What Is an Order Management System?

October 1, 2020
order management system

Built for retailers, an order management system is a technology that helps track orders across commerce channels. The system helps with order processing and order fulfillment. It also allows companies to streamline the fulfillment process so that retailers can better manage inventory availability, improve warehouse management, and bolster customer communications.

Some order management systems track orders for brick-and-mortar retailers across their stores. Other order management systems track orders from an online store and in the retailer’s app. And others still, like “omnichannel” order management systems, help companies organize, streamline and fulfill orders across channels.

How Does an OMS Work?

An OMS acts much like the foreman on a construction site, with centralized visibility and information on orders at its control. The system houses the “blueprints” of the retailer’s operations, including each order touchpoint across online and in-store, and all fulfillment centers, including distribution centers and warehouses. The OMS has a complex understanding of each step that needs to happen for each order to be managed effectively, not just individually, but on the whole: the orchestration of inventory management, the selection of the best fulfillment center for each order, the providing of insights to help retailers keep fulfillment costs down, and the delivery of the best possible customer experience.

What’s more, a good OMS doesn’t just organize orders, it also optimizes orders against defined business rules. It can calculate the best order routing, predict how much inventory is needed at specific fulfillment centers, and help retailers determine if setting up a new fulfillment option such as curbside pickup would be valuable. 

Order management systems integrate with other retail technologies and systems in order to keep the entire retail system unified and organized. They pull in inventory information, order data from POS systems in-store and from ecommerce systems, and push information out to logistics services, delivery services, and customer communication technologies like email and content management systems.

The more modern and open the OMS is, the better it can integrate with these systems and offer flexibility for the retailer to customize their order management solution to fit their business.

Benefits of an Order Management System

Today’s retail environment is multichannel or omnichannel, which means that a single customer is purchasing from the same retailer on several channels. These customers have become used to fast and reliable order fulfillment, customer service, and delivery turnarounds. Companies like Amazon have raised the bar of what customers expect from a retailer.

What’s more, retailers are dealing with increasingly complex logistics, a broadening and deepening of customer data, and new fulfillment demands such as curbside pickup. 

The OMS helps with both customer demands and omnichannel logistics, maximizing the customer experience and business operations and ROI in turn.

For example, the order management system can offer real-time inventory visibility that helps store associates locate an item for a customer, and helps an online customer purchase the “last item left” online, with accuracy. The OMS can handle seamless order routing, even for a multi-country retailer with a variety of distribution centers. Better yet, a leading OMS helps retailers eliminate redundancies, understand buying patterns, and support a wide variety of fulfillment types with ease.

warehouse management order management system kibo

How to Choose the Right Order Management System

Some OMS systems are hyper-expansive, and include many features for call centers and brick-and-mortar stores that an online-only retailer wouldn’t necessarily need. For example, some “OMS” technologies are really warehouse management systems (WMS) that were built for the world’s very largest retailers, requiring long lead times to implement, frequent configuration, and large development resources.

Other OMS systems are very lightweight, meant for a small online store with very simple fulfillment options. In between are options built for omnichannel retailers, with varying levels of flexibility and usability.

It’s important to remember that an order management system is an integrated part of the retailer’s technology stack. Therefore, finding an OMS that can easily integrate with the technology a retailer already has in place is important. Look for modern headless software that has open APIs that can allow data to flow easily, and allows for custom workflows between UIs. The best OMS is microservices-based, which allows retailers to select the functionality they need now, without cumbersome extras.

This kind of design also sets retailers up for growth in the future.

And, a good OMS should be designed to handle big changes in volume. The last thing a retailer needs is for their site to crash on Black Friday!

Not only does the OMS have to fit in with existing technology, it has to fit in with the people that will be using it. A good OMS has sophisticated capabilities that are easy to use, even by non-technical retailer and marketer staff. Setting up workflows, opening new fulfillment options, and changing promotions and pricing should be intuitive.

Frequently Asked Questions About OMS

Does an OMS enhance the commerce experience?

The OMS is a logistics powerhouse, helping companies streamline and route orders, keep track of inventory, and meet customer fulfillment expectations profitably. These things go hand in hand with the product information, pricing, checkout, and post-sales experience driven by an ecommerce platform. A great OMS fits seamlessly with the ecommerce system, so that each enhances the customer experience and helps meet business sales goals. 

Is it important that I invest in a modern order management system?

Some people may ask “why now”? The fact is, millions more online transactions occur now than even one year ago. People expect fast and intuitive service, wherever they live. They expect accurate product availability and delivery information. Companies are competing with powerhouse retailers like Amazon, and need technology that streamlines orders effectively to continue to be competitive. Now is the right time to implement a modern OMS that is able to grow with a retailer as they evolve, either by offering new options like click-and-collect, or by expanding their online operations to mobile.

How does OMS affect the customer experience?

The OMS is a backend technology that surely affects the customer experience. Some companies purchase an OMS thinking only about backend logistics, rather than the effect that it has on customer service. But it’s important to get an understanding of what the customer experience is like: when customers are searching for a product or estimated delivery time, or when they are trying Buy Online, Pickup Instore (BOPIS) or curbside pickup for the first time.

Remember that a good OMS helps with customer service and ROI, and so it’s important to understand exactly how it’s designed to meet those two goals.

Brief Introduction to Kibo’s Order Management System

Kibo future-proofs your business with speedy time-to-value, agile operations, and low-tech overhead. It is the modern, headless OMS that works with your business now, and grows with it in the future as needed.

Kibo unifies omnichannel order management in an easy-to-use platform that is microservices-based, so you get exactly what you need, no clunky extras needed.  With so much uncertainty in retail, Kibo is the OMS that you can count on, through the highs and lows of the coming weeks, months, and years.

Our clients like that we offer:

  • Modern headless technology – With enterprise-level flexibility, you can easily integrate Kibo into current tech. With open APIs and data inflow and outflow, Kibo works with your technology now and later.
  • Microservices-based – Get what you need, and adapt workflows to streamline with your current business processes.
  • Advanced order routing – Transform stores into fulfillment centers. Automate routing decisions to optimize for cost and service and make changes with just a few clicks.
  • Dedicated UIs and in-store tools – Get easy-to-use interfaces that help your employees fulfill orders easily and complete sales from anywhere. Quickly add and onramp new users and customize accordingly, without needing technology support.