Build vs. Buy: OMS Specific Perspectives

The rise of omnichannel eCommerce has thrust the Order Management System (OMS) into the spotlight. No longer a back-end workhorse, the OMS now plays a pivotal role in shaping the customer journey, driving conversions, and enabling seamless experiences across channels. This increased prominence has ignited the age-old "build vs. buy" debate, forcing businesses to grapple with the complexities of owning and managing this critical system. In this Order Management Gurus discussion, seasoned retail technology leaders offer a comprehensive guide to navigating the build vs. buy decision in the context of today's dynamic eCommerce landscape.

Order Management Gurus, Panel 7: Build vs. Buy OMS Perspectives

Building software is easier than ever, isn't it? Top-tier retailers (with $20B+ in revenue) having the size, scale, and risk appetite to afford to build and try out software have done that. But is that always wise, especially for the next tier ($1-$20B)? Get OMS-specific perspectives and ideas from both sides of the debate from real practitioners making those decisions today! 

Panelists:

• Todd Treonze, SVP & CIO, Brooks Brothers & Reebok
• Syed Arij, VP of Product Management, Walgreens Boots Alliance
• Keir Mcintyre, Sr. Director Engineering - OMNI Technology, Dick's Sporting Goods

Moderator:

• Chap Achen, VP, Product Strategy, Nextuple

The Build vs. Buy Crossroads (00:06:40)

One of the first dilemmas facing OMS product managers is whether to build a custom solution or buy an existing one. This critical decision requires a deep understanding of your business needs, technical capabilities, and long-term goals. Our experts recommend starting with a crystal-clear product strategy, aligning with stakeholders on desired outcomes, and involving architecture and engineering teams early on to assess feasibility and leverage existing systems effectively.

The OMS Evolution: From Back-End to Center Stage (00:04:58)

Gone are the days of the monolithic OMS. Modern systems are dynamic ecosystems of interconnected microservices, each playing a crucial role in orchestrating the intricate dance of order fulfillment, inventory management, and customer service. This evolution has elevated the OMS to a strategic imperative, forcing businesses to rethink their approach to ownership and management.

Building Your Case: The Art of Persuasion (00:06:54)

Convincing leadership to invest in building OMS components requires more than just technical arguments. It demands a compelling narrative that connects the technology strategy to the business strategy, demonstrating how a custom-built solution can drive tangible value and competitive advantage. Articulate a clear vision, highlight potential capabilities and ROI, and address risks and organizational readiness. Mastering the art of storytelling is essential for securing buy-in and resources.

Time, Cost, and Complexity: Weighing the Options (00:16:35)

The decision to build or buy hinges on a multitude of factors, including time constraints, budget limitations, and the complexity of the desired functionality. While buying an off-the-shelf solution may seem faster and cheaper upfront, the long-term costs of customization, integration, and vendor dependency can be significant. Building a focused in-house solution, on the other hand, offers greater control and flexibility but requires significant investment in talent and infrastructure. 

The AI/ML Revolution: A Game-Changer (00:20:45)

The rise of AI/ML has added a new dimension to the build vs. buy debate. AI-powered OMS solutions can unlock significant value through intelligent automation, predictive analytics, and personalized experiences. However, building such capabilities in-house requires specialized expertise and significant investment. Companies with mature AI/ML infrastructure and data science teams may be well-positioned to build, while others may opt for pre-built AI/ML modules or partnerships with vendors offering these capabilities. 

Sustaining Innovation: The Long Game (00:26:02)

Building an OMS solution is not a one-time project; it's a long-term commitment to innovation and continuous improvement. Maintaining momentum requires ongoing investment in talent, addressing technical debt, and staying ahead of emerging technologies and trends. Failing to do so can result in a stagnant system that quickly falls behind industry standards and fails to meet evolving business needs. 

Setting Boundaries: The Role of Guardrails (00:32:36)

While formal "build vs. buy" guardrails may not always be explicitly defined, companies often have implicit guidelines based on strategic importance, core competencies, and risk tolerance. The decision-making process should involve a thorough evaluation of business needs, technical feasibility, and long-term costs and benefits. It's crucial to align the chosen approach with the overall technology strategy and ensure it supports the company's long-term vision.

Piloting Your Way to Success (00:37:30)

Embarking on the build journey can be daunting. Starting with a small, well-defined pilot project can be a valuable way to gain experience, test assumptions, and demonstrate value. Focus on areas with clear ROI potential and align with existing skillsets and technology capabilities. This iterative approach minimizes risk and allows for continuous learning and improvement.

The Business Owner's Perspective (00:47:48)

Business owners play a critical role in shaping the OMS vision and defining its capabilities. They should be active participants throughout the process, providing input on requirements, evaluating solutions, and ultimately taking ownership of the implemented system. Fostering a strong partnership between business and technology teams is essential for success.

Defining the OMS Domain: Knowing Your Boundaries (00:41:30)

While the OMS is a central component of eCommerce operations, it's crucial to recognize its boundaries. Not every business capability needs to reside within the OMS. Carefully evaluate the ownership and interdependencies of different functionalities to determine the optimal solution architecture. This may involve integrating with other systems or leveraging specialized solutions to address specific needs.

The Blurring Lines of Build vs. Buy (00:57:59)

The traditional dichotomy between build and buy is fading. Modern OMS platforms offer greater openness and extensibility, allowing companies to leverage pre-built components while customizing and building on top of them to meet specific needs. This hybrid approach offers greater flexibility and allows businesses to strike the right balance between leveraging vendor expertise and maintaining control over critical functionalities.

By embracing these key principles and continuously adapting to the evolving eCommerce landscape, businesses can conquer the OMS dilemma and unlock the full potential of this critical system to drive growth, efficiency, and customer satisfaction.