Order Management System (OMS): Definition & Best Practices

Online businesses face a lot of challenges when it comes to creating a seamless order experience.

That’s because the order management process doesn’t stop when the customer clicks “Buy.” Rather, it’s just the beginning.

Businesses may use different agents and systems to communicate order details back and forth, potentially giving rise to miscommunications and delays. Further, relying on manual entry and disparate systems can pave the way for a greater margin of error.

A streamlined order management system is crucial when it comes to creating the perfect end-to-end commerce experience for your customers — from shopping to shipping.

In this guide, we define what an OMS is, why it’s important, and how to deliver a seamless experience across the entire order lifecycle.

What Is an Order Management System?

An order management system is a platform or tool that allows sellers to track sales, process orders, manage inventory, and streamline fulfillment with the goal of making sure products end up in the hands of the customers who ordered them. It ensures that orders are delivered as expected, with full order transparency, quick shipping, and timely delivery.

While order management itself hasn’t changed much throughout the years, what has changed are buyers’ expectations around how fast their orders end up on their doorstep. With same-day shipping becoming the norm, customers expect an efficient (and friendly) ordering experience.

That’s why order management now demands a multifaceted system, one where every step of the ordering, tracking, and fulfillment process is taken into consideration.

Challenges in Order Management

However, for many businesses, the act of processing, tracking, and fulfilling orders is tedious, time-consuming, and expensive.

The process between shopping to shipping presents a slew of challenges, including how to:

  • Coordinate orders and inventory across multiple channels

  • Align sales agents and online tools to work cohesively

  • Manage shipping schedules and complex orders

  • Streamline order fulfillment using third-party logistics (3PL)

  • Track success using reports and analytics

Without a unified OMS, sellers are likely to experience hiccups along the way — from shipping delays to lost orders to unhappy customers.

How an OMS Works

Customers today want fast and easy shipping, hassle-free returns, and transparent order status so they know exactly where their orders are and when they’ll arrive on their doorstep.

For those reasons, one of the main objectives of an OMS is to streamline and simplify the order process to ensure transparency through the entire order lifecycle.

An order management system typically consists of computer software, online tools, and team processes that remove bottlenecks through the ordering process.

An OMS works to:

  • Accept orders and payments online

  • Provide timely invoicing and payment processing

  • Track orders from purchase to delivery

  • Provide sellers with access to important analytics regarding orders

  • Route orders to the closest fulfillment center or warehouse

  • Reduce the cost compared to using multiple, incohesive systems

  • Forecast stock levels to prevent out-of-stock issues

  • Give buyers a way to track their orders online

While every order management system works a bit differently based on the businesses’ requirements, the overall function is to make the shopper experience as hassle-free as possible.

Establish touchpoints at every step of the ordering process.

Effective order management depends on a multidimensional system that oversees every component of the online selling process, including:

  • Customer experience

  • Invoicing and payment

  • Sale channels

  • Inventory management

  • Fulfillment and suppliers

  • Order packaging and processing

  • Order shipping

This way, you have the ability to monitor orders from the moment they’re placed to the moment they make it to your customers.

The result is a streamlined end-to-end system where your customers can expect a fast, affordable, friendly, and efficient buying experience. 

If you want to create that perfect unboxing moment for your customers, you’ll need an OMS that removes manual bottlenecks, makes tracking orders simple, ensures fast shipping, and provides the best service to your customers.

If the system you currently have creates friction and delays in the ordering process, it’s likely that you have too many moving parts, which can all be streamlined by an efficient order management system.

Further, having an OMS that’s completely integrated with your customer service platform means shoppers will be able to engage with agents to update their order or complete returns in just a few minutes. Conversely, agents will be able to service customers quicker because they're not having to toggle between multiple screens and systems to assist inquiries.

Here are some of the many benefits of implementing an effective OMS:

  • Enable self-service, allowing customers to place, track, or cancel their orders themselves

  • Align orders across multiple sale channels

  • Efficiently match orders to inventory

  • Track order fulfillment online via 3PL

  • Accommodate complicated shipping schedules

  • Access analytics and reports all in one place

  • Connect commerce to customer service

  • Make ordering and order tracking available on any device

Every step of the ordering process presents a possible risk of delays or bottlenecks. To avoid cancellations, lost orders, and unhappy customers, you’ll want an OMS that makes the ordering process as frictionless as possible.

