What is an order management system? (OMS)

What is an order management system?

An order management system (OMS) is software that automates the entire order lifecycle, providing complete visibility from inventory availability and order receiving to tracking and shipping notifications. The retail channels that can benefit from an OMS include bricks-and-mortar locations, websites, call centers, mobile orders and kiosks.

For customers, an OMS simplifies the buying process. For businesses, it makes it easier to manage orders, inventory, fulfillment and product returns.

To remain competitive, companies need to provide real-time customer, product, pricing and inventory data across all channels. Order management software provides inventory visibility across the enterprise, regardless of sales channel, helping to provide a buy, fulfill, track and return anywhere experience.

Functionality considerations

Here are some features that your OMS system might include:

• Receiving orders from multiple channels
• Accepting and processing payments
• Delivering orders based on customer proximity
• Allowing for in-store pick up (click and collect)
• Monitoring and optimizing inventory levels, with predictive stock requirements
• Enabling customers to track their orders

Integrating with accounts receivable to create invoices and receiptsom anywhere with complete security.

Benefits of an order management system

There are several benefits to implementing an OMS:

• Higher margins and less waste - With the ability to fulfill orders more efficiently across their network and sales channels, businesses can eliminate unnecessary costs associated with excess inventory levels, suboptimal processes and operational waste.
• Improved visibility - By aggregating customer information, payments, inventory, orders and fulfillment information through an OMS, retailers gain full visibility over their sales and delivery performance.
• Optimized stock control - With better visibility into sales, businesses can minimize excess stock and maximize cash flow, while still meeting customer demand.
• Reduced data entry - Because the same information is used across all areas of the sales and fulfillment process, less data entry is needed, which in turn reduces errors.
• Complete transparency - Everyone in the organization can access and track orders. Through the OMS, customers can also gain visibility into their order status.
• Better business decision making and analysis - Companies can leverage built-in key features such as business intelligence, machine learning and artificial intelligence, to prevent human error and to forecast more accurately. OMS dashboards can inform decision making by highlighting sales patterns, tracking key performance indicators (KPIs) and forecasting sales and inventory levels.

Efficiency through automation

By automating process steps that would have previously been carried out manually, an OMS increases order management efficiency. By processing orders swiftly and efficiently, an OMS increases customer satisfaction and enhances cash flow and profitability.

Advantages of system integration

Integrating an OMS with other critical business systems eliminates the need for repetitive manual input. It also significantly decreases the chances of inaccuracy and inconsistent data being produced by different departments within the organization.

Here are some examples:

• Financial systems – Accounting; purchase ledger; sales ledger.
• Customer database – Contact details and information on most profitable users.
• Stock management – A consolidated view of inventory; routing orders to the next suitable warehouse; picking, packing, tracking and shipping options.
• Sales channel – Receiving and consolidating order information through all points of sale, including online, in-store and customer service orders; supporting orders from global regions with multiple currencies.
• Sales support – Updated product information in real time, supporting omnichannel customer returns and exchanges.

Who needs an order management system?

As the eCommerce landscape has grown over recent years, an OMS has proved hugely beneficial for retailers, wholesalers, manufacturers and third-party logistics (3PL) providers. High-volume enterprise retailers and brands with complex fulfillment operations or omnichannel requirements are deploying order management software to enhance the customer experience and optimize operational efficiencies.

The most sophisticated OMS platforms provide fulfillment reporting and insights, so that retailers, warehouses and distributors can track KPIs. An advanced OMS software will track fulfillment costs such as picking, packing, shipping, product defects and return rates. By monitoring these and other KPIs, businesses can identify inefficiencies and plan to address them.

Retailers and distributors that receive orders from more than one channel (for example, a bricks-and-mortar store plus a website) frequently use OMS tools. Equally, online-only retailers can manage all sales processes from a single sign-on. They can also more easily accept orders from various online channels, including through an app, their website or social media.

How to deploy an OMS in a complex retail environment?

