Outlining the Basics of SAP Order Management Foundation’s Capabilities, Key Concepts and Definitions

In this course, we shall delve into the end-to-end order management process, building on the foundation we established yesterday. This encompasses the overall consumer journey, which involves various purchasing channels such as e-commerce, in-store, and marketplaces. These orders are then captured by the SAP Order Management foundation, which also enriches the order data and monitors the entire consumer journey. The SAP Order Management foundation integrates with SAP S/4HANA for products, SAP Substitution Billing or Services, and third-party systems. This integration facilitates consolidation of all data, providing a seamless touchpoint for order entries until the products are delivered to the customers.

As we commence our session, it's crucial to reflect on the evolution of the consumer journey. Traditionally, shopping entailed physically visiting a store, selecting items, making payments, and transporting the purchases home. This typical retail brick-and-mortar scenario has significantly progressed over time, also impacting order management. Let's delve into how these simple days have transformed.

In today's retail environment, particularly large-scale DIY businesses, customers have more convenient purchasing options. If an item is unavailable or too large to take home, customers can make an in-store payment and arrange for a home delivery of the product.

The progress in commerce has significantly enhanced and simplified the consumer's buying experience. Nowadays, the growing influence of e-commerce enables customers to conveniently make purchases online instead of visiting stores. Coupled with this, the rise of multi-channel, omni-channel retailing, and the concept of an endless aisle, has facilitated a smooth integration of online and traditional retail. This includes the popular 'Buy Online, Pick Up in Store' (BOPUS) strategy which epitomizes the modern consumer behavior and the necessity to adapt to these evolving trends.

In our ongoing technological advancement, we've witnessed an accelerated shift toward more convenient shopping methods. You can now purchase items online and collect them in-person from stores. A recent development, particularly notable during the COVID-19 lockdowns, is the concept of curbside pickup. Retail giants like Walmart adopted this model, where purchased items are directly delivered to your car or trunk. Thereby, saving customers the need to leave their vehicles. This approach has proved popular and efficient during these challenging times.

The changes in consumer behavior over time, specifically in terms of their purchasing experience, have necessitated revisions in our order management flow. The growth of the e-commerce sector has been consistent but was exponentially accelerated by the recent global pandemic, which shifted retail from physical stores to e-commerce and various marketplaces.

To understand this, consider the customer's perspective. They experience a straightforward sequence of actions from selecting products online and placing an order to receiving it. These seemingly simple actions are actually the result of complex implementations and integrations behind the scenes.

In the process, customers choose how they'd like to receive their products - whether picked up in-store or shipped to them. Then, they choose their preferred carrier service and shipping timeframes. Taxes are calculated, and all this information is processed through a payment gateway where they provide their credit card details.

Once the order is placed, it is forwarded to order fulfillment. Here, using SAP S4 as an example, the order is processed, follow-on documents are created, and the order is sent to a warehouse for pick-up and delivery. Every effort is made to ensure customer satisfaction by making sure the product is available for dispatch and reaches the customer on time.

Despite the perceived simplicity from the consumer's perspective, this whole process relies heavily on several integrations, apps, and services. All these factors working in harmony allow for the smooth completion of the customer's purchase journey.

Today, we'll explore the complexities of order management and order distribution procedures. We'll focus on master data, the foundation of any system ranging from e-commerce to fulfilment. Our discussion will spotlight the necessity of accurate product, subscription, and physical data.

The front-end commerce system requires pricing and promotional information to cater to customer needs smoothly, such as displaying available products and facilitating shopping for loyalty customers. Our role involves ensuring system interoperability for tasks like sourcing and availability checks upon a consumer's decision to buy online, pick up in-store or have items shipped home.

Keep in mind that the seemingly simple journey from adding items to a shopping cart through to the final delivery constitutes multi-tier communications across diverse systems. These communications get intricate with the holistic cross-systems view. The responsibility lies on us to expedite these processes ensuring timely product delivery.

Order fulfillment, for example, involves calls to other services such as the carrier service and tax services. Once an order is committed, a subsequent call to sourcing availability is necessary to reserve the items ensuring we're not overselling our inventory.

Payment authorization involves another call to the payment gateway confirmed by the return authorization message. Following this, the commerce system initiates a call to the order fulfillment system. A sales order, then followed by an outbound delivery document in the S4 process, is delivered to the WMS system. This notifies the warehouse associate organizing the shipment for delivery.

The WMS system, meanwhile, alerts the carrier service about the availability of a pick-up order. E-commerce needs to be notified when the product is ready for shipment, so they can, in turn, inform the customer. WMS system updates commerce on the order status.

From the warehouse to the customer, the carrier service makes an update about the picked up and in-transit products back to commerce or the fulfillment system. Consequently, a customer update can be initiated either directly via commerce or through the order fulfillment system. Finally, once delivery is verified, a confirmation is sent from the carrier service to e-commerce or order fulfillment.

We must be alert to the complexity of this manifold process chain, which can expand even more in the face of growing omnichannel commerce.

With the onset of COVID-19, the retail sector, specifically in fashion, has reoriented towards a new commerce platform. Terms such as multi-channel, omnichannel, and remote commerce are becoming prevalent. Notable brands like Nike have transitioned from being traditional wholesale vendors to selling directly to their customers. However, this change has brought about complex issues like order management and delivery delays.

Enter SAP's Order Management Foundation (OMF). OMF can handle orders from a variety of sales channels and marketplaces, systematically collect and synchronize this data, and provide a single, centralized resource for all order-associated information. This process not only accelerates fulfillment but also offers a single point of truth.

All order-related details are processed via OMF, where they are centralized, organized, and dispatched to the suitable fulfillment hubs. This incorporates accepting orders from different channels, including brick and mortar stores, conducting necessary verifications, orchestrating the processing and directing them to accurate fulfillment systems for standard operations.

Once aggregated across the system, you can access this information through an application that exhibits all your orders across all facets of your enterprise. This invaluable data-set lets you gain a comprehensive understanding of your business operations.

In summary, the primary value of SAP's Order Management Foundation (OMf) lies in its ability to collect data. With the surge in e-commerce resulting in the creation of new markets and sales channels, it's crucial to gather all this data. By doing so, we can harmonize and enrich it, improving the overall operations and business understanding.

Our objective is to consolidate all order-related data into a single, centralized repository, which will serve as a reliable 'source of truth'. Furthermore, we aim to provide various users the ability to update this information.

It's important to understand how to manage, update, and track e-commerce orders effectively. Centralizing these tasks using OMF allows efficient adjustments to order quantities or statuses and seamless communication between the systems involved.

For instance, if you receive new information from a carrier about a shipment, you can update this directly onto the OMF. Real-time updates can then be captured and shared with relevant systems using SAP Event Mesh. This captured information can be utilized by various consumers of the service to perform necessary updates on their end.

A common use case is when the shipment status changes, this update could be sent to your e-commerce or email notification system to communicate with customers about their order status, such as a shipment confirmation.

While processing these data, it's essential to conduct basic validation checks, such as ensuring unique customer order IDs. Integration with other sources can also allow us to enrich the order information. For example, we can split orders based on physical products versus substitute products.

Upon completion, the data is monitored and analyzed to gain insights into top products, stores, and channels. This information is invaluable for future planning.

In essence, using these tools and methods provides a unified touchpoint for all order-related data and processes, giving you a comprehensive overview of your workflow and sales data. This completes the first session of our discussion, giving you a high-level understanding of the entire process.