What Is An Order Management System?
In one sentence, an Order Management System (OMS) is an advanced, scalable, software solution designed to streamline the order management process and fulfilment from start to finish, across all sales channels on a single platform. It is used to improve efficiency, save costs, and deliver superior customer satisfaction.
With an estimated 2.7 billion shoppers online worldwide, OMS has become a crucial order management system tool, in both e-commerce and traditional businesses, that automatically captures all the data necessary to provide a holistic real-time overview, seamlessly track and manage order fulfilment, update inventory, and handle post-purchase customer communication.
There are different OMS options, from manually operated standalone systems to sophisticated, fully automated systems that secure your data, synchronise all your sales processes and fully integrate with all your other management systems, to all but eliminate human error.
ProSKU is a state-of-the-art WMS with advanced OMS features. Contact us for a demo or expert advice. Call us on 0800 170 1161, or email info@prosku.com or www.prosku.com/contact-us/
What are the key features of an order management system?
The most important function of an OMS is to help businesses configure their systems and processes in a way that maximises inventory accuracy, receiving, locations, tracking, orders, and deliveries.
The key features include the following:
- Real-time visibility of available inventory stored or ordered from multiple warehouses, stores, and suppliers.
- It captures and validates all data relating to orders from diverse sales channels, to ensure order accuracy and completeness.
- Automated pick, pack, and shipping functionality and generated documents and reports.
- The OMS integrates the platforms of all the sales channels along the supply chain, allowing businesses to engage in multi-channel buying and selling, monitored and controlled on a single system.
- Real-time inventory visibility is a crucial feature of an OMS to facilitate informed management decisions and ensure accurate ordering across all sales channels.
- Automated client communication, confirming orders, issuing invoices and receipts, creating shipping labels supplying delivery details, and providing updated tracking information.
- Warehouses can utilise AI to intelligently assign orders to the fulfilment centres best suited to meet particular orders or parts of orders.
- Automating and streamlining end-to-end fulfilment implementation and inventory tracking process.
- Managing entire fulfilment process reverse logistics, including returns, exchanges, replacements, refunds, repairs, recycling, and disposal.
Which processes can be controlled by an OMS?
Order entry:
Capturing and validating a customer’s personal, order, and payment details in the sales order management system works well. It then confirms the order and issues invoices and other documentation.
Inventory management:
It helps you manage and track orders; allocate inventory to the order; issue instructions to pick, pack and ship items; track order status and fulfilment; and automatically update inventory.
It assists you in forecasting market trends and inventory requirements to prevent under or over-stocking.
Fulfilment:
Automated processes, aiming to deliver the right products to the right customers at the right time. This includes receiving, storing, processing, and delivering orders without errors and in the most cost-effective way.
Customer service:
OMS can automate post-purchase customer service inquiries, address complaints, offer technical guidance, provide help with maintenance or return issues, maintain customer loyalty programmes, write personalised thank-you notes, and direct queries to real-life assistants.
Returns and exchanges:
OMS can also manage reverse logistics, by coordinating returns and exchanges, repairs, replacements, refunds, recycling, and disposal.
Why is a reliable OMS important in modern e-commerce?
E-commerce is arguably the fastest-evolving industry of the 21st century. Escalating volumes, rising consumer expectations, a multitude of sales channels, and intense competition have changed the face of consumerism and present immense challenges to all online businesses.
In a complete paradigm shift, retailers, wholesalers and warehouses are increasingly expanding their markets by introducing online shopping, thereby boosting worldwide e-commerce exponentially to an estimated £4900 billion in 2024 and rising to almost £ 6500 in 2025, according to SellersCommerce, who asserts that more than a third of the world’s population already shop online.
According to research by PricewaterhouseCoopers and Digital Commerce 360, quick delivery times, fulfilment options, and in-stock items are the greatest determinants in customers’ purchasing decisions. Research has also shown that there is still a huge chasm between promises and fulfilment, leading to customer frustration and lost business opportunities.
