Taking the order is easy. Keeping the promise is where it breaks | Ep. 5

Episode 5 – Taking the order is easy. Keeping the promise is where it breaks – Transcript

Matt: Welcome to Data Versus Commerce, where we explore the messy middle between database and doorstep. I’m Matt Johnson.

Floyd: And I’m Floyd Blaikie. Let’s dig in.

Matt: Hey guys, welcome back to Data Versus Commerce. We’re joined by a special guest, our friend and colleague, Keith Gorney. He’s our OMS practice director — all things order management — with a really deep background in both direct-to-consumer and B2B. We’re excited to dive into customer experience and how orders get processed today, what’s lacking, and where we’re heading in these different industries we serve. Keith, welcome to the show. I’d love for you to start off by telling us a little about who you are and what you do.

Keith: Sure, thanks Matt, I appreciate that. I’ve been in the direct-to-consumer, B2B, all-things-order-fulfillment space for 25 years. I started my career at Best Buy and oversaw their entire order management solution — about $10 billion of their annual revenue came through that platform. This spanned direct-to-consumer as well as all their B2B sales — it was a very prolific, extended application. I carried that over into a number of consulting roles, spent some time with Urban Outfitters, Free People, and Anthropologie on the direct-to-consumer side. Now everything is focused on ensuring our customers are set up for success, regardless of the industry they’re in, in meeting the promise they’re setting with their customers for order fulfillment.

Floyd: Keith, I saw a crazy stat in the last couple of days — I remember hearing about Millennials slowly becoming the largest cohort of B2B decision-makers, and I realized that was like 11 years ago. Now over 70% of B2B buyers are Millennials and Gen Z, which makes me feel old and crusty. Boomers are basically all retired, Gen X is still a big force in the workplace, often in leadership roles — but if we’re talking about the people researching solutions, having those initial conversations, feeling the pain of any business problem, it’s really often people who grew up buying things online and having that be a super seamless experience. So I think there’s an expectation now that it should be as easy to buy from a manufacturer or distributor as it is to buy something from Amazon. I want to unpack with you how true that is, and whether B2B can get to where B2C is in terms of making that purchase process easy-peasy — at least from the outside looking in.

Keith: Yeah, and I think we’re seeing a lot of that in this space. Those expectations — the ability to navigate, find, buy, trust, and get — come to fruition in an accelerated manner, and there’s frustration when you can’t. So it’s incumbent on manufacturers to understand where their customers are approaching them from — whatever channel, phone, web, device, doesn’t matter, salesperson shoulder-to-shoulder on a device, doesn’t matter — the expectation is that whatever you’re showing on a screen is the truth. Whenever you can’t manifest that through the life cycle, it becomes a huge issue. So don’t only consider the finding and navigating — trying to self-serve — but also adding to cart, availability, and promise dates, all of that coming to fruition. It’s easy to take an order, right? But when it comes to the execution side, that’s where the friction really starts to manifest — you gave me a promise, and I expect that promise to be met. When you can’t meet it, I’m going to find it somewhere else. Direct-to-consumer has been dealing with that since its inception, but now B2B has become more prolific and demanding from its customers to accommodate those promises.

Matt: Yeah, and in B2B, I’m probably not necessarily going to go somewhere else, because maybe I’m contracted to buy from this particular supplier — but I’m certainly going to go to a different channel. I’m going to call my rep, or email, or I’m just going to abandon the digital commerce channel entirely, because why not, right? There are gaps, and I need information now. In a B2B context, this isn’t something we can wait on — there’s a factory line, there’s a piece of equipment that’s down. Order management, I think, is the unsung hero behind what makes really good B2B commerce experiences work. I don’t know about you, Keith, but I feel like adoption really is the most important thing in terms of using these e-commerce websites. If a customer can’t trust what they’re seeing, and they don’t have updates, and they have to turn to a phone — I mean, God forbid. We Millennials do not like picking up the phone and calling a rep.

