Order Management System Buying Guide

An OMS provides real-time visibility into available inventory across multiple warehouses, stores, and suppliers, ensuring accurate inventory tracking.

The OMS captures and validates orders from various sales channels, ensuring order accuracy and completeness.

With pick, pack, and ship functionality, the OMS streamlines the fulfillment process, including support for drop-shipping and generating shipment confirmations.

An OMS integrates with online sales channels, allowing businesses to engage in multi-channel selling. Whether you have brick-and-mortar stores or an e-commerce presence, your OMS needs to seamlessly integrate with Point of Sale (POS) systems and payment gateways. This integration ensures smooth and secure payment processing, inventory synchronization, and accurate data synchronization with financial systems.

By enabling seamless integration across various platforms, an OMS centralizes and harmonizes data, providing businesses with a unified view of their operations. This integration capability facilitates efficient order management and enhances customer experiences across all sales channels. In a nutshell, an OMS seamlessly integrates with e-commerce platforms, marketplaces, shipping carriers, and accounting software, creating a unified ecosystem.

One essential feature of an Order Management System (OMS) is the ability to reserve goods. With this feature, businesses can allocate inventory for specific orders or customers, ensuring that the requested items are set aside and not available for sale to other customers.

An advanced feature offered by an Order Management System (OMS) is the ability to update shipping preferences. This feature empowers businesses to customize and optimize their shipping processes according to their specific needs. With the OMS, businesses can easily manage and modify shipping preferences such as preferred carriers, shipping rates, and insurance options. This flexibility allows businesses to choose the most cost-effective and efficient shipping methods for different orders and destinations.

A comprehensive feature offered by an Order Management System (OMS) is the ability to track orders throughout the entire order lifecycle, from quotes to pickup, invoicing, and delivery. The OMS enables businesses to create and track quotes, converting them into orders seamlessly. It tracks the order fulfillment process, including inventory allocation, picking, packing, and shipping. The OMS also generates and manages invoices, ensuring accurate billing and timely payment processing. Furthermore, businesses can track the status of each order, monitor shipment progress, and provide customers with real-time updates.

The OMS establishes rules for processing returns, facilitating exchange requests, crediting customer accounts, and managing the dispositioning process.

A robust OMS provides comprehensive reporting and analytics, offering insights into order and inventory performance, enabling data-driven decision-making.

Tracking and monitoring orders is perhaps the most fundamental aspect of any OMS. Once an e-commerce brand grows beyond the smallest size, it needs some kind of system to handle orders. Even the most proficient, on-the-ball worker can’t keep all order details in their head.

At heart, an OMS is about making life easier for both a brand and its customers. The correct system can create a more seamless customer experience. It can also make inventory management, logistics, and more processes far more intuitive. In order to do so, such a system must do all of the following:

An order management system becomes even more vital for firms that sell via many channels. The best OMS will track and record orders through your webstore, marketplaces, and other platforms. Centralizing and unifying sales in that way can make a real difference to efficiency and productivity, as well as eliminate errors.

It’s not all about digital channels, either. An OMS will also record and handle orders placed over the phone or in-store if you have such a presence. All details of all orders, therefore, become available in one place. You and your staff can check order statuses, make relevant changes, or reach out to customers with greater ease.

The placement and handling of orders impact many other elements of your business. Every order placed and fulfilled, for instance, affects your inventory. Getting inventory management correct is vital for any e-commerce brand.

If you don’t have an accurate measure of your inventory, a range of issues can arise:

• Overselling – Accepting orders for products of which you don’t have adequate stock to fulfill. Doing so leads to canceling those orders and disappointing customers.
• Overstocking – Thinking you’re short of a product and over-ordering replacement inventory. This means you waste valuable warehouse space and could get left with dead stock.
• Inaccurate Forecasting – If you don’t have accurate inventory figures, it’s harder to understand customer demand. You may miss when there’s an uptick in desire for a particular product. That could see you run out of stock when you might have pre-empted the increased demand.

