ERP & S/4HANA

Order Management with SAP - A Short Guide to SAP OMF

19. December 2023

9 Minutes

Introduction

SAP Order Management Foundation: What the new order management solution can do

SAP is strategically pivoting towards cloud-centric solutions, aiming to provide more scalable, agile, and flexible service offerings. This transition reflects a broader industry trend, emphasizing the importance of accessibility, innovation, and real-time data processing in the cloud. By doing so, SAP is positioning itself to meet the evolving demands of businesses seeking to leverage the power of cloud technology for enhanced operational efficiency and growth. SAP started reimplementing several core products like SAP CAR Omnichannel Article Availability, and SAP CAR POS-DTA and started implementing new features in their cloud products only, starting to abandon several on-premises solutions. One of these new cloud-native solutions is SAP Order Management Foundation, aka SAP OMF. SAP OMF runs on the SAP Business Technology Platform using cloud-native technologies.

Read the blog to find out more about what SAP OMF is all about and how you can use it in order management

SAP OMF

KPS has successfully concluded a project that integrates SAP OMF into the order processing sequence. The system went live several weeks ago and is now efficiently handling approximately 6,500 orders on a daily basis. It’s important to note that SAP OMF, which is an acronym for SAP Order Management Foundation, is often misunderstood; it is not a comprehensive order management software but rather serves as the underlying layer that supports such systems. So, what is not included in SAP OMF?

Understanding What SAP OMF Isn't

Understanding What SAP OMF Isn’t

Discussing the exclusions within SAP OMF is crucial for clarity. SAP OMF does not encompass order sourcing, nor does it handle real-time stock availability or compute POS transaction calculations, for that matter. It also does not provide the option to change the sales order. It also does not act as a customer service centre front end. These functionalities are currently being segmented and refined into various cloud-based products under development by SAP. Historically, such features were managed within different modules of SAP CAR, specifically POS-DTA and OAA. Advanced custom order sourcing was typically tailor-made within ERP or CRM systems at numerous client sites, while fundamental order management was conducted within SAP ERP or S/4HANA.

Order manipulation and customer facing activities are done in the new CX tools of SAP. To grasp the role of SAP OMF, we’ll narrow our attention to SAP OMSA and SAP OSTA, examining what features they deliver.

Features of SAP OMSA and SAP OSTA

Features of SAP OMSA and SAP OSTA

Features of SAP Order Management Foundation

Features of SAP Order Management Foundation

What are the typical drivers for SAP OMF?

What are the typical drivers for SAP OMF?

  1. When a client has intricate order management processes that involve multiple sales channels, third-party vendors or needs to manage orders across different geographies and systems.
  2. When a client’s business grows and the volume of orders increases, SAP OMF provides the necessary scalability to handle large numbers of transactions efficiently.
  3. When businesses that fulfil orders from various sources, including their own inventory, third-party vendors, or drop-shippers, can benefit from the streamlined process SAP OMF offers.
  4. When improving customer service is a priority, especially in providing accurate and timely order status updates, SAP OMF’s centralized system is invaluable.
  5. When organisations are looking to simplify their order management processes, reduce manual interventions, and minimize errors.

The Role of SAP OMF

The Role of SAP OMF

SAP OMF acts as the authoritative hub for all sales order information. It accepts sales orders from a variety of sales channels, dividing them as necessary into individual sales orders tailored for specific fulfilment systems. Whenever there is a need to retrieve the status of an order—for instance, when a customer checks their order’s progress in the webshop—SAP OMF’s API is capable of providing comprehensive details and updates on the various segments of the order, regardless of which fulfilment system is handling them.

The image presents a simplified depiction of SAP OMF’s placement within a typical IT landscape driven by SAP solutions:

What existing SAP solutions does it replace?

What existing SAP solutions does it replace?