The right OMS can bridge this gap and elevate customer experiences and prompt fulfilment by a significant margin, streamlining the order fulfilment process, enhancing speed and efficiency, and reducing costs.
The most advanced order management systems accurately and efficiently connect all the front-end and back-end fulfilment processes and manage them across diverse and complex fulfilment networks of supply chain partners, warehouses, distribution centres, retailers, wholesalers, and manufacturers.
What are the main benefits of an order management system?
Better inventory visibility
A key benefit of OMS software is the ability to know exactly how much inventory is on hand, how much is needed, and exactly where the inventory item is, at any given moment.
This empowers you to make wise business decisions, accurately forecast demand, and effectively plan procurement to avoid running out of stock and eliminate overstocking.
Enhanced order management
Technology has empowered shoppers to E-commerce customers to quickly and easily find the products they want at the best price and are given an enormous choice of value, quality and affordability. Therefore, they have come to set very high expectations of their online shopping experiences, the most important of which include omnichannel capability, transparency and rapid access to all information regarding product features and delivery costs, seamless simple checkouts, personalised interaction, and prompt fulfilment and delivery.
Such exceptional customer experiences are only possible if you connect with your consumers through a sophisticated OMS system that offers personalised options, streamlined order fulfilment, and prompt delivery.
Value-added technology and automation
As order volumes and the scale of your business surge, human error can quickly spiral and scuttle your success. Most of these errors and concomitant costs can be eliminated by automating certain functions through OMS software. Not only does it eliminate errors, it frees valuable resources to focus on what they do best.
Here is a list of how just some of the automated processes can drastically improve efficiency and eliminate errors:
Order processing, from data capturing to tracking and delivery, even when staff are not present.
Inventory management and real-time tracking from procurement through storage, sales, picking and packing, to shipment and delivery.
Algorithms to evaluate customer orders for accurate fulfilment and prompt delivery.
Analysing sales trends and customer behaviour to inform future decisions and improve operational efficiency. Advanced reports can automatically be generated to evaluate and improve systems and procedures.
Generating and tracking documents such as invoices, receipts, account integration, customer communication, and customer relationship management.
Automated barcode scanning, picking, packing, and shipping are just some of the automated technology solutions to augment your OMS.
Valuable inventory and marketing insights
We live in an era where instant access to accurate and up-to-date data drives strategic business decisions and the ultimate success of businesses.
Advanced OMS software helps you efficiently navigate the following steps to understand your customers’ needs:
Define your objectives to fully understand the company’s vision and goals.
Gather, analyse, and interpret data from various sources to generate valuable insights into demographics and current market trends; competitors; sales patterns; and customer expectations and behaviour.
This information helps you create marketing strategies, sales campaigns, promotions, processes, and content to improve customer experiences; and monitor the success of these responses.
Heightened customer satisfaction
OMS software streamlines order fulfilment so you can provide accurate and complete product information, faster fulfilment, better tracking, speedy updates, friendly communication, and cheaper shipping and delivery.
Business growth
According to industry reports, 70% of online shopping carts are abandoned without making any purchases because of unexpected (hidden) costs, complex checkout procedures, lack of information and transparency, security concerns, lack of device compatibility, and poor website performance.
Added to that, statistics show that between 20% and 30% of purchases are cancelled or returned because of sizing issues, incorrect items provided, wrong purchases, inaccurate product descriptions, slow fulfilment or delivery times, and failure to meet the customer’s expectations.
The result is billions in lost sales every year after the customer has indicated an intent to purchase, or has already purchased, items.
Transparency and implementing the right OMS can avoid many of these disasters, leading to improved shopping experiences, retained sales, greater customer satisfaction, brand loyalty, and repeat business. An advanced OMS drastically increases digital conversion rates and sales by improving inventory visibility and providing delivery dates during ordering.
Reduced Business Costs
The right OMS optimises capabilities and helps you find ways to fulfil orders and process returns more economically.