An order management system will simplify the inventory tracking process. The best software will update your inventory levels in real-time. That means they change with every order that’s placed. That’s regardless of the channel by which the purchase gets made.

So far, your OMS has recorded the orders placed and helped you track the inventory required for them. There’s more to e-commerce operations than that, however. Namely, you also must get the ordered products to your customers. An OMS helps in this regard, too.

The best order management system will streamline many logistics processes. Those can include routing orders to the right warehouse, auto printing shipping labels, and much more. Such efficiencies can make a real difference to your warehouse management and overall productivity.

Having the correct OMS in place is especially helpful for firms that use 3rd-party logistics (3PL) providers. If your OMS integrates with a 3PL’s system, order fulfillment is faster and more intuitive. It makes life easier for your firm and the provider you’re working with. That’s a win-win, or a win-win-win when you consider the benefits delivered to customers.

All e-commerce businesses know that returns are an inevitability. Approximately 30% of products bought online get returned. That’s as compared to less than 10% bought in-store. Handling returned items and dealing with the customers who sent them back is vital to order management.

With the right OMS, reverse logistics becomes much more straightforward. A top-class system gives you many options in this regard. You may, for instance, be able to clone an original order to create a credit instantly. That makes it more straightforward to manage refunds, replacements, or reorders.

An OMS, too, makes it more intuitive to fold reverse logistics into inventory management. Depending on what’s returned, the system can give you various options. It may write off stock that’s sent back, quarantine it, or add it back to your inventory on-hand.

For optimal efficiency and customer service, it’s crucial that your OMS integrates with other essential areas of your business, such as online and offline sales channels, finance management, CRM, and supply chain. Seamless integration enables data synchronization, streamlines workflows, and avoids data silos.

A user-friendly interface with clear and concise information is vital for OMS usability. Ensure that the OMS provides key features like inventory monitoring, returns processing, fulfillment automation and advanced reporting with easily understandable dashboards. Look for additional functionalities such as POS integration, robust customer support, and the ability to prioritize orders for shipping or in-store pickup.

Customization is crucial to tailor the OMS to your specific business needs. Choose a platform that allows you to customize data access, reports, and other information. This ensures data security while empowering employees at different stages of the customer lifecycle to perform their tasks effectively.

As businesses grow and experience increased order volumes, the OMS may face challenges in efficiently handling large quantities of orders. The OMS must be equipped to handle simultaneous order processing without performance degradation or system slowdowns.

Some OMS platforms require customized development or extensive configuration to enable workflow automation, which can be time-consuming and costly. Custom development or configuration for automation can result in delays in system implementation, as well as increased costs for hiring developers or consultants. Moreover, the complexity involved may require ongoing support and maintenance, adding to the long-term expenses.

B2B stands for “business to business”, so B2B order management systems refer to software solutions that specifically cater to this kind of commerce.

Whereas B2C (business to consumer) order processing can be relatively straightforward, the B2B order management process is generally more complicated. One reason is that the buying cycle tends to be longer than B2C. On top of this, quantities are larger and different paperwork is involved.

Your B2B order management system needs automation software for each stage of the purchasing and fulfillment processes. The stages in each business transaction are tracked, with the next stage triggered after the previous one is marked complete.

Here is an example of a typical business order cycle:

1. A client places an order directly through your e-commerce platform or a sales representative.
2. The order is received and logged into your OMS.
3. Order confirmation and invoice or alternative payment request are sent to the client.
4. A notification is sent to your warehouse to reserve the products ordered.
5. The inventory is automatically checked and the products are marked for picking and packing.
6. Picking and packing take place.
7. Items are marked for dispatch.
8. Couriers/freight channels are notified of items ready for dispatch.
9. Items are collected and a dispatch notification is sent to the client.
10. Products are delivered and the order is marked as complete.
11. Delivery notification is sent to the client.

