Order Management System: Why Are Businesses So Obsessed with It?

When you get a message saying, “Your order has been shipped,” it feels great to know your purchase is on its way without any trouble. But have you ever thought about how big companies make this process so smooth every time? The answer lies in using advanced Order Management Systems (OMS).

An Order Management System works like the brain of modern businesses. It takes care of tasks like processing orders, managing inventory, shipping, and customer service. By automating these processes, OMS reduces mistakes and speeds up deliveries, keeping customers satisfied.

In this blog, we’ll explore Order Management Systems, their main features, and the benefits they offer. Whether you own a small online shop or a large company, learning about OMS can help you improve your business and stay ahead of the competition.

What Is An Order Management System?

An Order Management System (OMS) is software designed to manage the entire order process. It handles tasks such as placing orders, managing inventory, fulfilling orders, and offering support after sales. It helps businesses and customers track orders, ensuring they are delivered correctly and on time.

Order Management System: Market Size And Stats

Order Management Software Market size was valued at USD 2.95 Billion in 2023 and is projected to reach USD 3.17 Billion by 2030, growing at a CAGR of 5.48 % during the forecast period 2024-2030.

North America has emerged as a dominant region in the order management software market. This is due to its well-established and open market, offering numerous options for suppliers and service providers in the order management sector.

Most providers have a strong local presence, which improves their ability to cater to the growing demand for order management solutions. Industries like eCommerce, retail, and manufacturing have made significant investments in adopting advanced technologies, which is expected to drive further the growth of order management software in this region.

Benefits of Using an Order Management System

1. Increased Efficiency

An Order Management System (OMS) helps you easily manage sales across different channels. It gives you a real-time view of your inventory in various warehouse locations. By automating updates across platforms, it removes the need for guesswork or manual work. This keeps your stock synchronized, so you can avoid overselling and ensure customers never face stockouts.

2. Automation

An Order Management System (OMS) helps automate routine tasks like order routing, inventory management, and shipping. By reducing manual work and improving accuracy, automation allows your business to grow efficiently.

3. Smooth Integration

An Order Management System (OMS) works smoothly with top ecommerce platforms and marketplace partners, making it easy to support your omnichannel sales strategy. This connection helps your business open new sales channels and quickly adjust fulfillment methods.

4. SKU-level Product Management

An Order Management System (OMS) helps your business create a product catalog and manage your SKUs efficiently. It lets you bundle products into kits, set inventory limits, and get real-time updates on stock availability.

5. Shipment Tracking

Products are tracked from the time they are ordered until they arrive at the customer’s doorstep. A set of tools helps your business handle more orders each day while improving order tracking and meeting customer expectations.

6. Simplified Forecasting

An OMS helps optimize stock levels by setting inventory limits, triggering automatic restocking, and offering valuable insights. This system also supports your business in building strong and reliable vendor partnerships.

7. Data-Driven Insights

An OMS gathers sales and inventory data from all your operations. This helps your business save money and boost profits. It also provides customized reports and dashboards that give you a clear view of your performance.

How Does Order Management System Work?

The Order Management System (OMS) plays a pivotal role in ensuring that businesses can effectively process and fulfill orders. Let’s take a closer look at how the order management process of an OMS work:

1.Order Placement:

The process starts when customers place orders through digital channels such as online stores or mobile apps. The OMS functions as a digital control center, capturing and securely storing these orders in a central database.

2. Order Processing:

Once an order is received, the OMS starts working by assigning tasks to prepare the order for shipment. This involves checking inventory availability, choosing the best fulfillment location, and getting the order ready for delivery.

3. Inventory Management:

Real-time inventory management is a key feature of a strong OMS. It keeps inventory levels up to date as orders are processed and shipped, making sure customers always have the products they want in stock and ready to go.

4. Order Fulfillment:

The OMS manages the picking, packing, and shipping of orders accurately and efficiently. It makes sure the right products are chosen, packed properly, and sent to the correct address.

5. Shipping and Tracking:

After packing the order, the OMS generates shipping labels and arranges for a carrier to pick up the packages. Customers get tracking information to follow their orders in real time.

6. Returns and Exchanges:

The OMS manages returns and exchanges smoothly. It quickly processes refunds or replacements and updates inventory levels.

7. Customer Communication:

The OMS keeps customers updated at every stage of the process. It sends order confirmations, shipping alerts, and notifications about any changes, ensuring a clear and satisfying shopping experience.

8. Reporting and Analysis:

Finally, the OMS gives businesses useful insights through detailed reports and analytics. This information helps businesses streamline their operations, enhance customer satisfaction, and foster growth.

Top Features Of an effective Order Management System

Choosing the right Order Management System is a necessary decision that can impact every aspect of your business. Here are key features you must consider before choosing one:

1. Centralized Order Management

A key feature of a strong Order Management System (OMS) is the ability to centralize order management. This means all your orders from different sales channels, such as your online store, Amazon, eBay, or in-store purchases, are gathered in one easy-to-use platform.

