We evaluated the Total Economic Impact™ (TEI) of companies that simultaneously use two order management systems (OMSes). Our research uncovered surprising findings.
Our TEI focused on businesses that had a preexisting, primary OMS and then added modules of a newer, secondary OMS to fill functionality gaps. Our central question: Why — and is it worth it?
For our study, we applied the Forrester Total Economic Impact methodology, which allows us to calculate the ROI of a business decision. The TEI process includes interviewing representatives from companies that have made the business change in question. Then, we aggregate the experiences of interviewees into a composite organization. Finally, we create a financial framework from the material gathered in the interviews to prove the ROI. It considers everything from hard, direct costs to labor.
What did we learn?
Spoiler: Pursuing a dual OMS strategy is worth it! The positive ROI has a very short break-even point (less than six months). But there are major caveats, and these results aren’t guaranteed.
What we expected: Based on conversations with Forrester clients, we expected to find that organizations plan to perpetually maintain both solutions. We believed we would prove such significant benefits that the costs of maintaining both would be worthwhile. We were wrong — at least partially.
Two of the most unexpected takeaways:
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- The dual-OMS approach has a big impact on topline revenue in the pre-purchase stages. In fact, businesses that gained revenue-increasing benefits from the secondary OMS saw the most significant results. Modules that add functionality such as enterprise inventory management had the biggest impact. In fact, the modern module additions gave organizations tools to lock in sales that they previously lost due to stock inaccuracies. The dual OMS strategy allows brands to manage complicated inventory calculations and logic, such as managing “safety stock” more tightly. Organizations also served near-real-time inventory data into the shopping experience, which reduced order cancellations from overselling.
- Organizations unintentionally have begun a slow-motion “strangler” process. Most firms that used the dual OMS strategy initially intended to maintain both OMSes indefinitely, but businesses saw that slowly adding new modules from the second solution was as effective as a replatforming initiative but at a nondisruptive pace. That is why three of the four interviewees said they ultimately intend to incrementally replace their primary OMS with the secondary one. In addition to the considerable benefits the secondary OMS brought, interviewees realized the add-on process had inadvertently jump-started their replacement. They won’t move quickly, but with such a major step toward replacement complete, they now feel that the rest of the migration is possible.
The OMS market right now is currently in flux as longer-standing systems work to modernize their architecture. Meanwhile, the vendors with open, modular architecture are developing functionality and enhanced experiences that push the market forward.
In the full report, we dive into the details of how the organizations realized the ROI of their approach and how we calculated the economic benefits. We also noted the risks of attempting similar strategies due to the varying needs of digital businesses. To learn more, read the full report here. Have questions or need support about how to embark on a dual-system strategy in OMS or commerce? Please book a guidance session with me!