Managing customer demands from differing sources is a huge logistical challenge, particularly if a retailer is using different systems across each channel.

Through an OMS, retailers have one integrated process from order receipt to fulfillment, across their different delivery channels. To manage inventory planning, they have full stock visibility across their stores, warehouses, drop-ship locations and 3PL partners.

Product returns management

Within its OMS, a business can set the rules for processing returns and exchanges across all its retail channels. It can also credit the customer account and manage the disposition process.practices for international standards such as SOC1, SOC2, ISO, HIPAA and FedRAMP. You also have the flexibility to work from anywhere with complete security.

What to look for in an Order Management provider

There are certain key attributes a business should look for when sourcing an OMS provider and steps an organization can take internally to manage the change process. Some of these are summarized below:

1. Assessing requirements: The design of the OMS should never be dictated only by system capabilities. It should be driven by current and future needs, factoring in increasing order volumes, expanding product lines or international growth plans. If a provider arrives to install a system without asking the right questions and conducting the proper analysis, it should immediately raise a red flag. Multiple stakeholders should be involved in the information gathering and selection stages. This would typically include leaders from supply chain, IT, finance, marketing/​merchandising, customer experience and digital commerce operations.
2. Conducting a conference room pilot: Once the analysis has been conducted and software selected, the next step should be to complete a conference room pilot (CRP). During the selection process, the business may have been presented with various solutions that have different features and capabilities. This can cause confusion in making comparisons. A CRP with a comprehensive proposed process flow can be invaluable in helping the business understand the options in its own specific context.
3. Change management: It can often be difficult to gain internal buy-in for organizational change – particularly where core systems are involved. However, successful implementation of a new OMS depends on everyone moving toward the same goal. At the onset of the project, it is useful to develop a project charter, or “roadmap,” to communicate the strategic drivers of the OMS. The selected system provider should be able to assist with this. A high percentage of the return on investment of a new system deployment relies on employee adoption and usage. It is therefore helpful to map process flows ahead of time, so that internal stakeholders can clearly understand the reasons for the change, how it will benefit them and timelines of system integrations.
4. Data clean-up and performance testing: An OMS is only as good as the information it is provided. The business should sanitize its current data so the system can make completely accurate decisions based on what it receives (e.g., inventory quantities, plus customer and order information from all touchpoints). Equally, your system provider should work with you to undergo a thorough performance testing process aligned to the original project charter.
5. Preparations to go live: This involves aligning the business’ new capabilities to its overall strategy, while staying true to the project charter. The key here is to introduce changes incrementally – not at a rate the organization cannot absorb. Moving to deployment, it is crucial to complete the necessary training for both office and field staff. There is no such thing as too much clarity. Everyone should know the process for asking questions, raising issues and how and when they can receive responses. When going live, there are no “do-overs,” so it is essential to test the OMS prior to this in every way possible. This could include multiple end-to-end testing exercises, CRPs and mock go-lives. Using a checklist is a good approach.
6. Timelines: A typical OMS implementation can take eight to twelve months, with an additional six months for users to become familiar with the new system. That said, with the proper preparation and right resources, implementations can be completed in as little as eight weeks.

Functionality considerations

Here are some features that your OMS system might include:

• Receiving orders from multiple channels
• Accepting and processing payments
• Delivering orders based on customer proximity
• Allowing for in-store pick up (click and collect)
• Monitoring and optimizing inventory levels, with predictive stock requirements
• Enabling customers to track their orders
• Integrating with accounts receivable to create invoices and receipts

Integrating your Order Management System (OMS) with a Warehouse Management System (WMS)

A warehouse management system (WMS) is a key component for any business that holds on-hand inventory. This works hand-in-hand with an order management system in managing and executing warehouse or distribution operations. A WMS directs functions such as order picking and replenishment, yard management, transportation and shipping.

Combined with a WMS, an OMS provides a single source of truth, managing inventory across all sales channels (ecommerce, mobile, physical). In conjunction, an OMS and WMS create a powerful infrastructure to deliver above and beyond customer expectations.

