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7 benefits of using an OMS
The benefits of using an OMS include improving customer service. Using an OMS can also improve operational efficiency and strengthen a company's competitive edge in its market.
An order management system can help companies that depend on customer orders improve their efficiency in multiple ways.
An OMS automates the entire customer order lifecycle, from the time a customer places an order to final delivery. Companies that typically rely on this business model include online retailers, manufacturers and wholesale distributors -- all types of organizations that can potentially improve their operations with an OMS. As customer demand grows, the OMS can adapt to meet a company's evolving needs.
An OMS can help companies drive operational excellence, improve customer satisfaction and lay a foundation for long-term growth.
Here's more about the benefits of using an order management system.
7 advantages of using an OMS
Although it is occasionally confused with ERP software, an OMS addresses a narrower set of requirements. An OMS focuses on centralized order processing, automation of order-to-cash (O2C) workflows and the ability to quickly check the status of customer transactions, which can help companies improve their operations.
The following are some other key OMS benefits.
1. Centralized order processing
One of the benefits of using an OMS is the software's ability to consolidate orders from multiple sales channels into a single platform, whether those orders come from an e-commerce website, retail stores or online marketplaces. This centralization eliminates the need for manual data entry across multiple systems, which can help reduce errors and save time.
Real-time updates help companies track and process orders, leading to faster fulfillment and responses to customer inquiries.
2. Improved inventory management
An OMS provides organizations with greater control and visibility over their inventory. By synchronizing inventory levels across all channels, an OMS makes sure that stock data is always accurate and up to date. This functionality reduces the risk of stockouts, overselling or overstocking, which can negatively affect customer experience and erode profit margins.
Most OMS software includes extensive inventory reporting and offers predictive insights that help company leaders forecast demand, optimize stock levels and make data-driven purchasing decisions.
3. Improved customer experience
An OMS can directly contribute to a better customer experience. Features like real-time order tracking and automated shipping notifications keep customers informed about order statuses at all times.
An OMS helps company leaders fulfill customers' expectations, improve brand loyalty and drive repeat business by providing accurate inventory levels and facilitating quick delivery times.
4. Streamlined order fulfillment
Order fulfillment is one of the most critical aspects of the O2C cycle. By integrating directly with warehouse management systems and shipping carriers, an OMS can prioritize orders, automate routing and accelerate shipping.
Faster order processing improves operational efficiency and helps companies meet tight delivery timelines, potentially improving their financial results.
5. Scalability
As organizations grow, managing a higher volume of orders can become complex without the right tools. A benefit that an OMS provides is the ability to scale with that growth. Whether a company experiences seasonal spikes or steady, year-round growth, an OMS can handle increasing order volumes without compromising performance.
An OMS also makes it easier for organizations to grow by expanding to new sales channels. For example, a retailer that wants to increase its revenue by joining new online marketplaces can do so without the added complexity of a secondary order system.
6. Reduced costs
Implementing an OMS can lead to significant cost savings because the software automates labor-intensive processes, which can help reduce manual errors and optimize resources. Streamlined workflows enable organizations to eliminate redundant tasks and reduce operational costs.
An OMS can help company leaders improve profit margins and maintain high customer satisfaction levels by improving the accuracy of inventory data and minimizing returns caused by human error.
7. Actionable data
An OMS compiles data into high-level overviews of order trends, inventory levels, customer behavior and overall performance. The system's centralization of the organization's transactions gives company leaders a holistic view into important data, enabling them to improve efficiency, optimize operations and make more-informed decisions.
For example, company leaders can fine-tune operations and increase profitability by collecting data about peak sales periods, popular products and fulfillment bottlenecks.
What is an OMS?
An order management system helps organizations manage and track orders from creation to fulfillment and post-sales service. The software does so by centralizing order data across multiple sales channels, such as e-commerce platforms, retail stores and marketplaces. It also integrates with inventory, warehouse and shipping systems, and provides automated workflows as well as real-time visibility into order statuses and inventory levels. An OMS helps make sure that orders are processed efficiently, accurately and on time.
In many cases, an OMS is integrated with a company's ERP system. An ERP system is more comprehensive and encompasses finances, fixed assets and HR, among other areas. In contrast, OMS software focuses exclusively on managing the complete lifecycle of a customer order.
James Kofalt spent 16 years at SAP working with SME business applications and was a product manager for integration technology at Microsoft's Business Solutions division. He is currently the president of DX4 Research, a technology advisory practice specializing in ERP and digital transformation.