Floyd: Don’t make me do it.

Matt: Something’s gotta give, right?

Keith: Yeah, and I think you kind of hit the nail on the head — I’m going to navigate through, around, I have a need. The reason to buy, the reason to purchase, the reason to spend money is to fulfill a need. These buyers are held accountable to meeting those needs — it’s not like they’re sitting around wondering what they should spend their money on. They’re coming to you for exactly what they need, when they need it. So being able to not only manifest that through a direct conversation, but also mirror it in any channel you’re executing with your customers, has become more the norm and the expectation. Think about the drain it causes an organization that can’t get that right — because if they don’t trust your website, they’re not going there. You fail once, you fail twice, forget it — they’re just going to go down a single path, and usually that’s your more expensive path to go down.

Floyd: So don’t manufacturers and distributors already have enough platforms involved in e-commerce? You can’t just connect the storefront to the ERP and hope for the best. Why haven’t we seen OMS enter that B2B commerce tech stack conversation as much as ERP and things like that?

Keith: I think it’s a matter of fit for an organization. Especially — I’ll work with companies that have a multitude of banners underneath their brand, and manufacturing, and each of those is connected to an ERP. When you start thinking about having to modify or upgrade, you’re doing it against all of those different ERPs — your requirements have to be met in each and every one of them. So from a fitment standpoint, it really comes down to not just whether I have the technology, but whether I have the right technology. What we’ve seen is that ERPs — while every organization needs one — they’ve become so relied upon that it’s more like we’re working around it versus with it. That’s where an OMS comes in — it evangelizes the opportunity to do massive things like global inventory visibility. Right now what you see is channel conflict — phone, device, salespeople, manual orders — they’re all flowing in, and when you can’t execute those in real time, that demand starts compounding on itself, racing against inventory. What an OMS does is capture all your different channels of inventory and supply chain availability, and expose that to all your channels, so you have a real-time version of the truth to produce for your customers. That’s the 101 — just getting inventory availability correct. Then you get into the nuances of, what’s the fastest, best, easiest, cheapest way to get this to that customer? A lot of times you’re taking those race-condition orders and having to make phone calls back saying, “I’m sorry, we actually don’t have this inventory, you’re going to have to wait.” So the ability to put that data in front of your customer, so they can trust that yes, this is available right now, is paramount to creating that trusted experience with your buyers.

Matt: One of the things I was thinking of, Keith, as you were talking, is we often think about the buyer’s experience — but what about the customer service team and their experience? When you’re locked into an ERP system, a legacy platform with a lot of limitations around the real-time data and control they need around an order, a lot of it requires them to go into these legacy systems, make changes, jump on an email, jump on a phone call. There’s a lot of back-and-forth. This isn’t the way Millennial and Gen Z customer service reps want to work. We’re living in a world today where we have the ability to connect best-of-breed systems into an ERP a lot more easily than we ever did. Why not give the team the tools they actually want to use, that help them serve their customers more efficiently and more easily? I think user experience at the sales level matters too.

Keith: Yeah, and I think that’s a great point — the experience doesn’t end with clicking the submit button and then just hoping and praying. There are a lot of nuances that go into the journey to get that order fulfilled, especially if you’re manufacturing based off that demand. So you need to understand not only the workflow behind the scenes, but also — any time a customer calls in and says, “I need to change this, I need to accelerate this, I need to pause on that” — you need to give your customer-facing resources the ability to adjust on the fly. The common use case is, “You know what, cancel it, let’s recreate it” — cancel the order and start from scratch — and that’s created a ton of friction, because sometimes these are hundred-thousand-dollar orders, and starting from scratch is effectively unacceptable. So your ability to pivot and look at an order not just as a whole, but as the pieces and parts, and modify that to accommodate your customer’s requirements, is massive. An OMS allows you to look at each and every piece of that journey — order line statuses, quantities fulfilled, quantities out for shipment — so you understand precisely what you can do for that customer when they’re right in front of you.