This makes tracking simpler, reduces the chance of mistakes, and ensures your customers get their orders quickly and accurately.

2. Real-Time Inventory Management

Inventory management is crucial for your business’s success. With the OMS feature that tracks inventory in real-time, you can easily monitor stock levels across different locations, avoiding stockouts or overselling.

Automated updates of inventory as orders are placed, fulfilled, or returned help keep stock levels accurate. This ensures you can make informed decisions about purchasing and sales.

3. Multi-Channel Integration

Integration is essential in the multi-channel retail industry. A good order management system (OMS) should easily connect with different eCommerce platforms like Shopify, WooCommerce, and Magento, as well as marketplaces like Amazon and eBay.

This feature helps synchronize your inventory, orders, and customer data across all channels, giving you a complete view of your business operations.

4. Order Processing and Fulfillment

Efficient order processing and fulfillment are key to keeping customers satisfied. Choose an OMS with an automated order routing feature that sends orders to the right warehouse or fulfillment center based on location and stock availability.

Also, simplifying the pick, pack, and ship processes can speed up order fulfillment, helping customers get their products faster.

5. Customer Management

Customer satisfaction is important. An OMS should help you keep detailed customer profiles, including their order history and preferences. Connecting with customer relationship management (CRM) systems can enhance your ability to offer personalized service, turning one-time buyers into loyal customers.

6. Flexible Payment Processing

Offering a variety of payment options is important to meet customer preferences. Make sure your OMS supports different payment methods, such as credit cards, PayPal, and digital wallets. Integrating multiple payment gateways can also simplify the payment process, making it easier for customers to finish their purchases.

7. Returns Management

Returns are a natural part of retail, but they don’t need to be a hassle. A good Order Management System (OMS) should make the returns process easy by offering clear instructions for customers and allowing easy tracking of return statuses. Managing returns efficiently helps keep customers happy, even when things don’t go as expected.

8. Shipping Management

Shipping can be complicated, but an advanced Order Management System (OMS) can make it easier. Look for features like real-time shipping rate calculations, connections with major carriers like UPS, FedEx, and DHL, and the ability to create shipping labels directly from the system. These features help save time and reduce shipping mistakes.

9. In-depth analytics and Reporting

Knowledge is power. An OMS with strong analytics and reporting tools can give you useful information about your sales, inventory, and customer behavior. Use this data to make informed decisions, improve your operations, and find new opportunities for growth.

10. Security and Compliance

Protecting customer data and following regulations is a must. A key feature of OMS is its strong security, including data encryption and secure payment processing. It should also help you meet important regulations, like GDPR and PCI-DSS.

How Do You Choose Your Ideal Order Management System?

Choosing the right order management software (OMS) depends on your business’s specific needs. Here are some factors to consider:

1. Understand Your Business Requirements

Start by thoroughly evaluating your business requirements. Identify the current and future demands, including order volume, sales channels, inventory complexity, and customer expectations. Understanding these needs will help you select a system that fits seamlessly into your operations.

2. Essential Features and Capabilities

Look for an order management system that offers vital features tailored to your business. Essential functionalities include order processing, mobile inventory management, shipping integration, and detailed reporting. Ensure these features align with your specific business scenario for maximum efficiency.

3. Smooth Integration

Your new system should integrate software smoothly with your existing platforms like ERP, CRM, and eCommerce systems. Seamless integration ensures data integrity and compatibility across all your business processes, providing a unified view of your operations.

4. Choose the Right Deployment

Consider whether an on-premises or cloud-based order management solution best suits your needs. On-premises systems offer more control, while cloud-based solutions provide better scalability and easier maintenance. Choose based on your management preferences, scalability requirements, and maintenance capabilities.

5. Scalability and Adaptability

Select an order management system that can grow with your business. The software should handle increased order volumes and adapt to market fluctuations, including the addition of new sales channels and features. Flexibility is key to staying competitive in a dynamic market.

6. Evaluate Cost-Effectiveness

Analyze the total cost of ownership, which includes initial setup costs, ongoing expenses, and the potential savings from improved efficiency and reduced errors. A cost-effective system will provide a good return on investment by streamlining operations and minimizing software costs.

By considering these factors, you can narrow down your options and choose the best-fit order management software system for your business.

Develop a Custom Order Management System With Zealous

At Zealous, we recognize that the order management system is the backbone of many businesses, ensuring smooth operations and customer satisfaction. Our expertise lies in customizing these systems to your unique requirements, whether you need to streamline inventory management, automate order processing, or improve customer communication.

With our customized solutions, you can optimize efficiency, reduce errors, and ultimately drive growth. Trust Zealous to deliver a customized order management system that meets your business needs and exceeds your expectations.