What is an Order Management System

What Is An Order Management System?

Originally designed for catalog companies, an order management system (OMS) is a software solution that helps retailers manage their business, encompassing the entire life cycles of orders, items and customers.

The features of order management systems, often referred to as ERPs and CRMs, have evolved throughout the years as technology has progressed and consumer expectations have changed. To survive, retailers needed to adopt multiple channels of commerce in addition to the catalog and brick-and-mortar store. These additional channels include ecommerce sites, contact centers, and marketplace presences.

Today, a successful retailer requires a flexible commerce system that delivers an optimal and secure shopping experience across all channels. An effective OMS serves as a central hub for all data and allows the retailer to provide accurate information and fulfill orders via all channels.

Capabilities should include inventory management, order processing, secure payment processing, financial and reporting capabilities (such as Microsoft SSRS), warehouse management, Point-of-Sale (POS) functionality, and more. Marketing functionality should allow for source coding, pricing, and promotions. All channels should communicate with the OMS in real-time. Learn more about these essential features below.

Essential Features for Your OMS


  • Inventory Management

    An OMS should allow for maintenance of stock items to easily change inventory amounts, pricing, bin locations, status, and more within each division (i.e. web, store, catalog, etc). Vendor information and purchase orders should be easily added and viewed for each SKU. Item styles, kit components, and personalization templates can be easily added and maintained in an efficient order management system. Additionally, as changes are made and orders are processed, the system should accurately update all aspects of inventory. These updates should occur in real-time to ensure the order fulfillment process is smooth and error-free.



  • Order Processing

    In an order management system, a user can efficiently enter, process, print, and ship orders. Ideally, the OMS should integrate to most ecommerce software so orders can be received without error. Customer service agents should be able to access existing customers and input new customer information. Whether orders are placed on the web, marketplace, or phone, any discounts or promotional information should be effectively applied . Either way, no matter the source, order processing needs to be as seamless as possible to ensure accurate and timely order fulfillment.



  • Secure Payment Processing

    In a time where data breaches are at an all-time high, protecting your customer data is key. The order management software a retailer uses should utilize payment tokenization to encrypt confidential customer information. Compliance with the latest Payment Application Data Security Standard (PA-DSS) is essential. An OMS should also provide secure customer payment options, such as credit card, check, or gift card. Many customers are wary of entering their credit card information directly on a site, so integration capability to major payment processors (i.e. PayPal) is a must.



  • Data Control including Reporting Capabilities

    With so many things occurring at once in a retail business, control of your data is key. Manual entry of information can be time consuming, whether it is item pricing, customer data, etc. Effective order management systems leverage technology so users can bulk upload thousands of rows of data instantly. Reporting provides a retailer insight into the success of marketing campaigns, efficiency in the warehouse, and more. Barometers allow users and managers to view order and profit information in real time. Additionally, order management software should allow users to pull multiple reports on orders, inventory, accounting, customer data, and campaigns. This functionality should be user-friendly and allow customizations tailored to a retailer’s specific needs.



  • Financial Transactions

    In addition to financial reporting capabilities, the OMS should have the ability to integrate to major financial platforms, such as Microsoft Dynamics GP and Peachtree. It should also contain the necessary accounting functions to efficiently manage your financial data. Functionality that includes General Ledger integration and Accounts Receivable is necessary. A user must also be able to perform additional financial transactions, such as authorizing credit cards, manage customer refunds, reconcile purchase orders, and more.



  • Warehouse Management with Radio Frequency (RF)

    To keep your back end operations running efficiently, warehouse management should be easily managed within your order management software. Warehouse functions such as inventory moves, bin management, cycle counts and receiving are just a few things that should be available to the OMS user. RF Technology makes accurate and efficient warehouse management even easier. Warehouse workers can pick, receive, and adjust stock, physical inventory and cycle counts using wireless handheld devices.


  • Marketing

    Marketing features in an OMS are extremely important to effectively manage your promotions and other customer data. An OMS should allow for easy source code, campaign and price list creation. This ensure marketers can efficiently manage and segment each promotion. It also allows them to effectively track sales and the effectiveness of their campaigns. Users should also be able to perform data extracts of various customer information, such as source codes, order amounts, order dates, and more. This is especially important in marketing for promotional targeting.


  • Real Time Multi Channel Commerce

    Real time Commerce ensures that order and inventory information is updated instantaneously from all channels. Updates from your website(s), call center, and marketplaces such as Amazon should easily flow to and from the OMS. The software should also integrate to third party ecommerce solutions to receive orders in real time. If an online retailer also has a brick-and-mortar store, their Point of Sale (POS) System should provide a streamlined remote selling experience with instantaneous communication to the order management software. The POS system should be user-friendly and secure with reliable hardware components.


However, while these capabilities are crucial in an OMS, it shouldn’t stop there. As the age of digital transformation intensifies, we see instances of retailers suffering to catch up, adapt and transform to technological changes. A shocking number of retailers have even filed for bankruptcy in the last several years, and that trend continues. So why is this happening?

The bottom line is, success in the multi-channel industry now requires an OMS that effectively integrates to all existing front-end channels. Online orders must accurately flow to the backend in real-time. Contact center agents should be able to enter phone and catalog orders with ease. If you sell on Amazon, your OMS should be able to receive those orders as well as send back accurate product information.

As an online retailer, even if you can provide an amazing front end experience, if your back end solution is lacking, your customer’s user experience will fail as well. This is a dangerous position to be in for multi-channel retailers in this age of intense competition and high consumer expectations.

With all of this in mind, it becomes clear that a unified commerce system (or end-to-end commerce system) is essential to success and profitable sales. If a retailer is not able to effectively integrate their commerce systems (i.e. brick-and-mortar store, website, marketplace, contact center) to their OMS, they will not be able to provide the customer an optimized and real-time experience.  And because consumer expectations are as high as ever, a mediocre experience for a shopper may result in a sale, but that shopper will not return to become a loyal customer.

The OMS marketplace offers an abundance of features to choose from, but for robust features, flexibility and scalability, Ability CCS OMS offers the complete package. Contact us to learn more about how Ability can help you drive growth and profitability in today’s digital retail industry.

What is an Order Management System Diagram
Inventory Management Diagram
Order Processing Diagram
Secure Payment Processing Diagram
Data Control Diagram
Financial Transactions Diagram
Warehouse Management Diagram
Marketing Diagram
Real Time Commerce Diagram
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