What is order management software?

The customer journey doesn’t end when a shopper makes a purchase. After a customer clicks the “buy” button, a complex series of events needs to happen to ensure that the products arrive safely and quickly at their doorstep. And that’s where order management software comes in. Order management software helps businesses manage the entire order fulfillment process, from the moment an order is placed to when it’s delivered.

Here’s everything you need to know about order management software and its features, benefits, and the ways it can transform your business operations.

• Order management software defined
• Features of order management software
• Benefits of using order management software
• Order management system (OMS) vs. order management software
• Order management software vs. inventory management software
• Challenges of implementing order management software
• Choosing the best order management software
• Get started with order management software

Order management software includes all the tools that can help you manage the entire order lifecycle. This encompasses technology that enables inventory management, order routing, self-service order tracking, as well as the reporting and analytics tools that give you visibility into the entire process.

Order management software conducts the order fulfillment process, providing a single platform to manage all aspects of your supply chain. Need an accurate view of how much inventory you have on hand? Order management software can help. Want to give your customers more visibility and transparency when it comes to shipping and delivery? Order management software can do that, too. Ultimately, these tools help businesses save time, reduce costs, and improve customer service by automating tasks and providing real-time updates.

Order management software should come with a comprehensive suite of features that help you streamline and optimize the order fulfillment process. Here are the key features that make order management software a valuable asset for your company.

Effective inventory management is crucial for a positive customer experience. This is what helps you avoid “out of stock” notifications when customers are ready to make a purchase. Order management software should offer real-time inventory tracking capabilities so you have accurate visibility into your stock levels. This prevents overselling, stockouts, and ensures that customers receive their orders promptly. Advanced inventory management features include inventory forecasting, reorder point calculation, and inventory allocation, helping businesses optimize their inventory levels and reduce carrying costs.

Efficient shipping and fulfillment processes are essential for customer satisfaction and on-time delivery. Order management software integrates with various shipping carriers, which gives you the ability to compare shipping rates, select the most cost-effective options, and easily generate shipping labels. It also automates fulfillment processes like order picking, packing, and shipping, which reduces manual labor and human error, and increases efficiency.

Your customers crave transparency and they want to be able to track their orders in real-time. Order management software equips you with powerful order tracking features, allowing your customers to monitor the status of their orders from the moment of purchase to delivery. This heightened visibility boosts customer satisfaction, minimizes inquiries, and fosters trust in your brand. It also means you can minimize potential errors in the fulfillment process by promptly intervening and proactively communicating with your customers.

With order management software integrated with your CRM, you can manage your customer relationships more effectively. These tools centralize customer information, including order history, preferences, and communication history, to give you a complete view of each customer's interactions with your business. This makes it much easier to track orders and accurately communicate with customers about order details.

Data-driven choices are key if you want to pinpoint areas for growth and improvement. The right order management software will provide comprehensive reports and analytics, highlighting order fulfillment, inventory turnover, shipping expenses, and customer trends. With these insights, you can make informed decisions, fine-tune your processes, and propel your business forward.

As your company grows, order management becomes more complex. Order volume increases, you ship to new locations and onboard new supply chain partners, and the entire operation expands. Order management software offers numerous benefits that make the process easier and more efficient. Here’s how.

One of the most common customer inquiries is, “Where’s my order?” Thankfully, order management software makes it easy for shoppers to monitor their orders, receive shipping and delivery updates, and access the information they need, leading to increased satisfaction and loyalty. It also frees up your service reps’ time so they can cross-sell, upsell, and answer more complex questions.

Order management software (OMS) can yield substantial savings by automating tasks and minimizing manual labor. An OMS streamlines major parts of the process, including order processing and inventory management, which means you can redirect valuable resources toward more growth-focused initiatives. This can also help businesses reduce inventory carrying costs by optimizing inventory levels and mitigating the risk of overstocking or stockouts.

With task automation provided by order management software, you can move faster while eliminating manual errors. This technology also provides a centralized platform for managing orders, so you can reduce processing times and improve overall operational efficiency.

Order management software offers invaluable insights into inventory levels, empowering you to make well-informed stock replenishment and allocation decisions. It's a powerful tool for preventing overselling, optimizing inventory turnover, and minimizing the risk of stockouts. Maintaining optimal inventory levels can boost customer satisfaction, cut carrying costs, and enhance cash flow.

Order management software equips you with the tools and capabilities to handle growing order volumes and increasing complexity as your business expands. Robust software should easily integrate with other systems you already use, such as ecommerce platforms and accounting software. This ensures a smooth flow of information and gives you more visibility to make informed decisions. Investing in order management software sets your business up for growth and expansion without sacrificing operational efficiency.

When it comes to order management, two terms are often used interchangeably: order management systems (OMS) and order management software. However, there are nuances and understanding these differences will help you optimize your fulfillment processes.

