Ecommerce Operations Management: Why Back Office Systems Are Vital

ecommerce office managment (1)

Everyone is online nowadays. 

Those who aren’t, are trying to get in on the action. Everyone wants a piece of the pie, and are investing trillions in ensuring a competitive position in the digital sphere. 

Ecommerce businesses are no exception to this. New stores are popping up every day trying to get their products out into the world. 

Through efficient sales and marketing operations, they are able to make their voices heard. 

But here’s the thing: while these activities are effective in providing support, eCommerce businesses fail to take into account the impact of back-office operations in the process.  

Back Office. Sounds a bit professional, doesn’t it? Let’s look at this concept in detail. 

Back Office Systems: Revolutionizing Ecommerce Operations Management

Ecommerce Operations Management

The back office is where the actual magic happens. You could say it’s the boring part of running a business but it’s not. 

Back-office operations, which include everything from inventory planning, tracking, ordering, and key account management are as much a part of a business as the front-office. 

Ecommerce businesses, focused on growth, fail to take into account optimizing the back office: using basic spreadsheets applications for their back-office management systems. 

That’s only effective in the short term. 

In the long run, you’re going to face organizational problems that leave you scratching your heads for answers on what to do. 

In the paragraphs above, we mentioned “optimizing the back office”. What does that mean exactly? 

Well, it used to be that you could hire a spreadsheet expert who would organize all your business files in one place. Now, you have automation replacing that workflow. 

Automation software exists solely to optimize and automate repetitive tasks, making the workflows faster, effective, and less error prone. 

While business process automation can be applied to just about every aspect of a business, your eCommerce back-office operations can also benefit greatly from it.

Types of Ecommerce Back-Office Systems

Four of the most common eCommerce back-office systems include software for: 

  • Order Management 
  • Inventory Management 
  • Warehouse Management 
  • Enterprise Resource Planning 

As individual software products, all of them have a specific purpose. 

Their best use, however, lies in their ability to be integrated with one another for maximum efficiency and accountability. Depending on the needs and preferences of a business, one can easily choose any combination of these systems. 

Companies that sell software systems like Enterprise Resource Planning (ERP) include all these systems and more in their offerings. 

In the next few sections of the post, we’ll be discussing what benefit each of these software provides a business. 

1. Order Management Systems (OMS)

Order Management Systems

Order Management Systems (OMS) are the first in our list for a reason. Of course, every modern business wants to ensure that their eCommerce products are managed properly, ready to be delivered to the end-customer. 

That’s the basic level of what an OMS should do. It allows you to manage an order the moment a customer clicks on the checkout button on the website. 

It also manages things in the event of a return. But that’s the order management part of things. The “system” part includes the physical process you use to finish the order. 

If we were to give you a basic map (beyond the one we’ve discussed above) of how order management works, it would be: 

  • Receiving and sending the order request to the appropriate warehouse for shipping. 
  • Order processing. 
  • Recording and processing the data based on the inventory. 

Now, there is no single design to an order management software. There are thousands of software out there (good and bad) that work in some way and exclusively for order management. Let’s look at three examples of what an OMS software might look like: 

  • Manual Order Processing: This can look like a simple software which takes in the orders, and manually makes you add the order entry into the spreadsheet. It also makes you place the order at the warehouse and get it ready for delivery. 
  • OMS for an Ecommerce Platform: The very basics of order automation comes in the form of an OMS integrated with an eCommerce platform. It helps to keep your orders in check and manage accordingly. However, if you’re looking to manage your orders by selling in a marketplace like Amazon, then this software is going to be problematic. 
  • Complete Order Management software: The most important one of all. This is usually integrated with the eCommerce platform, but can also work with other external marketplaces.

What way you choose to go with an Order Management Software depends on your preferences. The end result of all of that is automation. These tools help save you important time that can be used for other tasks like, for example, managing the front office operations for account management. 

2. Inventory Management Systems (IMS)

Inventory Management Systems

Inventory management system does what the name suggests – handle, organize, and manage your inventory. 

To be more specific, it lets you monitor where each of your inventory items is stored, thus allowing you to fetch it the moment an order arrives in the front office (which is, of course, managed best through an OMS). 

To get a little bit deeper, an Inventory Management Software doesn’t just account for every SKU present, it also accounts for its lifecycle. How long will it be kept in the warehouse? What is its shelf life? Is a particular product(s) ready for shipping? When will the product be fulfilled? The right inventory management system will provide an answer to all those questions. 

The end benefit of this is that it allows you to make better decisions with regards to your inventory. For example, you can get an estimate of what your inventory levels currently are, how many should you ideally have, and when will it be time to replenish them. 

