When customers are spoiled for choices, businesses cannot fail to fulfill orders on time. Unfortunately, for many enterprises, handling the entire process of capturing, tracking and fulfilling orders across multiple channels is tricky and, nearly 55% of small businesses are still living in the bygone era of pen and paper, which only reflects their inefficiencies when handling bulk orders. The technology gap can be cited as one of the reasons why such businesses do not have a proper order management system in place.
When customers shift to the digital space for their purchases, businesses without digital solutions can never aptly engage their end-users. The outcome – increasing customer dissatisfaction and eventually loss of business.
In the absence of a comprehensive order management system software, organizations, most importantly, the e-commerce businesses confront an ocean of challenges, such as: –
- Keeping inventory and orders across multiple channels aligned
- Handling complex shipping schedules and order profiles
- Timely order fulfillment and tracking
- Reporting, analytics, and evaluation
Considering the above challenges, businesses today mostly need a centralized software solution, automating the workflows, starting from receiving orders to shipping them to final users. An inventory and order management software can fill that technology gap.
What is Order Management Software, and How does it Work?
Order management software is a centralized repository tracking inventory, sales, orders and fulfillment. It is a multi-dimensional platform explicitly designed to ease the pressure on employees arising out of a heavy influx of orders or a sudden surge in product demand.
The software of the order management system has multiple touchpoints, including –
- Sale channels
- Product information
- Inventory levels and location
- Suppliers for purchasing and receiving
- Customer service, issues with current orders, returns and refunds
- Order printing, picking, packing, processing, and shipping
An order management system software caters to the following tasks every day for all, including E-commerce, SMEs and big brands: –
Tracking Inventory by Channels
Modern businesses reach customers through various channels and close deals in-store through point-of-sale (POS) software, self-serve using an e-commerce store, or use a combination of online and offline activities, including buying online and pickup in-store (BOPIS).
Most small businesses with poor technological solutions find it hard to track the sheer volume, velocity, and fulfillment of omnichannel orders. But managing inventory flow across multiple channels creates a complex supply chain. Bottlenecks are formed along the way, leaving many customers dissatisfied with the service.
An inventory and order management software can be a blessing-in-guise, helping retailers easily manage inventory across the multiple channels they are selling through.
The platform helps businesses to: –
- Update inventory levels across all sales channels
- Understand which stock keeping unit is performing and restock accordingly
- Get insights on which products are selling more by region or channel
Automating the Order Fulfillment Process
This is probably the main reason why order management software is needed. Automating internal processes from order to fulfillment ensures timely shipping and delivery, irrespective of customers’ locations.
Besides receiving and processing buyer orders, the OMS platform caters to a horde of other tasks integral to any e-commerce business. Such tasks include: –
- Accepting payments regardless of destination or currency
- Sharing order information with distributors for the fulfillment
- Printing shipping labels when fulfilling orders in-house
An OMS can route customer orders from warehouses based on proximity to the destination and scales cross-border sales.
Logistics is crucial for every product/service-based organization and needs a centralized system to handle the workflow, much like an order management system. However, very few are aware of the reverse logistics concept.
Reverse logistics refers to the flow of goods backwards – from customers posting an item in return to processing a refund for the initial purchase. And businesses have to handle many instances where an unsatisfied customer raises a ticket against recent purchases and requests a return and refund. Here lies the catch – return orders do not transcend into lost customers. Instead, as per statistics 96% of the same customers are likely to return for more purchases if the return and refund process is smooth and hassle-free.
Order management system software automatically processes the return once the ticket is raised and ensures the refund reaches the customers as promised, usually within 24 hours. Further, with the help of the same OMS platform, customers can easily track the status of their returns.
Managing Customer Information
An order management system solution not only caters to handling customer orders, but it can also serve the purpose of the organization’s virtual customer relationship management assistant. Since it is a centralized platform comprising all information related to customers, businesses can use the same insight to engage the same buyers for a long time. Information such as customers’ previous orders, lifetime value, and location is pure gold for businesses when trying to secure another sale from the same buyer with hyper-personalized offers.
Obviously, each customer segment will have a unique marketing strategy. Hence, businesses can strategize based on their purchase history and develop more special offers to keep the buyers engaged and satisfied. And the latter becomes an indirect channel for sourcing more potential leads for the business.
A study says hyper-personalized offers yield 10% to 15% higher conversion rates. This is made easy with customer reports and insights automatically generated and recorded inside an OMS.
Merging Order and Fulfillment Data
One of the essential requisites of an ideal order management software should be its ability to handle backend processes, most importantly overseeing finance and accounting. Automating the financial reporting area of your business will paint an accurate picture of whether your endeavor is profitable or not.
Most OMSs do not generate accounting statements but pull information from the accounting software and merge it with inventory and sales data. This provides insights into accounts payable and receivable. However, order management solutions automate invoices and purchase orders to end bottlenecks from slow manual order processing.
Best Order Management Software for Small Business
When choosing the ideal OMS solution for one’s own business, it is best to carefully consider the prerequisites, match them with the features offered, and then sign the deal.
A robust order management software should have the following features: –
- The software should be cloud-based for easy accessibility of all information from anywhere and anytime.
- It should be responsive enough to offer real-time enterprise inventory visibility across all fulfillment sources.
- It should grow with the business and be flexible enough to adjust to fluctuations in the sales cycle or changes in customer expectations for accessible accommodation, irrespective of how many customer requirements are handled or how varied the requirements are.
- An effective OMS solution should automate the route orders, fulfilling them from the most reliable and practical sources.
- An ideal inventory and order management software should effectively track, monitor, and manage lists and stock pile-ups.
- The OMS operates on a single platform, seamlessly integrating numerous sub-systems to fulfil customer orders.
- The same platform should ensure visibility and provide accurate information to the end customer as and when needed.
- It should automate payments, invoices, and other backend processes, including financial statements.
- Order management software should accommodate reverse logistics, ensuring customers get timely refunds and track returns when needed.
- Finally, a robust OMS should follow equally robust safety and compliance measures. There should be options available to validate addresses or counter fraudulent acts.
The Final Notes…
Order management software finds its application across industries dealing with bulk inventories and order fulfilments daily. Even though small businesses might not face the same rush as the big brands, an automated and digitized solution can save many hours and businesses lost due to unfulfilled or delayed orders.
The market is loaded with OMS solution providers, but not all offer the same value or feature. Hence, enterprises should understand the type of OMS their business needs and match the same with features provided by third-party providers before making a selection.