Learn More About Order Management System
How does order management system work?
The key to order management includes a series of coordinated steps, dynamic processes, and continuous communication to create a seamless order-to-cash flow. The smoother and faster the flow, the more orders the company can handle, and the faster the business can expand.
- Order Placement
- Order Information Recording
- Order Fulfillment
- Order Entry
- Order Delivery
You can read about these steps in our order management guide.
Why is order management system important now?
Order management affects almost every process in the supply chain. Most businesses no longer have a single order management team within their organization. They include multiple partners, like suppliers, assembly, and packaging facilities, making it easier to lose visibility and control of the order. It results in costly manual processes and mistakes during order delivery. When we consider the increasing amount of orders, an order management system can help manage costs and increase revenue by automating manual processes and reducing errors.
The growing amount of orders also increases the importance of getting structured data from documents. Businesses need to receive and process orders which usually comes in an unstructured format, and convert them into structured data. By obtaining structured data from documents, emails, and other media, order management software can help companies respond faster to orders, deliver quicker, and collect cash earlier.
Today, companies face significant challenges while handling order processes. Top 5 challenges include:
- On-time fulfillment
- Order accuracy
- Scalability: Ability to process more orders faster
- Efficiency: Managing order fulfillment costs
What are the main benefits?
Top benefits of using order management system include:
- Reduced Errors: By automating order management, businesses can deliver orders accurately and reduce errors while collecting order information.
- Faster Processes: Automated order data capturing and handling repetitive tasks continuously can accelerate order delivery processes.
- Improved Customer Satisfaction: With intelligent order management systems, faster and accurate delivery can improve customer satisfaction, which leads to an increase in revenue and customer loyalty.
- Scalable Order Management: While it is getting harder to handle the increasing amount of orders manually, order management solutions are prepared for managing the high number of orders.
You can read more in the related section of our order management guide.
Which industries can leverage order management system?
Order management systems help companies of any scale to handle the supply and demand of their goods in the right place and at the right time. For example, in retail services, order management tools provide multi-channel business services, from order entry and monitoring and inventory stock and logistics to packaging and shipping. While managing orders, top industries that can benefit from an order management system can include:
- Wholesale distribution
- Banking and financial services
- Hospitality and foodservice
- Manufacturing and automotive
Purchase guide: How to choose the right order management system?
You can follow the steps below while choosing the right order management system for your business:
- Define your system objectives and rank them by priority
- Take note of relevant data: The critical order data might include the following:
- Order volume
- Number of SKUs
- Your ideal timeline for implementing new software
- How much time you’re willing to commit to training
- Any details about the software you’re currently using
- Which channels you’re selling on, or planning to sell on
- Research order management software vendors
- Evaluate and score the vendors: You can aim for reducing your list to 2-3 vendors first, and choose the one for your company. During the evaluation, you can consider the following criteria:
- User-friendly interface
- Cost and ease of implementation
- Scalability of the solution
- Vendor support and experience
Consider that a fully integrated order management system should:
- Accept orders and payments from any channel or currency
- Route orders from suppliers considering the location
- Optimize inventory levels across all systems
- Provide order information to suppliers for fulfillment
- Monitor customer orders
- Forecast stock levels to prevent stock-outs
- Work seamlessly with internal functions like accounts receivable and payable to produce invoices and acknowledge payments
From our vendors list above, you can sort and filter leading vendors to focus your more detailed queries with 2-3 vendors.