Planning your systems implementation

An order management system should connect to other systems, including an organization’s ecommerce website and enterprise resource planning (ERP) system. By integrating the different elements of its business software into a single ERP platform, the business can lower manual input and reduce errors. Taking a broader look at this integrated approach when implementing an OMS will help save time and inconvenience in the future.

Infios’s Order Management solution

The Infios Order Management System (OMS) and Commerce Platform seamlessly integrates orders, inventory and customer data, so that businesses can adeptly tackle peak season challenges with real-time visibility. The platform:

• Generates insights from order data to identify trends and optimize processes
• Uses predictive analytics to forecast patterns based on historical factors
• Adapts order processing workflows based on demand fluctuations
• Integrates online and offline sales channels for seamless coordination and flexible purchasing
• Consolidates orders from multiple sales channels into a single platform
• Analyzes insights to prioritize orders based on urgency, value and customer loyalty
• Provides real-time visibility into available inventory across locations
• Automates order processing to optimize fulfillment and reduce errors
• Routes orders to the best fulfillment center or store based on proximity
• Enables customers to track orders in real time
• Streamlines returns and exchanges through automated authorizations

The platform is designed to meet the complex and evolving needs of omnichannel organizations. Built on a microservices architecture and multi-enterprise integration framework, it can rapidly enable unified, customer-centric commerce in weeks or months.

Order Management System case studies

Saddle Creek: Providing a flexible 3PL solution

Saddle Creek Logistics Services (Saddle Creek) provides third-party logistics solutions including omnichannel fulfillment, warehousing and transportation. It has more than 19 million square feet of warehouse space across 45 locations and a 3,300-plus headcount.

Saddle Creek needed:

• A portal access, where a client can view all key metrics of its business, as well as detailed information about its customers’ orders
• A robust reporting and business intelligence capability, so a client can see trends at an aggregate level
• The option to restrict client visibility – where (for example) a user can only see the information that pertains to its own operations
• The ability to grow its omnichannel business by a double-digit percentage
• The flexibility to allow a call center to manage customers’ orders
• The capability to increase order visibility from start to finish

Infios worked closely with Saddle Creek developers to deliver an “out-of-the-box with a multi-tenant” OMS. The Enspire Commerce platform, as it is known, enables Saddle Creek’s clients to establish set business rules but also override them when needed. The system enables its clients to fulfill orders based on inventory and customer segmentation rules, so customers can receive their products no matter where they are ordered or purchased from.

Titan Brands: End-to-end process visibility

Titan Brands, a $200 million-plus online retailer sells more than 3,000 different products, from farm attachments and loading ramps to fitness equipment and outdoor products. It is expecting an increase of three times its current revenue over the next five years.

The company commissioned Infios to implement the Enspire Commerce platform, including its next-generation, cloud-native OMS, in conjunction with its customer care, customer experience and product information management (PIM) solutions. Titan also leveraged Infios’s Warehouse Management System to optimize fulfillment and labor productivity within its distribution centers.

As a result of the implementation, Titan Brands has achieved real-time inventory availability as well as accurate delivery times and freight costs. It can also allocate against in-transit future inventory, then calculate delivery dates accordingly to reduce back orders by 70%.

The solution has helped to eliminate error-prone processes in customer service, warehouse and finance – increasing the company’s bottom line and enhancing customer service.

GNC: Improved order delivery and customer experience

GNC is a leader in the vitamins, supplements and wellness space, with 4,000-plus stores across more than 50 countries. It wanted to enhance its omnichannel customer experience and increase inventory availability, without sacrificing profitability.

By partnering with Infios, GNC’s OMS system achieved:

• Inventory visibility to support its numerous omnichannel product lines
• Fulfillment options with 100-plus integration points
• Reduced shipping costs and out-of-stock items
• Improved order delivery throughput
• The facility to allow customers who visit physical stores to order items online that may not be available for immediate purchase