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Order Management Systems

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Buyer's Guide

by Daniel Harris,
Market Research Associate
Last Updated: March 15, 2017

Managing inventory is an important job in any company that sells and ships goods. Making sure orders are accurate and delivered on time is vital to keeping customers happy. Therefore, it’s important to strive for a “perfect order” every time.

That’s where an order management system (OMS) comes in. OMS software gives supply chain managers a bird’s eye view of open orders, available inventory, payment and delivery status and more. Managers can use this information to identify potential problems and optimize processes to keep purchasing and fulfillment running smoothly.

If you’re considering an order management system for your business, this guide is for you. Here’s what we’ll cover:

What Is Order Management Software?
Who Buys Order Management Software?
Common Order Management Functionality
Potential Order Management Software Benefits
Market Trends to Understand

What Is Order Management Software?

Order management software supports order capturing, processing and fulfillment of orders from the point of purchase through payment and delivery.

Businesses that use this type of system have:

  • Access to customer, vendor and purchase order records.
  • A real-time overview of available inventory quantities and locations.
  • The ability to set rules so the system determines the best way to source orders based on inventory location and availability.
Inventory quantities, types and status for Orderhive 

Inventory quantities, types and status for Orderhive


Who Buys Order Management Software?

Retail companies are the primary purchasers of order management systems. Multichannel retail businesses are complex, often dealing with a large number of suppliers, warehouses and fulfillment channels.

Companies in industries that manage supply chain demands also benefit greatly from the added efficiency this type of software brings. These industries can include:

  • Health care
  • Food distribution
  • Manufacturing
  • Transportation

Order management is useful for any size B2C, B2B or wholesale company. This can include anything from small e-commerce companies processing single units at a time to large enterprises filling orders of thousands of units.

Common Order Management Functionality

Order management applications are diverse. Some vendors offer integrated suites with a large number of modules, while others specialize in one or two particular functions. Most, however, include the following core functionalities:

Customer database A customer database is, as the name implies, a database for customer information. At the very least, it will store customer and vendor data, current and past orders, delivery receipts, invoices and payments. The more customizable the system, the more types of data a business can store.
Catalog management Gives managers the tools to import and maintain catalog content. Some products allow suppliers to manage and revise items themselves, so the content is always accurate. Other features may include revision tracking, automatic categorization, taxonomy management and user access/privilege control.
Inventory management Works to manage inventory levels, track shipping costs, identify trends and more. This makes it possible to forecast and optimize inventory planning strategies.
Order fulfillment Order fulfillment and tracking systems track unpaid orders and streamline the entire fulfillment process. Systems use rules and algorithms to review orders and determine the most efficient way to fill them.


Order fulfillment details in Snapfulfil 

Order fulfillment details in Snapfulfil


Potential Order Management Software Benefits

Businesses that choose the right OMS can realize several key benefits. Most commonly, an OMS will help users to:

Speed order processing. With greater visibility of the order-to-delivery cycle, it’s possible to find bottlenecks and improve the process.

Reduce back orders and delays. Since inventory data is always up-to-date, managers can predict shortages and make plans to circumvent them. An OMS also simplifies reordering, so it’s easier to maintain optimal inventory levels.

Improve customer service. Greater overall efficiency and an error-free order-to-delivery cycle naturally leads to more satisfied customers. At the same time, customers can know the availability of items in their order.

Market Trends to Understand

As e-commerce and automation become more important to businesses, be sure to keep these current trends in mind when choosing an OMS:

Businesses are looking for a unified omnichannel management system. A unified omnichannel business management system is capable of managing customer interactions and information, updating warehouse inventory, accessing accounting information, managing the retail order supply chain and much more.

Nowadays, businesses are looking for integrated suites that not only automate the entire order distribution process, but can also help manage in-house inventory, monitor retail point of sale, control warehouse operations and coordinate with logistics providers via a single integrated solution. Such unified offerings help businesses manage multiple operations from a single platform.

Demand for integrated solution increases. Most small and midsize OMS vendors are not capable of providing unified suites that can offer multiple capabilities within a single solution. In such cases, they provide a suitable integration tool or an application programming interface (API) for integrating the solution with other business applications, such as customer relationship management (CRM), enterprise resource planning (ERP), business intelligence and transportation management systems.

Even businesses having separate applications for different operations give preference to solutions that can offer seamless integration with other in-house systems and applications. This kind of an integrated architecture streamlines the flow of information between applications and provides a scalable environment in which new applications can be deployed and connected to the existing network easily.

Many businesses also look for an OMS solution that can integrate with various e-commerce websites, such as Amazon and eBay, for selling products directly through these channels.


Multichannel order processing in ChannelGrabber


Multichannel order processing in ChannelGrabber

Rise in demand for cloud-based offerings. More and more OMS software vendors are upgrading their solutions from on-premise to cloud-based deployment models. In cloud-based deployment, the hardware and supporting infrastructure is hosted on the vendor’s premises, and users access the interface through a web browser via any internet-enabled device. Such a deployment model benefits both software providers and end users in terms of cost, centralized system management, fewer network errors and enhanced solution scalability.

Vendors can also host their applications on third-party cloud service providers, such as Amazon, Microsoft and Google, and further reduce their service prices so end users can manage their orders and inventory at a lower cost. Such a model also saves end users from the trouble of software and hardware installation.

Mobility. Users are giving priority to mobile-friendly solutions that are easy to access on tablets and smartphone devices as well as desktops and laptops. Such mobility enhances users’ productivity in tracking business operations on the go. Most order management solutions come with dedicated mobile apps that are compatible with different mobile operating platforms including Android, iOS and Windows. These apps not only help businesses streamline the entire quote-to-order process but also improve the overall user experience by providing all order-related information on their fingertips.

Big-data analysis. Most businesses are looking for solutions that can analyze the huge chunks of data collected from multiple data points during customer interactions and order delivery. Such analysis helps businesses generate suitable insights regarding demand forecasting, improving forecast accuracy, reducing forecast errors and studying customer behavior. It also helps in order capacity optimization, especially when a business has multiple product offerings.

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