Floyd: Let’s take a step back for a second, because I’ve worked in manufacturing on the marketing side for a long time — I’m a weirdo, I think it’s exciting. I’ve worked with a lot of manufacturers and distributors where e-commerce makes a lot of sense — you’re buying components, buying widgets at scale, you want to do that in a self-serve way. I’ve also worked with manufacturers who sell $20 million industrial automation equipment, so we’re probably not going online and buying a $20 million robot with one-click checkout. How does this conversation extend to manufacturers who sell really complicated, highly customized, high-dollar-figure stuff?

Keith: Yeah, I think you start with the journey of building — I have to build this out, I have requirements that require pieces and parts, and I need an experience that lets me understand dependencies. If I’m buying widget A and widget B together, are they compatible? Building out a full-fledged solution really gets back into the data. But even more important — if I have all these components I’m offering, but they’re not available, then I’m actually building a mechanism for failure. There are all sorts of rules an OMS can manage to say whether or not I can actually fulfill that. One of the larger things an OMS does that manufacturing benefits from is it not only understands what you have in stock, but it can also drive requests to replenish. So if you’re out of stock and demand is coming in, it can automatically generate replenishment requests from wherever they need to come from, and navigate it all to a single facility for the component build. It can merge all that information on a single order and say, “Where is all this stuff? Find it, put it all at the assembly location, get it assembled for that customer.” That journey is very manual in an ERP world, whereas in an OMS you can set up rules that say, “This is the node I want to build this in — now go find the fastest, cheapest, easiest way to get all this product in so we can manufacture it and deliver it to a customer.” You see this even in direct-to-consumer — people buy home theater installations online, but the speakers, wires, components, television, and everything else don’t all sit in one box. They all have to get merged together to get onto a delivery truck and come to your house for someone to install it. This isn’t a new feature we’re just uncovering — OMS has been doing this since it became popular in the early 2000s.

Matt: It reminds me of a particular industry that’s fairly legacy in how it operates — very ERP-reliant — and that’s electronic components. Think about all these data centers — we just did an episode about AI — and all these different installations, electrical installations going on, the chips, the wiring, the harnesses, the conductors — there are all these components that need to be delivered to a customer, and they’re all handled individually. Imagine the experience you can create for the customer if you’re able to orchestrate all these different components and deliver them, and do it all online without this crazy custom sales process that requires so much manual quoting — digging into different systems, pulling back numbers, delivering the quote and the lead time. These electrical engineers, the people on these projects today, they require a different online experience. But it’s crazy that in their day-to-day, they’re using state-of-the-art technology, and yet when it comes to the actual digital supply chain they’re trying to source their products through, it’s completely busted.

Keith: I think two things I’ve seen in this advent: you see branded manufacturers — people selling direct-to-consumer and also wholesale — where their direct-to-consumer channel has an OMS against it, but their wholesale is ERP-driven. We’re seeing this massive migration of, “Well, guess what — it’s the same products I’m offering direct-to-consumer and through wholesale, so if I can merge all of that into one platform, now I don’t have to reserve one bucket of inventory for one channel and another for the other. I’ve got this holistic pot of inventory, and anybody can come and get it.” We’re seeing that a lot with branded manufacturers who have a direct-to-consumer channel but are also servicing the wholesale model. The other thing that’s very interesting is — we talk about how complex B2B orders can be. In a typical D2C scenario, it’s “I want it and I want it as fast as I can get it” — BOPUS, in-store pickup, curbside, DoorDash, however fast I can get it. Whereas in the B2B model, speed is great, but it’s the expectation that’s even more required. My order may not just be, “I want it today,” it’s, “I’m ordering for a job that’s going to be executed three months from now.” Think about that — if they’re ordering 1,000 pieces, are you going to hold 1,000 pieces of inventory for three months? Or is your OMS going to capture all that demand and say, “I know I have this demand coming in three months, but I can take orders against the 1,000 that’s just sitting there, and ensure I have replenishment coming into my supply chain in time to meet that need three months down the road”? That’s a huge thing we’re seeing — in the advent of leveraging ERP, but now adding this new technology of an OMS, you’re able to optimize your inventory flow, because you actually understand what you have, when, and where, and can optimize how your order demand is fulfilled.