It facilitates cost-effective customer support strategies, like digital self-service.
It enhances your fulfilment flexibility and techniques to meet customer needs and expand business models, more profitably.
It allows businesses to quickly and easily scale their capacity to benefit from cyclical demands without additional or long-term expenses.
By improving efficiency, reducing errors, and decreasing returns an OMS radically reduces costs.
Automating time-consuming repetitive tasks reduces the number of staff that need to be employed.
An OMS improves inventory control to eliminate losses, stockouts, and excess inventory. Accurate inventory control and full visibility of inventory levels also prevent overselling that results in losses because customers cancel orders due to item unavailability.
How does an OMS help brick-and-mortar stores?
A good OMS makes it much easier to monitor, track and control order processing and stock availability.
Inventory from different locations can be effectively tracked and managed and the most cost-effective routes can be planned.
Order fulfilment and deliveries can be planned better along the entire business process, automating certain procedures such as generating invoices and receipts, issuing efficient picking and packing instructions, and scheduling the most economical deliveries according to cities, addresses, distances, or routes. The OMS helps retailers monitor and evaluate the performance of 3PL partners and how it impacts the business.
It optimises storage space, helps retailers plan store and shelving layouts according to customer behaviour, can automatically update all price adjustments, and automatically print new labels for them.
The OMS gives retailers market insights into hot-selling products, marketing and shopping trends, and procurement forecasts.
How does an OMS help logistics companies?
An OMS that synchronises with suppliers, warehouses, retail and e-commerce businesses, aids logistics managers in picking, labelling, packing, shipping, and delivering orders in the quickest possible time and automatically sends tracking information up or down the supply chain.
A good OMS allows logistics partners to book orders through multiple couriers, according to location and delivery routes.
Logistics managers can easily and effectively track the movement of orders throughout the entire lifecycle of the purchases, identifying glitches and areas of improvement. Detailed reports can be analysed and printed to ensure the most effective logistics support is given to client businesses.
Factors to consider when assessing OMS software
Make sure it meets your business requirements. The selection of the right OMS for your business can be overwhelming. The following factors will help you make the right choice:
Type and size of business
There are OMS software solutions best suited to different industries, small businesses, warehouses, retailers, wholesalers, e-commerce, and mega businesses. Make sure you obtain the OMS that meets the goals and requirements of your business and which will help your business grow. Make sure you can scale up your OMS as your business grows.
Scalability
Business cycles vary according to seasons, major events, regional demands, fashions and fads, new inventions or upgrades of products, and so forth. It would be a waste to acquire all the resources needed for peak sales which only last for a few months of the year.
A good OMS will allow you to scale and pay for the features as you need them.
Customised business rules
Not all rules, policies, and processes apply to all customers. Different algorithms for step-by-step actions according to customised business rules, are required for cross-border sales; coping with import regulations, duties and taxes, specialist industry regulations, time zones, drop shipping amount, location, type of shipping, etc. Ensure the order management system and business rules provide the required variations and can deliver a seamless experience throughout the fulfilment process.
Flexibility
This is of particular importance for multichannel orders or sales, a large variety of products or items, international or cross-border sales, and a growing business.
Integration with other software systems
Ensure the application programming interface (API) of your OMS software allows different applications to integrate and communicate with each other. This is of great importance if you are using different software solutions for financial systems, accounting, enterprise resource planning and management, warehouse management, automated technology, and data security. It is also important to exchange information with supply chain partners and 3PL providers.
Useful insights
The success of any business depends on the quality of informed management decisions at the right time. Your OMS should provide you with useful information, analytical reports, and data-driven forecasting capability about the performance of sales channels and products, customer demographics, overall business efficiency and performance, staff performance, and profitability.
Do not skimp on customer experience
Ultimately, business hinges on the customer’s shopping experience and satisfaction. Customers expect a seamless process without glitches and nasty surprises.