To avoid man-made slip-ups that cause delays and order failures, your B2B OMS should include an EDI system. EDI is short for “Electronic Data Interchange;” a software service that digitizes the paper trail for business to business purchases.

Rather than relying on error-prone humans to send out transaction papers on time, the EDI automatically processes the documents involved. Instead of printing out and mailing (or faxing) invoices, the EDI systems of two companies simply connect and send digital copies of these documents as needed.

If you intend to do business with larger corporations, you’ll absolutely need an EDI software system in place because this is the industry standard for enterprise B2B purchasing.

Thankfully, an EDI takes a heap of stress off your plate because of its superior ability to handle POs and customs and inventory documents from one centralized place. More organized document handling means you can look forward to more streamlined B2B order management. Your accountants and operations managers will thank you for the investment.

With a digitized order management process, it stands to reason that all that digital paperwork will need storage somewhere. If you’re operating a smaller business, local storage (i.e., saving files on your office computer) plus backing up on external hard drives works just fine. But such a system won’t scale up all that easily. When warehouses, freight shipping, and back-orders are involved, it’s time to upgrade to a cloud-based solution.

A cloud-based order management system is an OMS backed up to an external cloud-based server. If you’re paying for a cloud OMS here are some benefits you’ll likely enjoy:

• Real-time updates: Clients will receive timely updates on their order status as cloud computing tends to enjoy close to 99.98% uptime.
• Reliable shipping notifications: Cloud computing ensures powerful data processing, meaning less likelihood of delayed notifications.
• Free up staff time: While manual OMS systems require constant updating or maintenance by human staff, cloud systems can execute functions without supervision.
• Subscription payments: Cloud computing tends to run on subscription-based models, meaning your company can choose to invest in more or less service provision as your operations scale.

So, it’s not hard to see why cloud-based order management can lead to improved customer happiness. The key is regular, accurate, and personalized updates, which have become minimum expectations in today’s competitive B2B and B2C markets.

According to recent research, a startling 70% of brands intend to add new sales channels to their portfolios in 2022. More sales channels mean more complexity in order fulfillment logistics and a greater propensity for errors to creep in. When the scope of your operation broadens, accuracy and attention to detail become increasingly important.

A multichannel order management system can solve the complex processing challenges of diverse sales platforms.

Here are some examples of the range of channels consumers purchase through:

• Supermarkets and other bricks-and-mortar locations
• Amazon Marketplace, eBay, and Google Shopping
• Television shopping channels
• Catalogs, newspapers, and magazines
• Facebook, Instagram, and other social networks
• E-commerce sites managed by retailers

With multichannel OMS, you can streamline order processing from several sales channels, both online and offline. It updates your inventory stock levels as soon as orders are placed. An integrated POS system ensures physical purchases feed into e-commerce inventory updates.

If you’ve got software linking all your sales channels to a centralized platform, that’s called an omnichannel order management system.

Whether you’re selling B2B, B2C, or even D2C (direct to consumer), no doubt offering a variety of sales channels increases your competitiveness.

Since the COVID-19 pandemic and the subsequent boom in e-commerce, retailers learned just how crucial digitization of their sales channels was. In fact, multichannel online retailers in the US are expected to grow their revenue by 64% to £575bn by 2023, compared with 2020.

Statistics like that leave no room for doubt about the importance of an OMS, particularly for e-commerce retail. But how do you know exactly which type is best for you? Read on to find out.

Retail Operating System is an advanced and comprehensive alternative to simple order management system, specifically built for retailers and wholesalers.

Ideal for retail, e-commerce, and wholesale businesses, a Retail Operating System goes beyond order management and encompasses a wide range of functionalities and capabilities to streamline and automate various back-office operations. It provides integrated solutions for order and inventory management, warehouse operations, shipping and fulfillment, accounting, purchasing, and more.

With comprehensive features and automation capabilities, a Retail Operating System offers a holistic solution to handle the complexities of retail and wholesale operations, resulting in improved productivity, customer satisfaction, and profitability.

