What is an Order Management System in eCommerce?

Have you ever wondered why all eCommerce businesses are making the switch to order management system solutions? Find out why.
April 25, 2022
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5-min read

When you get right down to it, the gist of eCommerce is very simple. You sell a product online and then you deliver it. The difficulty resides in getting right all the bits in between selling a product and delivering it. And that's where your order management system (OMS) comes in. Read on to find out more:

What is an order management system?

A good OMS works a bit like an orchestra. Instead of compartmentalising every step in the order management cycle, it provides a centralised solution where they all converge. An integrated order management system keeps everything on one platform to streamline and optimise the order management cycle. The result? More sales, greater customer satisfaction - in a nutshell, more profits and growth.

But what exactly is an OMS? A simplified answer would be that an order management system is software that takes care of every process in the ordering of goods or services. Simply put, it's the central hub in any eCommerce business. From purchasing and processing to shipping and delivering, this integrated solution brings together every single touchpoint in the functioning of a business. Whether it's online or bricks-and-mortar, all successful businesses use OMSs to streamline the processing and fulfilment of orders.

Above everything else, a good order management system should be user-friendly. We live in an age of convenience - if we can't get something right away, then it's not good enough. On top of ensuring a quicker turnaround, your OMS will allow you to send regular updates of the order's journey to your customers. It will also simplify your customer services and returns processes, significantly increasing your customer retention rate.  

However, this is just one of the many advantages that a good order management system brings to the table:

What are the benefits of an order management system?

These are the different ways in which an order management system can put you in the driving seat whilst empowering your business.  

Tracking stock levels

Inventory management can be particularly tricky for an internet business. Your products might be stored in different warehouses across the country, making it harder to keep track of your stock levels. If you can relate to this, you're not alone. In 2018, a survey of supply chain executives reported that inventory management was the third-largest challenge for businesses.

Fortunately, you can get rid of inventory-related headaches by implementing an order management system. An OMS will allow you to update inventory levels across several channels in real-time. Having data-driven stock levels will also help you to take control of all inbound and outbound stock movements. That way, you will never be understocked or overstocked.

Simplifying multi-channel operations

By bringing together all your channels into a single user interface, your order management system will dramatically trim down the complexity of your operations. It will provide a one-stop solution for your marketplace, warehouse management, accounting and courier systems.

In the days of strict General Data Protection Regulation, storing your data safely is integral to gaining customer confidence. Not only will a centralised platform save you time - but it will also make your business a lot safer. You won't have to log into different platforms and sites, significantly reducing the chances of a data breach.

Order automation

As much as we long for the simplicity of the pen-and-paper days, let's face the facts - automation has made our lives a lot easier. From inputting data to updating stock, some of the essential tasks of running a business are unfortunately very repetitive and unmotivating. That's exactly why you should just let your OMS take care of them. That way, your employees can tackle tasks that demand human intervention such as customer service or stockist liaison. Removing menial tasks from your employees' workload will reduce burnout and stimulate motivation.

In today's super-competitive eCommerce environment, you might never recover from a handful of bad reviews. Because an OMS solution automates important processes, it greatly reduces the possibility of human error. On top of that, automation can also help in unexpected ways. For example, it will optimise your warehouse solutions, increasing your total storage space and easing health and safety compliance.

Most importantly, automation will allow you to process orders 24 hours a day, 365 days a year. According to a recent report, the peak online shopping hour is between 8pm and 9pm. By that time, most or all of your staff will be in the pub or in front of the telly at home, not in the office. By automating the sales process, your OMS will automatically send shipping dispatch emails and send the order through to your preferred courier for delivery. Eliminating the need for human intervention will turn your business into a 24/7 profit-making machine.

Understanding buying patterns

An order management system will give you a clearer picture of how your business is performing. It will highlight what your bestselling products are, as well as help you to pin down the areas where you need improvement. For instance, it might flag that a certain item is being returned more often than usual. Additionally, an OMS will improve your industry insight so you can be ahead of the curve when it comes to buying patterns and trends.

In an ever-changing marketplace that is more competitive than ever, every single advantage counts. A good OMS solution should include customisable dashboards to generate comprehensive sales data reports and gain real-time insight into customer trends. These dashboards will also allow you to view your profit margins on all orders and give your sales reps the right tools to boost conversion rates.

Implement a seamless order management solution today

If you really want to compete, it's time to implement an order management system solution. From insightful order reports to time-saving order workflows, an OMS like OGL's Sales Order Management Software will equip you with all the right tools.

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