They want full transparency of costs and product performance, accurate item descriptions, simple checkout and payment options, and clarity on when to expect delivery.
Once they have made a purchase, they want prompt confirmation, up-to-date tracking information, and follow-up communication. If they are not satisfied with any part of the purchase or service, statistics indicate that customers will return the goods painlessly.
With the order volumes businesses handle, it is an impossible task to perform all these chores manually. A good Order management system will ensure a smooth and pleasant customer experience and raise the likelihood of brand loyalty and return business.
Versatility
Additional multichannel collection functions such as dropshipping, buy online- pick up in-store, and kerbside pickup, will enhance your service offering and open new vistas and attract a wider range of client groups.
Managing a complex supply chain
Order solutions can integrate with multiple 3PL providers, warehouses, suppliers, and value-added services to improve order fulfilment and deliveries.
Multichannel order processing
Each sales channel requires different processes and backend systems. A good order management system integrates omnichannel order management and selling to effectively manage diverse order processing.
Automation
An OMS can coordinate and control several automated workflows and processes to speed up the order fulfilment process and fulfilment, improve efficiency, and reduce errors and costs.
Backorder capabilities
Running out of stock is one of a business’ headaches but when it does happen, customers may place backorders to receive the item as soon as it is back in stock.
The OMS will allow the business to capture sales that might otherwise be lost.
Just as important, is the capability to pre-order products intended for promotions or launches.
The main types of order management systems
In the complex and highly-competitive world of e-commerce, not even the smallest business, hoping to grow, can still afford to record all data manually on ledgers or computer spreadsheets. It is too time-consuming and prone to errors to be efficient and profitable.
A large variety of OMS software solutions are available at affordable prices to enhance your business efficiency and eliminate errors. As stated earlier, it is vitally important to select the OMS software solution that matches your needs and requirements.
Here is a list of the main types of OMS software:
Warehouse management system with OMS features
A WMS with built-in, order management software features fully integrates with diverse e-commerce platforms and other software solutions. Make sure the OMS features of the WMS meet all the requirements of your business.
By integrating WMS and OMS, a business can synchronise and streamline its processes. WMS manages the complex warehouse processes and inventory planning and management, with OMS taking care of the order lifecycle.
Whether you are an e-commerce business, manufacturer, warehouse operation, wholesaler, retailer, distribution centre, or fulfilment centre, Cloud-based ProSKU WMS with the most advanced OMS features offers a single, powerful integrated solution to manage your entire warehouse, inventory, and order management system.
ProSKU’s advanced features make order processing easy with automated fulfilment options, flexible data capture fields, one-click pre-process checks to ensure stock availability, ERP platform integrator, a multichannel sales integrator and automatic API integration or CSV upload, functions for call-offs and balance adjustments, detailed order reporting and history functions, automated filtering and scheduling of orders, variable order picking strategies according to customer delivery preferences, rotation overrides for unique stock selection, creation of back orders, and seamless integration with other leading e-commerce platforms and carrier solutions.
Retail fulfilment suites
Depending on your requirements, you can fully integrate the retail fulfilment suite as part of the supply chain management, order management solutions, warehouse management, transportation management system, ERP, or as a standalone unit.
Bundled OMS
This type of OMS module is “bolted” onto your existing WMS, ERP, or POS. The benefits include quick integration and single billing. However, they may not be as robust and powerful as a custom-designed OMS, with dedicated functionalities.
Configurable and scalable OMS
Dedicated multichannel OMS, customised to your requirements and configurable for future developments and business evolution will continue to serve your business interests well into the future.
Distributed order management
A distributed order management system manages the entire full order fulfilment lifecycle according to rule-based processes and procedures to enhance efficiency, automate processes to reduce fulfilment lead times, reduce errors and losses, enhance customer satisfaction, and minimise operational costs.
Get in touch
Contact us for expert advice, a demo, or an introductory chat. You can call us on 0800 170 1161 or book a demo here: https://www.prosku.com/contact-us/