Talk to all stakeholders about implementing a new OMS. That will include:

• Team members
• Suppliers
• Distributors
• Customers

Find out from them what your aim should be in upgrading your system. Doing so will help you ID the functions that are a must to meet your goals and those you can do without.

Creating such a document will help organize your own thoughts. It will also show vendors what you’re asking of them.Use what you learned in step one to draft a comprehensive proposal. It must detail exactly what you need from a new OMS. Incorporate things like order volumes, sales channels, and plans for the future.

Look at the present order management system marketplace. What vendors are out there that may be able to meet your needs? Draw up a shortlist, and then reach out to the best options. Send them the proposal you created and invite them to open a dialogue.

Once you’ve heard back from different vendors, you can compare their offerings. Think about your company’s needs and the functions you decided were essential. Keeping that top of mind should help you choose the best possible OMS option.

Any order management software vendor will want your implementation to succeed. Often, they will provide guidance and assistance throughout the process. It’s in their interest too, after all, for you to get the most from their software. The closer you work with a vendor at the outset, the more likely that is.

An order management system (OMS) is a method by which firms handle the process of taking, tracking, and controlling orders. It can refer to any tool, platform, or structure used to manage all the elements of the order process, including sales, inventory, and fulfillment. An OMS is critical for businesses to ensure efficient order processing and customer satisfaction.

There are several examples of order management systems that businesses can choose from based on their specific needs and requirements. Here are some popular order management systems:

a. Brightpearl: Brightpearl is a comprehensive Retail Operating System designed for e-commerce brands, multi-channel retailers and wholesalers. It offers features such as order management, inventory management, inventory forecasting, purchasing, warehouse operations, accounting, and reporting. Brightpearl is known for its scalability, automation capabilities, and robust integrations with various sales channels and marketplaces.

b. Extensiv Order Manager: Previously called Skubana, Extensiv Order Manager is specifically designed for e-commerce order fulfillment. It provides tools to manage inventory, order processing, shipping, and fulfillment. Extensiv Order Manager offers integrations with popular e-commerce platforms.

c. Cin7: Cin7 is an inventory management and order management system suitable for retail, wholesale, and distribution businesses. It offers features like inventory tracking, order processing, fulfillment, and warehouse management. Cin7 provides multi-channel selling capabilities, and integrations with e-commerce platforms and marketplaces.

d. Linnworks: Linnworks is a multi-channel order management system that allows businesses to manage orders, inventory, and shipping across multiple sales channels. It offers features like order processing, inventory management, shipping label generation, and reporting. Linnworks integrates with various e-commerce platforms and marketplaces.

An enterprise resource planning (ERP) system is a comprehensive, integrated solution that can be configured to manage various back-office operations, including supply chain management, accounting, manufacturing, reporting, HR, and more.

In contrast, an order management system (OMS) is specifically designed to handle customer orders within the supply chain. It focuses on order taking, order tracking, order splitting, inventory updates, and shipping.

While an ERP offers more functionality and can be customized to work for any business, it is important to note that ERP customization and deployment can be costly and time-consuming. Additionally, more than 50% of ERP implementations fail to meet expectations.

A good order management system should have several key features and capabilities:

• Seamless integrations with multiple sales channels and marketplaces
• Real-time inventory visibility and management
• Efficient order processing and tracking
• Robust reporting and analytics for insights into sales and inventory performance
• Automation of manual tasks, such as order fulfillment and invoicing
• Integration with shipping carriers for streamlined shipping and tracking
• Scalability to support business growth and increasing order volumes
• Responsive customer support and ongoing system updates

While both order management systems (OMS) and customer relationship management (CRM) systems play a role in managing customer interactions, they serve different purposes.

An OMS focuses specifically on order processing, inventory management, and fulfillment. It tracks orders from placement to delivery and manages the logistical aspects of the supply chain.

On the other hand, a CRM system is designed to manage customer relationships and interactions. It stores customer data, tracks communication, and helps businesses enhance customer engagement and retention.