The Business Value of SAP Order Management Foundation

The value of SAP Order Management Foundation (OMF) lies in its ability to streamline and optimize order management processes, offering several key benefits:

  1. Centralised Order Management: SAP OMF serves as a single point of truth for all sales orders across various channels, simplifying management and tracking.
  2. Enhanced Customer Experience: By providing accurate and timely updates on order status, SAP OMF improves transparency and communication with customers, leading to increased satisfaction and trust.
  3. Efficiency in Order Processing: The system’s ability to split and route orders to appropriate fulfilment systems reduces manual intervention, speeding up the order-to-cash cycle.
  4. Flexibility and Scalability: SAP OMF is designed to accommodate different types of order processes and can scale to meet the growing demands of a business.
  5. Integration with Multiple Systems: It seamlessly integrates with various sales channels and fulfilment systems, ensuring smooth operation across diverse business models.
  6. Data Accuracy and Reduced Errors: By automating order splitting and routing, SAP OMF minimizes human errors, ensuring higher accuracy in order processing.
  7. Improved Decision Making: The aggregated data and insights provided by SAP OMF help in making informed decisions regarding inventory management, logistics, and customer service strategies.
  8. Cost Reduction: Streamlined processes lead to reduced operational costs, as less time and resources are required to manage orders.

Lessons Learned

Lessons Learned

  1. Unlike SAP S/4HANA’s transaction SPRO for customisation, SAP OMF relies solely on API for configuration, emphasising SAP’s ‘API first’ strategy.
  2. New features in SAP OMF are rolled out regularly and incrementally, often enabled through feature toggles.
  3. The integration content is specifically designed for S/4HANA and does not standardly support SAP ERP.
  4. SAP OMF employs a streamlined data structure for articles, orders, and order activities, distinct from the S/4HANA standard master data model.
  5. Certain inherent limitations in SAP OMF, like the number of order items, require direct engagement with SAP for resolution.
  6. SAP actively adjusts its roadmap and feature priorities based on customer input and feedback.
  7. While SAP BTP supports various authentication mechanisms, some, like those for Google Cloud Functions, may need workarounds.
  8. SAP OMF is poised to be a core component in SAP’s retail suite, particularly with its integration into SAP OMSA and SAP OSTA, though it’s still under active development.
  9. SAP OMF demonstrates remarkable efficiency, scaling up to handle thousands of orders hourly.
  10. The SAP Industry Cloud, like other cloud platforms, is not immune to downtime, highlighting the need for a resilient IT architecture. Yes – SAP BTP did go down.
  11. It’s crucial to anticipate and prepare your IT architecture for potential instabilities across all cloud platforms (not only SAP OMF running on SAP BTP, but AWS, GCP and Azure as well), including temporary service interruptions or duplicate message deliveries.

What's missing at the point of writing?

What’s missing at the point of writing?

  1. SAP OMF does not allow changes to orders – not manually and not via API. Any modifications are only recorded as order activities, without actual adjustments in total quantities or prices, as total recalculation of the order is not possible.
  2. The system currently lacks the capability to process order returns.
  3. There is no feature to turn off article validation for order items in SAP OMF.
  4. There’s a strict limit on the number of order items, which requires adjustment for greater flexibility.
  5. There’s a need for more adaptable order status aggregation methods in SAP OMF.

Conclusion

Conclusion

SAP OMF is an innovative cloud-native solution that enables businesses to optimise their order management processes. If you’re looking to streamline your processes, require a centralised approach across various systems, and aim to enhance the overall customer experience, SAP OMF is a highly recommended choice. Especially considering SAP’s strategic focus on future developments in the cloud.

If you’re ready to embark on your journey to the cloud and need assistance, as the transition from on-premises to cloud is more of a technical transformation than a change in business processes, we are here to support you.

Let’s discuss your specific requirements and needs to ensure a seamless and effective transition for all cloud-native SAP solutions, such as SAP OSTA, SAP OMSA, and SAP OMF.

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