Order management software is a broad category of tools and applications designed to help businesses manage the entire fulfillment process. These solutions typically offer a suite of features, including inventory management, shipping and fulfillment capabilities, order tracking, and customer relationship management (CRM) functionalities. By centralizing and streamlining order-related information, order management software gives businesses real-time visibility into these operations.

In contrast, an order management system (OMS) is a more specialized type of order management software designed to meet the needs of larger enterprises and more complex supply chains. OMS solutions are typically more comprehensive and robust, offering advanced features such as demand forecasting, warehouse management, multi-channel order fulfillment, and integration with various back-end systems. OMS platforms are built to handle high order volumes, complex fulfillment processes, and sophisticated inventory management scenarios.

By evaluating your business's needs and operational complexities, you can determine whether order management software or an OMS is the right solution to enhance your order fulfillment capabilities and achieve operational excellence.

Order management software and inventory management software are both crucial, but each serves a distinct purpose and offers unique capabilities. Inventory management software is primarily concerned with tracking and managing stock levels, while order management software encompasses a broader range of functions related to fulfilling customer orders. Inventory management is typically a part of a wider, more robust order management system.

Order management software is designed to provide you with a comprehensive view of your order fulfillment process. It gives you the ability to monitor the status of orders, track shipments, and manage customer interactions related to the fulfillment process. It also offers more robust automation capabilities, such as generating shipping labels, sending order updates, and managing returns. By integrating with other systems, such as ecommerce platforms and accounting systems, order management software provides a centralized platform for managing all aspects of order fulfillment.

Order management software also empowers you to respond to customer inquiries promptly, provide accurate order tracking information, and handle exceptions efficiently. By offering a seamless and transparent order fulfillment process, you can build customer trust and loyalty, increasing satisfaction and repeat business.

For comprehensive order fulfillment capabilities, enhanced visibility, robust automation, and improved customer service, order management software is the ideal solution. However, if you are primarily focused on stock management and inventory control, inventory management software will meet your requirements.

The benefits of order management are clear, but implementing it can be challenging. Here are some of the most common hurdles businesses face when adopting this order management software.

One of the most significant challenges? Cost. The price tag includes licensing the software, making any necessary customizations, integrating with the rest of your systems, and training your team. Maintenance and support are also considerations when it comes to the cost of order management software.

The complexity of integration is another challenge. You might be using different software for inventory management, customer relationship management, and shipping. Integrating these systems with your new order management software can be a complex process that requires a lot of technical know-how and resources.

Lack of in-house expertise can also be a barrier to successful order management software implementation. Many businesses may need to hire more employees on their IT and development teams for the technical skills and knowledge required to configure, manage, and maintain the software. Some businesses also work with implementation partners.

Data security is also a top priority when implementing order management software. The software manages sensitive customer information, such as personal data and payment details. Ensuring robust data security measures are in place to protect this information from unauthorized access or breaches is paramount.

Finally, the resistance to change from your employees can be a challenge during the implementation of any new software. Your teams have likely become accustomed to the technology you currently use, so you’ll need to train, reskill, and encourage them to use new software effectively. Overcoming resistance to new tools requires effective change management strategies, clear communication, and comprehensive training to help employees understand the new system's benefits and how it will improve their daily tasks.

By thoughtfully addressing these challenges and developing strategies to overcome them, businesses can effectively implement order management software and optimize its potential benefits.

Choosing the right order management software:

Choosing the right order management software is a critical decision that can make a big impact on the efficiency and overall success of your business. When you're ready to make this decision, consider a few key factors.

Current needs:

First, it's important to evaluate your current needs, future goals, and the complexity of your business. And keep in mind that not all order management software solutions are created equal; the best fit for your business will depend on your unique needs.

Order management software features:

Once you have a good idea of what you need, it's time to start evaluating the features of different order management software solutions. You'll want to look at inventory management, shipping and fulfillment options, order tracking, and customer relationship management (CRM) integrations.

Integration with existing systems:

In addition to features, it's essential to consider how the order management software will integrate with your existing systems. As you consider potential partners, you'll want to ensure their software can easily integrate with your ERP, ecommerce platform, and other relevant applications. Seamless software connections ensure that your systems work together and that they share data between each other, which means that your business will run smoothly.

Cost and support:

Finally, the cost and support level associated with each order management software option should be carefully evaluated. Consider the total cost of ownership, including software licensing fees, implementation costs, maintenance charges, and ongoing support services. Additionally, assess the quality and responsiveness of the vendor's support team to ensure that you receive timely assistance and guidance whenever needed.

By carefully considering these factors, you can make an informed decision about your order management software. This strategic approach will optimize your order fulfillment processes, improve customer service, reduce costs, and, ultimately, support the sustained success of your business.

When it comes to order management software, what makes one solution better than the others? It all comes down to your business goals and unique needs. To meet a wide range of needs, consider robust order management software that can provide the seamless service of omnichannel orders, centralize order data, simplify complex order routing, and offer insights with real-time inventory management.