Floyd: Well, I do look forward to the future you’re building, Keith, where you can DoorDash a $20 million robot. 2030, 2035 — what do you think, if we’re thinking about a manufacturer or distributor —

Matt: You’re right.

Floyd: — and yeah, $20 million will get me like a Roomba by 2030, it’s true. If we’re thinking about a manufacturer or distributor that’s leaning entirely on ERP right now to run their e-commerce, and they’re feeling the pain of that legacy tech stack, where the bottleneck really is order management — what do they do first? How do they dig themselves out of that hole?

Keith: I think one of the main misconceptions about OMS is that it’s OMS or nothing — the way ERP is basically ERP or nothing, because you’re utilizing the entire support structure of that ERP. OMS can actually be built as components. And when I think of the largest issue impacting manufacturing today, it’s inventory availability. That’s the first step — OMSs typically have a native feature you can build as a service, so that every inventory movement, receipt, transaction, QA hold, all those things that impact inventory availability, get fed into an OMS component. You can just buy that OMS component, set it up as your first step, and expose that as a service of just availability. That’s the first step. The other side is the demand side — once you’ve gotten your feet wet and you trust the inventory you have, you can start to feed the quantity of demand — not necessarily order per se, but just demand — and say, “You started today with 1,000, the ERP just took in 10 different orders, now it’s down to 500, so this service should only be able to promise 500 to every one of your channels.” So you can step your way into this without a huge investment cost and change-management burden of pulling everything out of the ERP. You can migrate your way through it. And even in today’s market, it’s not the years-long migration everybody thinks — these are not year-long issues, these are months. We’ve done OMS implementations in three months. It’s just a matter of carving out the requirements of exactly what you want to meet, and you can start small — a specific channel, only phones, only certain types of customers. There are so many different ways to slice and dice this capability to begin appreciating the foundation of it as you build and grow on top of it. It’s not a big-bang, huge change-management curve — it can absolutely be used to optimize and migrate over time as you become more comfortable with it.

Matt: I love that, Keith. Digital transformation, as I’ve said before, isn’t about trying to do everything — it’s about doing the next right thing, in the right way. I love that about OMS, the composability of it, and the ability to scale without disrupting the entire sales org. Really good stuff. We really appreciate you being here, Keith — this was so awesome, so informative. We’re looking forward to getting you back on, and maybe we’ll bring an OMS customer too — I think that’d be fun.

Keith: There you go, that would be great — just to talk about their journey. I think that’s all relevant, especially as you look at the advent — as I said before, this isn’t an “if,” it’s more of a “when.” The industry, and everybody, is looking, and we’re seeing so much interest and actual intent to onboard this, that it’s becoming a norm, back like we were 20 years ago with direct-to-consumer — you had to have an OMS. I think it’s just taken its time because there wasn’t this expectation before — it was, “Okay, yeah, I’ll get it to you when I can get it to you.” But in today’s world, it’s becoming more and more of a requirement versus a nice-to-have. As we see this momentum, please do reach out and talk with us — we love this, I love the gear, I love the space, I love the process. We’re here for anybody who needs the help.

Floyd: Thanks so much, Keith.

Keith: All right, appreciate it.

Matt: Thanks, Keith. Talk to you soon.

Keith: All right, take care.

Matt: Bye. Thanks for tuning in to this episode of Data Versus Commerce. New episodes drop weekly. So if you’re responsible for any part of how products get from a database to a doorstep, subscribe now on Apple, Spotify, or wherever you listen.