Order Management System (OMS) Definition and Uses

About the Article

Getting your products in the hands of customers is no easy feat. Tracking and fulfilling orders across different channels, keeping tabs on your inventory, and providing customers with transparency into the order process are just a few of the challenges involved.

If you’re struggling with handling customer orders, an order management system might be just what you need.

What is an Order Management System?

An order management system (OMS) is software which lets you manage, sell, and fulfill orders in an efficient, cost-effective manner. It provides a centralized place for you to oversee orders across all your sales channels, both online and offline. You can use an order management system for eCommerce or traditional retailing.

The main goal of an OMS is to simplify the order process, from start to finish. An OMS system can affect virtually every area of your business including sales, customer service, fulfillment, and inventory management. It may be the difference between happy customers who continue to buy from you and dissatisfied ones who turn to your competitors.

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Benefits of an Order Management System

No matter the size of your organization or what you sell, you can benefit from an OMS.

Centralized Customer Service

An OMS keeps all customer and order information in one place. By accessing a single view of the order and fulfillment ecosystem, customer service representatives can reduce the risk of order errors, customer complaints, and lost revenue due to issues such as low inventory or unexpected shipping problems.

Omnichannel Store Fulfillment

Customers want to be able to choose how their products are delivered to them. While some prefer to buy online and have their orders shipped to their doorstep, others would rather pick them up in the store. An OMS can give customers the ability to decide how they’d like to fulfill their orders and leave them with an exceptional experience time after time.

Global Inventory and Sourcing

An OMS can help you determine the most efficient and affordable way to transport your products from your store or warehouse to your customers. Additionally, customers can use it to figure out where they can purchase your products in real-time. 

Sense of Customer Ownership

Customers appreciate ease and convenience. With an OMS, they can place orders, check statuses, and look up inventory without reaching out to customer service. This keeps your customers satisfied while saving your customer service team significant time handling requests.

How an Order Management System Works

Here's what you can expect when you implement an OMS:

  • Customer Places an Order
    Once a customer places an order – either online, in-store, or via phone – their details will be stored in the system, giving you access to their order history, order volume, and payment preferences at any time.
  • Inventory is Reconciled
    The customer’s order is synced to the OMS so the products ordered can be automatically deducted from your inventory so you have a real-time, global view of your inventory.
  • Order Fulfillment Takes Place
    During this step, the product is “picked”, appropriate packing material gathered, and a shipping label is generated and sent to the shipping carrier. 
  • Order Gets Shipped
    The order is then shipped to the customer or a store for pickup and the sale recorded into the OMS.

How to Choose an Order Management System

Not all OMS systems are created equal. When you browse the market for OMS systems, it’s in your best interest to prioritize those which offer the following features:

  • Real-Time Information
    For retail brands, real-time updates on sales and inventory can help react to problems right away and prevent them from escalating and impacting customer satisfaction.
  • Centralization
    The OMS you choose should provide an intuitive interface that gives your team the information they need in a single, easily navigable location.
  • Inventory Management
    With the right OMS, you can significantly improve your inventory control, receiving real-time information on stock levels as well as items being produced, sold, returned, and exchanged.
  • Visibility
    Complete visibility into and of your inventory means you’ll have no issues identifying when you’re running low on certain products and need to reorder them or address any supplier shortages.
  • Customer Service Capabilities
    Since an OMS is designed to meet customer demands and preferences, it should incorporate various customer service features such as a status lookup, appeasements, refunds and credit edits, and an order escalation workflow.
  • Growth and Expansion Support
    When you are choosing an OMS, think about whether or not it can meet not only your current needs but if it can support any operational complexities which may arise in the future.
  • Cloud-Based
    With a cloud-based OMS, you can access information from anywhere with an internet connection, ensuring your team can get insights on the lifecycle of an order on demand.
  • Analytics
    OMSs should make it easy for you to learn more about your customers, orders, and inventory via business intelligence, custom dashboards, and reports.

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The Advantages of Omnichannel Order Management

Customers expect they’ll receive access to the same products whether they’re on social media, browsing a website, or shopping in-store. If you don’t provide a seamless customer experience, they’ll shop with a competitor who can. This is where omnichannel order management comes in.

An omnichannel approach integrates multiple customer channels to ensure every customer receives a uniform experience, regardless of the engagement channel. An omnichannel OMS should have the ability to manage orders across all channels and use automated logic to match them with the ideal fulfillment options.

For example, a customer places an order on your website and uses their phone to make sure it’s been shipped. Once the order arrives, they decide to return it to a physical store. After making the return, an automatic credit is applied to their account and they receive a confirmation email. 

By merging an OMS with an omnichannel approach, you can enjoy these benefits:

  • Increased Sales
    When customers experience a seamless path to purchase, they’ll be more likely to convert, boosting your sales and revenue.
  • Greater Customer Retention
    When customers are able to quickly and conveniently engage with your brand through multiple engagement channels, it builds upon their sense of brand loyalty.
  • Improved fulfillment
    An omnichannel OMS will allow you to share your available inventory online and offer flexible omnichannel fulfillment solutions to your customers, growing their sense of satisfaction and willingness to shop with you in the future.

Get Started with an Order Management System Today

An OMS provides a one-stop-shop to view and manage customer orders. If you’d like to exceed customer expectations while increasing conversions and sales, it’s an invaluable resource.

Magento Order Management creates a seamless, multichannel shopping experience which meets the experience demands of today’s consumers. Learn more about the Magento Commerce OMS and discover how it can streamline your approach to order fulfillment. Experience it for yourself by scheduling a free Magento Commerce demo.

Order Management System (OMS) Definition and Uses