Every business loves making sales, but processing the paperwork is another matter. Registering transactions, adjusting inventory counts, managing bills and receipts, collecting payments, tracking shipments, handling refunds and calculating taxes are among the numerous paperwork tasks associated with making sales. And the more sales you make, the more paperwork you have to do, making more bookkeeping the seeming price of business growth.
Fortunately, there’s an automated way to handle this process. As your business and sales volume grows, you may be able to save considerable time and labor expense by investing in an order management system. Here’s a look at how order management systems work, how to use them effectively, and what to look for when shopping for one.
How Order Management Systems Work
An order management system (OMS) is a software app that automates the process of order entry, processing and fulfillment. It automatically performs tasks such as recording order information, updating customer accounts to reflect orders, updating inventory levels, confirming shipping preferences, adjusting prices, invoicing and tracking shipments. An OMS system provides a central platform for managing these various tasks. This accelerates order processing, minimizes back orders and delays, enhances customer service and boosts customer satisfaction.
To perform the various tasks they handle, order management systems typically combine databases for product catalogs, inventory levels, customers and order fulfillment. Optimally, OMS systems are integrated with related software apps such as point-of-sale transaction, inventory management and CMS systems. However, they can also be purchased as standalone systems.
Order management systems are widely used in industries such as manufacturing, transportation, food distribution and healthcare. Companies in these industries see significant benefits from using OMS systems to streamline their order management process. For instance, o-ring manufacturer Apple Rubber offers a catalog of products in 8,000 sizes that can be made out of multiple specialized materials such as Viton. Managing orders for all these products piecemeal on a manual basis would be an enormous task and would slow down order fulfillment. Using an order management system to handle orders for a catalog this size vastly simplifies the labor involved, while ensuring that customers receive their orders faster.
Best Practices for Using Order Management Systems
When considering an OMS system, the first step is to analyze your company’s pain points, says digital commerce provider Guidance. One of the preliminary questions to consider is whether you need an OMS system. To determine this, review your current order management process and consider how much order volume you’re handling, whether any steps in your process are repetitive, and how much time could be saved by automating these steps. Additionally, identify any common errors or delays in your process that might be solved by automation. Conducting this review will help you determine what types of order management tasks you might benefit from digitizing, which will let you know what features to look for in an OMS system.
The next step is to simplify the steps in your OMS process, with the goal of organizing your process into an integrated step-by-step procedure that can be automated. Map out the steps in your OMS process. These typically begin with the customer’s shopping experience, proceed through the order placement process and culminate with your payment and shipping processes. Analyze the steps in your process, and identity any points of redundancy with other software apps such as your CRM system where it would make sense to integrate these apps with your OMS program.
After automating your OMS process, you can then streamline the labor tasks involved. Define who will manage your order entry and what tasks they will perform. Ideally, the fewest number of workers possible should touch your orders during the process, so that your automated system can handle the bulk of the process. For instance, in an optimized system, once your point-of-sale representative enters an order into the system, the rest of the process should be handled automatically until it reaches your shipping department. In an e-commerce system, the act of entering the order into the system can even be triggered by the customer themselves when they place their order.
After you’ve defined what tasks your team needs to perform in order to manage your OMS process, the next step is to train your staff how to use your OMS system. Finally, after your system is implemented, it’s important to track its performance so that you can make adjustments and improvements.
Shopping for Order Management Systems
When shopping for order management systems, the most fundamental consideration is whether a given system includes the features you need. Today’s leading OMS systems typically include features that fall into the categories of catalog management, inventory management, order entry, order fulfillment and shipping management. One of the biggest differences between some of the leading systems is that some include catalog management features, while others do not.
You’ll also want to consider whether solutions you’re considering integrate with other software apps you’re already using. Cloud-based solutions that integrate with other popular software, or more comprehensive enterprise resource planning systems that include OMS features as part of a total package, can save you time on installation and maintenance.
Finally, you’ll want to consider cost and do a cost-benefit analysis to see whether a given system is worth your investment. Costs for OMS solutions start as low as about $50 a month for small business solutions such as Orderhive to as much as $1,000 a month or more for premium enterprise solutions. Today’s leading OMS solutions include TradeGecko, Stitch Labs and Seller Cloud.
Processing orders can involve a lot of paperwork, but an order management system can save you time and work. Investing in an OMS system can speed up your order fulfillment process, making your customers happier, while reducing the workload on your staff, so that you and your team can spend less time on bookkeeping and more time running your core business operations.