Like the previous section on order management, let’s give you a run-down of the various advantage an effective OMS can bring to the table: 

  • With the right inventory tracking systems present, you can prevent stock outs, which are a bane for the customer and the eCommerce store. 
  • Provides important insights on customer activity for future decision making.
  • Allows you to deliver a better customer experience. 
  • More efficient checks against theft. 

Again, similar to the order management software section, an inventory management software comes in different shapes and sizes. Let’s look the various flavors of these software products: 

Manual Inventory management Systems: This inventory management system helps track inventory through manual spreadsheets. A pretty much obsolete method right now because of its speed and vulnerability to human error. This system is still used by some companies because it’s considered “legacy”.

Inventory management software:  This is a lot more advanced than the previous software since it’s an automation software. Its primary goal is to reduce the time-consuming manual processing of inventory addition, and managing things more effectively through the software. Being easy to implement, it can integrate with your existing technology stacks with relative ease. 

While this does make the inventory management experience easier, it also gets a bit complicated. Some software products are easy to get your head around to, especially if the organization is implementing it for the very first time. Training programs work best in this regard. 

3. Warehouse Management Systems (WMS)

Warehouse Management Systems

Most people tend to consider warehouse management systems and inventory management systems one and the same. 

While they do look rather similar to one another, there are clear differences between these two software application types. 

The first one amongst them being the fact that WMS software is exclusive to only warehouse operations. 

Warehouse operations include inventory management, picking processing, locations, reporting, and auditing of the warehouse. From this, you can see that an IMS is focused on only one aspect of the warehouse operations rather than the entire warehouse itself. 

The end goal of a WMS is to ensure that all the processes are automated and accounted for. 

WMS also aids in the shipping process, ensuring that the bundling and packaging of the items is constantly in check.  

Let’s look at some of the benefits a WMS can provide to your business operations:

  • It helps manage returns in an effective manner, ensuring an adequate balance of inventory for your business. 
  • It speeds up the warehouse logistical process. When the processes are faster, so are the delivery of the products. 
  • Integrates with your existing technologies, which results in a fast-paced operation system. 
  • Allows you to organize your warehouse space in an effective manner, thus resulting in improved efficiency in operations. 

Now, modern inventory systems package warehouse management as a part of their software. While that is indeed effective, they don’t explore the breadth of warehouse operations. 

This results in a process that might be efficient with inventory management, but not too effective with warehouse operations. 

4. Enterprise Resource Planning (ERP)

The final piece of the back office quadrilogy is Enterprise Resource Planning (ERP) systems. They also happen to be one of the most common systems used in organizations today. 

There is a reason for their fame. 

In a nutshell, an ERP system includes all of the software systems we’ve already discussed in this post. 

It’s for this very reason why they’re called business management systems, because they come equipped with all the business automation software that led to efficient operations, whether front-office or back office. 

Now, you won’t find all the functionalities in a single ERP system. For example, one ERP software might provide you with all these systems, including the ones that you don’t need. 

At the same time, there is also ERP software that lets you choose which additional software you want to install on your store. 

ERP systems are a must-have for any business looking to scale and expand its business processes. 

However, there are considerations to take in before you select a platform. Let’s analyze them by asking questions: 

  • How well will this ERP system integrate with my present software? 
  • How well does it automate repetitive business functions? 
  • How good is the storage? Does it require me to create databases and storage options or is it stored in the cloud? 
  • Is it a product that’s scalable enough for my business process? Does it have the necessary stability for business expansion?
  • How much are the investments and risks associated with the ERP implementation? 
  • How much training will it require to make employees knowledgeable? 

These are just the general questions. You can create even more questions based on your business requirements and niche. 

Key Takeaway: Automating Your Back-Office ECommerce Operations

Whatever combination of back-office automation software systems you implement in your store, it’s best to look into automation as quickly as possible. 

The digital landscape is moving at a rapid speed with innovations like AI being used for data analysis and more. To be a part of the race, you need to invest in these software systems. 

We’re telling you this because it’s to your advantage to do so. 

With the proper software, you can focus on selling more and managing things less since most of the workflows will be automated. The less time wasted on repetitive tasks, the better. B2BWoo is a complete B2B eCommerce platform built on WooCommerce that lets you create a complete B2B system on your WooCommerce store. With all the essential B2B features integrated with the platform, B2BWoo is an ideal choice for all types of businesses looking to get started with eCommerce. 

Technical writer by day, focusing on all things WordPress, programming, and B2B eCommerce. On the down-low, I like to read historical non-fiction or watch movies, depending on my mood.

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