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Order Management System: Definition and Key Benefits

Order Management System: Definition and Key Benefits

Choosing the best order management system for your business: what you need to know

The secret of stable growth and development lies in the ability of a company to utilize the right tools for process automation and optimization. Not only do such tools help facilitate the work process but they also contribute to increasing customer satisfaction as all the processes are carried out in a smooth and efficient manner.

The order management system, or OMS for short, is one of such tools. It manages the end-to-end cycle of order processing, starting from its reception and ending with the order delivery to a customer. Due to its rich functionality, the system is a valuable asset for any company that deals with customer orders. In this article, we will review the main benefits of the OMS and will provide a few useful tips on choosing the most suitable system for your business.

The definition of the OMS

As we already said, an order management system takes care of the end-to-end order placement process, including inventory management, invoice generation and management of the customers’ information. OMS can also be combined with business intelligence tools in order to improve the processes and make smarter business decisions.

Some of the basic functions of any OMS are:

  • Order tracking 

  • Inventory management

  • Order fulfillment

  • Management of returns

  • Update of information on the order and its status

While some e-commerce entrepreneurs use their e-commerce platforms as order management systems, it might not be very correct. Even though an average e-commerce platform has all the necessary functionality for order management, it may not be enough if a company has a complex order fulfillment process, many warehouses, or several sales channels. In these cases, a company will absolutely need an OMS in order to grow and expand the business.

The main benefits of the OMS

Even though OMS is common among entrepreneurs, some of them do not understand all the benefits that this system brings. Below we list down the most important advantages of the OMS to consider.

Automation of processes

Imagine how many orders go through an average e-commerce store or any other goods-based website on a daily basis. It would require a tremendous amount of resources and time to process every order correctly and without making a mistake. This is where OMS steps in and significantly speeds up and optimizes the order processing by automating a variety of related tasks. And since the order management process becomes faster and more efficient, it also increases customer satisfaction.

Easy access and centralized view

With OMS, an entrepreneur will be able to access the inventory, order history and other data from any place and at any time. This can be really useful in specific circumstances and overall, it grants business owners more control and flexibility over the business processes.

As well, by keeping all the processes in one system, the entrepreneur gets a centralized view of the business. This, in turn, helps adjust the development strategy, identify problem areas and improve optimization methods.

Scalability

Every business aims for future growth so scalability is crucial. As mentioned above, an average e-commerce platform cannot efficiently deal with the growing number of sales channels and warehouses but the OMS seamlessly takes care of this issue. As a result, the business can keep growing and expanding without harming the processes and profitability.

Efficient inventory management

The OMS manages inventory data in real-time and that means, business owners always know what’s going on with the goods in their inventory. This helps make better decisions in terms of goods, for example, preventing the company from overselling or, on the contrary, stocking too many unpopular goods. In this way, businesses gain immense flexibility in terms of adjusting to the customers’ needs.

How to choose your perfect order management system

After looking at the OMS definition and its key benefits, it’s time to have a look at the essential features that are expected of your perfect OMS. Of course, the key factor in choosing an OMS would be your business (its scope, goals, number of sales channels, etc.) but there are still a few questions to ask when looking at the possible solutions.

Does this OMS integrate with your existing website?

When you plan to deploy any new tool, the number one question is whether it can be integrated with your existing system or whether you need to invest time and resources into its integration. Even thorough most of the OMS systems are designed with integration in mind, you still have to check it to avoid issues in the future.

As well, pay attention to the integration with the warehouse and fulfillment partners - the system should seamlessly integrate with them as well.

Scalability

Even though the order management system is tailored to serve growing companies, it still may have certain limitations. Therefore, one needs to learn about these limits and the available functionality so that the system will perfectly match the business goals.

Reporting

An efficient order management system not only automates and facilitates the processes but also helps the user make accurate decisions based on reporting. Thus, look for the reporting feature in your OMS.

Reporting includes the tracking of the performance, reports on revenue and shipping, demographic information, etc. All this data helps business owners better understand the state of their business and timely make the necessary adjustments.

Summary

An order management system is an essential tool for any company that provides goods or services to the customers. Even though there are many available solutions, sometimes your business may require designing a custom solution from scratch in order to fully correspond to the requirements and needs of your business. 

SoftTeco has rich experience in developing comprehensive and user-friendly order management systems for clients of different sizes and from various industries. We will gladly help you grow your business by providing a scalable and robust solution tailored precisely to your needs and customers’ requests.

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Irina Linnik

Irina is a professional copywriter with over 7 years of experience in this domain. She loves creating compelling and informative copy that provides readers with all the needed information. Irina is also a frequent contributor to different blogs and websites across different domains.

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