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Why are Order Management Systems (OMS) so important?

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Geofferey Pagel
by Geofferey Pagel
Jun 21, 2023
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With all the options to process orders that exist today, retailers are getting a bit overwhelmed.

If you sell products via a brick-and-mortar store or on an e-commerce site, you likely have many options for ordering: by phone, by email, through your own site or other sites such as Shopify, Amazon or eBay.

It can be difficult to choose the best way for your customers to place their orders with you. The good news is that there are several ways you process orders more efficiently.

In this article, we will discuss one of the most important, an order management system designed for omnichannel retailers or retailers who want to reach the widest audience.

What is an Order Management System?

An order management system (OMS) is a great way to streamline the order process and make it as efficient as possible.

OMSs provide businesses with an automated system that can help them manage their inventory, track orders, and ensure the timely delivery of products.

This process used to be done manually or with spreadsheets and tables that were updated with new data as orders were processed. However, this method is now too inefficient for modern ecommerce businesses.

The goal of ecommerce order management is to streamline the entire process from beginning to end. By automating many of the tasks involved in managing orders, businesses can save time and money while ensuring accuracy and efficiency.

Automation also helps reduce errors and delays in order processing and fulfilment, which can lead to improved customer satisfaction and loyalty.

With the right tools in place, ecommerce order management can help businesses run more smoothly and efficiently while providing a better overall customer experience.

Moreover, OMS also provides businesses with valuable insights into their operations. They can use these insights to identify improvement areas and optimize their processes accordingly.

Why should you use an Order Management System?

As mentioned, an OMS is designed to optimise your order processing and fulfilment. But if you're still unsure whether you should use OMS or not, here are a few benefits you can gain with the OMS functionality.

1. Maximise convenience

If you are occupied with manual processes or administration all day, there is a slim possibility that you will be motivated by something that occurs later.

An OMS for ecommerce platform makes life easier by cutting the employee's route to process orders in half.

They have more internal resources to devote to the overall objective of making the company better and more productive.

2. Reduce human error 

Order management entails dealing with large amounts of data. When these data are dispersed across channels, the problem becomes more difficult.

Humans are not flawless, leading to mistakes and ecommerce security issues.

If these problems go unchecked, they spread throughout the inventory management chain or supply chain.

The worst-case scenario is when these mistakes are discovered by a customer who, for example, receives the incorrect order or pays the incorrect amount.

This is where order management solutions for ecommerce come in. They reduce human error.

3. Orders processed fast

Customers want you to respond quickly, and when they have to wait too long, they will go straight to your competitor.  

An OMS reduces delivery costs and improves order routing. This expedites the method of receiving a customer's order and interns reduces delivery wait time.

4. Faster development

When the order status is grouped in one location, you get a bird's eye perspective on the situation.

It will make your development much faster, and you can focus on providing the best possible features in the shortest possible time instead of tedious data entry.

5. Simplify cross-channel commerce

Online retailing is more than just ecommerce websites for people to buy online.

People sell and advertise their items using multichannel or various social media, including YouTube and Pinterest, as well as numerous marketplaces.

It's difficult to maintain the pace of all ecommerce key performance indicators (KPI) in an error-free manner when you receive orders from numerous channels.

An OMS solution makes cross-channel or omnichannel commerce significantly easier by utilising a centralised hub with information regarding stock levels, warehousing, logistics, and goods.

How much does an Order Management System cost?

An OMS is not a one-size-fits-all solution, instead, it is tailored to each company in a specificway depending on the needs of the company.

Therefore, the price is determined by a variety of criteria, so here are some factors that will affect the price of your OMS:

1. Support

The OMS support is a key factor that differs per supplier.

Some OMS companies will provide support as part of the monthly subscription you select, but this is not always the case.

You might well be limited to a certain amount of hours or tickets each month, with anything beyond that costing extra.

Other OMS providers could offer tiered levels of assistance, where you get more help for a higher monthly fee.

Which one you choose will depend on your specific needs.

2. Business size

Technology companies that provides OMSs will often scale their cost based on numerous characteristics of your business, such as:

  • How many people will there be in the system?

  • What is your order volume?

  • How many locations, e.g. warehouses and stores, do you have?

A greater monthly price might be expected as the number of members, volume, and places increase. If you have fewer of them, your expenses will likely decrease as well.

3. Type of system

OMS suppliers sometimes provide tiered subscriptions with a rising amount of features, unique services, or more activities per month.

They'll be given various names, such as Basic, Pro, Premium, and so on.

These packages should be well outlined and allow you to quickly assess what you are receiving for the price.

An OMS supplier may offer both scaling prices and plans sometimes, which makes determining pricing difficult.

It also might change quickly if you hire more employees, increase production, or want extra features.

Keep a look out for them, particularly if your company is rapidly expanding.

4. Implementation

Implementation, onboarding, and other modifications are other elements that might raise the cost of an OMS.

Implementation typically involves elements required by larger companies that must be built or designed for the individual company. This is often available at the enterprise level.

  • Since an OMS might be sophisticated, onboarding is an appealing feature.
  • When you add a new technology into your operation, it is critical that your employees know how to use it.
  • Some factors can dramatically increase the cost you spend for the OMS. They include the number of employees, the difficulty of the system, your stock or transaction data, and the number of places you run.
  • There are also customisations as an OMS may frequently be tailored to a specific firm.
  • It may be pricey since not every system is created to do so, and modifications may be required.
  • Many customised software development firms specialise solely in this sort of integration and have their own pricing modules.
  • Before building one, define the use situations, benefits, and drawbacks to help justify the expense.

Conclusion

Ecommerce is a business that has become more essential for all businesses in the 21st century.

If you want to increase sales or profit, you need to set up an online store and you need to have a system that will help you to manage the order.

An OMS is a solution that will help you to manage the orders effectively. This kind of system is suitable for all types of e-businesses as it is simple, easy to use and has many useful features. 

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