What is an Order Management System (OMS)?

An order management system (OMS) is the central nervous system of a modern multichannel retail operation. In a nutshell, an OMS takes customer orders, assigns them to be fulfilled and shipped, tracks status throughout the process, and shares that information to the systems and people that need it.

Sounds easy? When retailers sold only through stores, it was a whole lot easier. With more sales channels and higher customer service expectations, the mission of the OMS has expanded.

OMS Retailer Challenges

Customers are pressuring retailers to excel in multiple sales channels

The pressure to sell through multiple channels is immense. From Amazon Marketplace to brick-and-mortar stores, and from catalog orders to eBay, consumers are driving commerce across more channels and platforms than ever. And customers care. Aberdeen Group Inc. claims that companies with the strongest omnichannel customer engagement strategies retain an average of 89% of their customers, as compared to 33% for companies with weak omnichannel strategies. And Macy’s reports that omnichannel shoppers are 8X more valuable than those who shop in a single channel.

Customers expect a consistent and coordinated experience across channels

Customers are growing more accustomed to new services enabled by multiple channels:

  • I want to buy online in NYC and pickup in a store near my travel destination.
  • I purchased online, and I’d like a telephone rep to change my order.
  • I’m traveling, so I’d like the product delivered after I return, 2 weeks from today.
  • I want to make sure the item is in stock before I drive to the store.

Traditional inventory management software hasn’t kept up with customer service demands.

Enter the modern Order Management System (OMS)

Unlike traditional inventory management software, the modern OMS is designed with the end-customers’ experiences in mind. An OMS generates a holistic, centralized, 360 degree view of customer orders and available inventory across all sales channels (stores, marketplaces, ecommerce storefront, distributors), fulfillment centers and customer service channels.

The Modern Order Management System

A modern OMS unifies critical data to deliver a consistent omnichannel customer experience.

In the examples above, customer service agents have real-time insight into an order’s status, enabling them to deliver a “wow” experience to customers. Managers can accurately report on current stock, and they can more accurately forecast — they can make data-driven decisions, avoid stockouts, and increase inventory turns.

Why do you need a modern Order Management System?

We’ve seen that as commerce shifts to new channels, customers’ expectations are shifting as well. They want to buy your products anywhere, and return them from everywhere. They assume that their order will be fulfilled and shipped quickly, and exactly as forecasted. They take for granted that the product they want will be in stock. As their expectations rise, they’re also sharing their experiences more than ever—on review sites, Amazon, and social media. Every bad customer experience can seriously impact your bottom line, as you fall behind the experience that your competitors are able to deliver.

An integrated, omnichannel order management solution keeps you one step ahead:

  • With one centralized database, CSRs and managers can see the precise, in-the-moment status of any order, and modify or refund an order instantly.
  • You can ensure the same excellent customer service for every channel by delivering a consistent view of all orders, customers, inventory, products, and promotions.
  • You’ll reduce the friction in every transaction—no more sitting on hold—and leave customers delighted.

In a complex, multi-channel business, each of your products passes through many different teams and locations to get to your customer. A great OMS will save you time and hassle every step of the way:

1. Stock products – Centralized inventory management means your business is informed with real-time inventory status, ensuring you keep products in stock for web, phone, and brick-and-mortar sales.

2. Take the order – Web, phone, mail-order, or in-person sales are all processed by the same system, so nothing slips through the cracks. Customize your order forms and processing to collect exactly the information you need, every time.

3. Route and process – Design business rules for order routing, and make them as complex or as simple as your business requires. Save on shipping costs by choosing the fulfillment center closest to the consumer. Or ship from an overstocked store. With real-time monitoring and reporting tools, you’ll optimize every process for speed and efficiency.

4. Fulfill – Automated tools generate pick lists, packing slips, and shipping labels with a few clicks, so your fulfillment centers can ship faster.

5. Deliver – Advanced shipping integration combines your in-house fulfillment and shipping resources with built-in connections to UPS, USPS, FedEx and more. Eliminate the needless lag of exporting and importing order data.

6. Return – Orders update in real-time to one central database, so CSRs can modify any order. You can accept returns through any channel, providing consistently great customer service. Behind the scenes, you’ll keep control of your business with advanced workflows and routing for returns.

What are the essential features of a world-class OMS?

Every business is built a bit differently, and a world-class OMS will have the robust features and flexibility to meet your precise needs.

  • Modern Features – Your OMS must support your omnichannel service aspirations. It’s critical to map your business to OMS features so you can choose an OMS that will meet your needs. Our Order Management System RFP Template can be a great tool to help prioritize and compare features.
  • Powerful integration – Your OMS will share information with your ERP, ecommerce website, POS systems, warehouse management system and more. It’s the driving force in unifying your systems. In fact, underdeveloped APIs is noted in our recent white paper as one of the 5 Hidden Costs to Avoid When Buying an Order Management System.
  • Inventory insights and forecasting – You shouldn’t have to cobble together multiple reports to understand what’s going on with your business. Consistent inventory management across all sales channels ensures that you’re always in stock and able to plan for the future.
  • Exceptional customer service – If you ever run into trouble, you need to know that an experienced partner will be there to help.

A modern Order Management System is the central nervous system that your commerce operations need in order to consistently deliver stellar omnichannel customer experiences. An OMS enable merchants to increase customer satisfaction, share of wallet, and ultimately, growth. All while delivering the flexibility and efficiency needed to continue adapting to ever-evolving commerce channels and customer expectations.