ecommerce store and order management systems to make this process less complex.
2. Multichannel selling along with a growing demand for online shopping.
More online orders means more orders to fulfill, which can put a strain on your processes if your business lacks speed and efficiency.
This is where inventory inaccuracies can also often creep in, especially if your systems and processes don’t enable inventory updates across all your channels in real time, regardless of how much you buy and sell.
Additionally, if you’re operating as a hybrid retail and B2B business, then you’ll also require “two-speed order fulfillment”.
You’ll be processing fewer (but larger) orders at the same time as smaller but more frequent ones, while also having to balance longer lead times for your B2B customers with shorter lead times for your B2C customers.
3. Purchasers have high standards.
As your B2B customers are likely placing larger and more valuable orders with you, as well as often looking for a long-term supplier to do repeat business with, they will usually have much higher standards than your B2C customers.
While one-to-one sales meetings, attractive discounts, personalized service, and efficient ordering processes are also key for most buyers.
Your business must be able to compete with these high demands. Failure to do so, and you’ll risk chargebacks and canceled contracts from your highly valuable B2B customers.
This is where efficient order management systems and ecommerce platforms with inherent support for your unique business type are key.
4. Business needs differ from consumer needs.
Just as your B2B customers have different expectations when it comes to your business and its processes, they also have different needs.
You must be able to support any combination of the following requirements:
- Face-to-face meetings and orders on the road.
- Bulk discounts.
- Tailored pricing.
- Back orders and pre-orders.
- Varied payment options and credit terms such as proforma invoices, deposits, split payments and payments on account.
- Varied delivery options such as partial fulfillment, dropshipping and back-to-back ordering.
- Online ordering and self-service order management.
- Regular communication and personalized updates.
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What B2B Order Management Can Do For You
To help you overcome the above challenges, effective B2B order management systems can step in to take much of the manual grunt work off of your hands, leaving you free to work on exceptions and your front of house strategy.
1. Manage orders over all sales platforms.
This means you can accept orders wherever your customers are browsing and buying while processing them in line with your unique workflows and practices.
This will save time for both you and your clients by reducing the traditional back-and-forth that typically happens between you, such as inventory management, creating and updating orders and processing payments.
So whether your B2B customers submit orders online, over the phone, via EDI or in person, you’ll be able to gain an overview of them all easily.
Additionally, if you’re a hybrid B2B and B2C business, then your systems should also capture sales from other platforms that your retail customers are using, such as Amazon, eBay, and brick and mortar.
2. Go paperless.
Today’s order management systems are often cloud-based.
In fact, Forbes states that as much as 60-70% of all software, services and technology spending will be cloud-based by 2020.
The main reason why cloud systems are so prevalent is they enable businesses to go paperless.
This helps you to improve business efficiency by making your data easily accessible from anywhere in the world at any time while protecting the environment from heavy (and unnecessary) paper usage.
With cloud-based systems, you’ll no longer need to send direct mail, faxes and handwritten letters.
Instead, you can use email and specialist online platforms to communicate with your clients and take orders.
Alongside the environmental benefits associated with reducing your paper usage, you’ll also free up budget usually spent on paper, ink, and toner, which can be put towards other business needs.
3. Centralize information across multiple channels.
Whether your B2B customers buy from you online, face-to-face, by phone or EDI, all your orders and inventory will be tracked in one central platform.
This ensures your business will be underpinned by accurate, consistent and reliable data, no matter how and where your customers place their orders.
4. Reduce supply chain complexity.
By centralizing your orders and inventory data, you’ll be able to more readily control your inventory across the globe.
From when an order first comes in, through picking, packing and shipping, you’ll easily be able to track those orders and comment on the current status of each one.
Not only will you be able to do this for all your own warehouse locations and stores, but also warehouses belonging to third-party logistics (3PL) providers you might use, as well as marketplace fulfillment centers such as the ones governed by Amazon.
5. Track orders and keep customers happy.
By tracking your orders effectively, you’ll be in a better position to keep your customers happy.
Whether they ask for an update on the whereabouts of their orders, or need to make an amendment to a previous order or invoice, your staff can update them in record time – no matter who your customers talk to throughout the business.
Additionally, with technology to share the grunt work when it comes to order management, fulfillment and inventory updates, you’ll reduce the risk of errors and costly mistakes while speeding up operations and improving the overall customer experience.
6. Meet purchasers’ high standards through customization.
It’s no surprise that your business customers have high standards.
Their orders are often larger and far more valuable than their B2C counterparts, and unless your product or service is particularly niche, they’ll often have lots of competitive options to choose from.
One way you can set yourself apart from the competition is by evolving the experience and service you’re able to offer all of your customers.
An advanced order management system can offer the ability for you to customize key stages of the order-to-cash cycle for each customer, such as order fulfillment, shipping, invoicing, payment methods and sales channels.
7. Take orders in person.
As we established earlier on, your B2B customers will frequently have different requirements compared with your B2C customers.
One of which includes the need to make orders during face-to-face meetings.
A cloud-based order management system, especially one that has offline mode capabilities, will enable you to take orders on the road without missing a beat.
8. Get orders out the door faster.
Manually managing the B2B sales order process is time-consuming and frustrating for both employees and customers.