Key Considerations in Choosing an OMS for Your Business

Every OMS is different and should be tailored to the unique needs of each business. That’s because every business has different products, a different customer base, and different order fulfillment systems.

However, there are some key considerations to keep in mind when choosing order management solutions for your business.

Identify your pain points.

If you’re considering implementing a new OMS, it’s likely due to the fact that your current system is causing some issues.

For instance, perhaps you and your team are having trouble navigating multiple tools at once — tools that don’t necessarily work together cohesively.

Or, maybe you’re spending far too much time on manual work like placing orders, counting inventory, or providing customer service. These can all become extremely time-consuming and cause huge delays in the ordering process.

No matter the case may be, you’ll want to identify your strongest pain points in order to establish the “must-haves” you’re looking for in a new order management system.

In reality, it’s likely that you have multiple pain points when it comes to your existing system. From shipping delays to order cancellations to hiccups in the returns process, there may be many issues that need to be addressed.

List out three to five pain points that you have with your existing OMS, and then carry these over when it comes to defining your objectives in choosing a new system. That way, you’ll know what to look for in finding a connected, unified OMS that addresses all of your pain points.

Define your objectives.

Once you know your pain points, you’ll have an idea of what you want your new OMS to accomplish.

In defining your objectives, don’t forget to consider the scalability of your order management system. While your business may be small potatoes now, a new OMS could actually help you accommodate more orders than ever before. You’ll want a system that will grow as your business grows.

Assess capabilities.

Your order management system may consist of a single software or include several tools and processes at once. 

At the very least, your OMS should be able to:

  • Accept orders from multiple channels

  • Route orders from your chosen fulfillment center(s) based on proximity

  • Keep you updated on inventory levels to prevent stock-outs

  • Allow customers to track their orders online

  • Provide order details to your warehouse or 3PL

  • Establish a shipping schedule so orders arrive on time

  • Provide a self-service option to customers so they can cancel at any time

  • Create a system for accepting returns

You’ll also want an OMS that connects commerce with your customer service team and allows customers to access automated customer support. That way, customers get the support they need when they need it, and your service team is able to address any issues as soon as they arise.

For example, Salesforce Order Management from Commerce Cloud offers a complete order management solution that connects commerce and service, processes payments automatically, manages cancellations and returns, and more.

Hosted on a flexible, cloud-based platform, B2C companies can manage their orders from anywhere while connecting it all to a single CRM.

The result is a premium commerce platform that’s targeted to B2C users and uses the latest technology (like Einstein AI) to provide a unified experience for you and your customers.

While there are many more important questions you can ask when it comes to choosing an OMS, the main one should be whether it creates the unified experience you (and your customers) are looking for.

Setting Up Your OMS

Salesforce offers a vast partner ecosystem that helps businesses drive innovation and improve their business systems. From consultants and system integrators (SIs) who provide systems expertise to certifications and training resources, we give customers access to a range of beneficial partnerships and tools to help them create a unified experience for their customers. 

Salesforce Order Management provides live chat customer support to assist our customers in setting up their OMS. Plus, customizing your OMS to suit your needs is as easy as dragging and dropping the features you want.

Frequently Asked Questions (FAQ)

What is the process of order management?

Order management is the process of processing, tracking, and fulfilling orders. It involves a system of tools, software, and people that work to create a positive customer experience. Order management begins when a customer places an order online, and then it tracks the order until it is fulfilled and shipped to the customer.

Does my business need an OMS?

If you run a commerce business that involves processing orders and sending products to customers, then you’ll need an OMS that allows you to streamline the process from purchase to delivery. While manual order management is an option, it’s often tedious, time-consuming, and expensive. An order management system helps prevent delays and creates an overall more positive customer experience. 

What does an OMS do?

An OMS handles everything from processing orders, accepting payment online, communicating with suppliers, tracking orders, coordinating shipment schedules, and processing returns. It can also integrate with customer service to help your business assist customers when they need it, preventing delays in the ordering process.

What is an order tracking system?

An order tracking system is a system that identifies where orders are in the ordering process — either confirmed, processing, fulfilled, shipping, or delivered. With an order management system, you and your customers will be able to track where orders are at every step of this process. This ensures that the customer gets what they ordered on time.