By adopting a sophisticated order management system, you’ll be able to automate several time-consuming processes including order allocation, fulfillment, warehouse routing, shipping updates, inventory updates and more.
This will allow you to get orders out the door and into the hands of your customers faster and far more cost-effectively.
Signs Your B2B Business Needs an Online Order Management System
If your business is starting to show cracks in your ability to successfully service your B2B sales, then you’re likely experiencing one or many of the following symptoms.
1. Sales channels are hard to keep up with.
Processing orders on just one channel is complex enough as it is. But managing orders across multiple channels – be it ecommerce, online marketplaces, phone, EDI or in person – adds a whole new layer of complexity.
With multiple touchpoints, there are more opportunities for delay, human error, and bottlenecks – and you risk losing control of your business.
You’ll need to have a centralized view of orders, instant inventory updates across all channels, perhaps even triggered by multiple warehouses, and the freedom to report on which channels are performing better than others.
Typically, businesses aim to implement a B2B online ordering system once they’re processing over 100 orders per day.
2. Inventory frequently runs out suddenly.
Without an effective online order management system in place, you’ll naturally fall behind the volume of orders you have to process, especially as your business grows.
Inventory won’t be allocated and reserved to orders in time, inventory levels won’t be updated across your sales channels, and you’ll likely oversell the inventory you do have.
Resolving overselling issues is still one of the core reasons why businesses consider B2B order management software, yet it’s one of the simplest challenges to overcome once this technology is in place.
3. Data and information seem scattered and hard to manage.
In the beginning, many businesses rely on separate systems to help manage their orders.
Often, this is a combination of their B2B ecommerce platform, standalone order management software and an accounting or bookkeeping system.
However, with this sort of technology stack in place, data is heavily siloed.
Your staff will need to constantly log into different systems to complete tasks, while real-time insights can rarely be achieved.
This results in inefficiencies within the business, as well as out-of-date finances and sales reports.
4. Buyers find your system difficult.
Customer expectations are rising, which means – at a basic level – your B2B customers want to easily obtain information on their order status, get their questions and concerns answered quickly, and trust that the products they’ve ordered are available and will be delivered to them in a timely manner.
But if your customers find it difficult, cumbersome and time-consuming to get this information, then you’ll face risks of them become increasingly dissatisfied and more willing to do business elsewhere next time.
Instead, by making ease and efficiency the core of everything you do, you’ll improve customer lifetime value and loyalty, win repeat business and gain traction with new customers as well.
Top Online Order Management Solutions for B2B Sales
As a start-up B2B business, you’ll likely choose to manage your sales via spreadsheets and the back-end of your ecommerce platform.
But once you’re processing over 100 orders per day, you’ll want and need a more automated approach.
This is where the following top online order management solutions for B2B sales can help.
1. Standalone order management software (OMS).
A combination of standalone order management software (OMS), an ecommerce platform, and separate accounting software is often the first step B2B businesses take to improve operational efficiency.
OMS enables you to centralize your order data, often across channels, while the more advanced order management systems also include inventory management and reporting functionality.
However, this type of setup falls short when attempting to integrate effectively with other technologies you may need, such as shipping and fulfillment software and accounting systems.
Comparing and correlating data across different departments takes more time and requires double data entry; not to mention access to real-time data is nigh on impossible.
2. Enterprise Resource Planning (ERP) software.
Enterprise Resource Planning (ERP) software is the next most common approach for businesses to take once they’re experiencing the operational inefficiencies frequently associated with siloed data and systems.
ERP systems span a wide berth of features from order and inventory management, through to financial management, purchasing, CRM, warehousing and logistics, and even as far as human resources and payroll.
However, despite boasting a wealth of features, ERP software is often not tailored towards specific industries and business types, which means you may be paying for features you’ll never use or need, while potentially missing out on useful industry expertise and best practice.
Furthermore, they are often complex systems to navigate and learn, while taking much longer to implement than other B2B technology.
3. Retail and B2B operations platforms.
Your third option – and one that takes the best of both of the previous options – is a specialist retail and B2B operations platform like Brightpearl.
A retail and B2B operations platform has all of the main functionality you’ll need including financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse management, and logistics. Note that some features associated with traditional ERP software like human resources and payroll aren’t included.
As these systems are tailored towards the unique complexities that retail, wholesale and B2B businesses represent, you can be rest assured that your workflows governed by the system will adhere to best practice and provide you with the seamless buying experience that your clients are demanding.
Furthermore, as they’re tailored towards your business type and have a few less features compared with traditional ERP systems, most users launch with their new system within just 90 days on average; a third of the time compared with most ERP systems.
B2B presents massive market opportunity for your business. However, supporting this type of customer and their increasingly high standards does come with its challenges.
By adopting slick processes and the right technology to not only support your B2B transactions but all of the processes after the buy button, you’re more likely to reduce costs while driving revenue.
If B2B is (or is going to be) a major part of what your business does, then your next steps are to identify which B2B order management solution will work best for you and your business.
For smaller businesses processing less than 100 orders per day, standalone order management software is likely going to suit you well.
However, there’s also an element of future proofing needed if you plan to fully capitalize on the growth of B2B ecommerce.
This is where specialist retail and B2B operations platforms are truly going to allow you to compete by promoting efficiency, centralized processes and real-time insights across your business.
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