Order Management Software: Benefits for e-Commerce
According to Statista, in 2020, more than 2 billion people purchased goods and services online and e-retail sales surpassed $4.2 trillion worldwide, growing to more than 25%.
COVID-19 pandemic has pushed many customers to buy online as many brick-and-mortar stores across the world are either closed due to lockdown measures or have limited capacities to maintain social distancing.
The unprecedentedly growing demand for buying online and the increased strain on supply chains forced many businesses to re-evaluate how they operate and provide services. Companies started adopting and upgrading their digital solutions to meet the demand, handle increased sales complexity, and keep their customer services at high quality. One of these solutions is e-commerce order management software.
It helps businesses to perform effective order management and fulfillment and ensures smooth and timely order delivery to their customers. In this article, we explain how e-commerce companies can benefit from order management software.
What Is E-commerce Order Management?
E-commerce order management is a complex back-end process of order management and fulfillment launched when a customer places their order online. It involves a variety of stages from order receiving, to its routing, shipping, delivery, and even product replacement in case of any defects.
Order management is never an isolated process, many company departments and sales partners from customer service to warehouse staff, shipping companies, and others contribute to successful goods delivery. Each order management stage generates a wealth of information and it depends on the company how effectively it uses the data to track and perform goods delivery. To alleviate this challenging practice many businesses integrate custom e-сommerce order management software into their business.
A well-tuned e-commerce order management system (OMS) is an essential component of any B2C and B2B business. It helps to:
- establish a smooth and quick product delivery;
- organize an omnichannel business-customer interaction;
- effectively track inventory, supply chains, stock levels across warehouses;
- receive timely analytics and insights on how to improve order fulfillment service;
- coordinate company’s work with third-party logistics providers, and much more.
How Does E-commerce Order Management Work?
The key goal of e-commerce order management is to ensure successful and timely product delivery. It usually comprises several steps and non-stop communication among the company’s departments and various logistics providers. Although the process may vary from company to company, generally it can be divided into the following stages:
- A customer places an order using a website, mobile app or does it in-store. The order management system (OMS) stores customer details, including order history, payment preferences, etc.
- The OMS generates the sales order and sends it together with the payment notification via email or to a mobile app.
- The company sends the order details to its warehouse. The warehouse checks its stock level and confirms product availability. If there isn’t enough inventory, the warehouse turns to the purchasing department to add the items.
- The warehouse sends the order to the accounts department for recording the order in the ledger and invoice generation if the purchase wasn’t paid.
- The warehouse staff picks, packages, and ships the order. Order shipment can be fulfilled by a third-party shipping service, then the OMS connects the service and makes a reservation for delivery.
- As soon as the order is dispatched, the customer receives the confirmation. Often, e-commerce businesses allow their customers to track the order delivery process in the mobile app or via the website.
- The company can check the inventory level in their warehouse and contact their suppliers for a restock.
- The customer receives and confirms the purchase. The company checks customer satisfaction with the delivery.
- If the customer isn’t satisfied with the purchase, they can raise an issue via the company’s channels, e.g. social media, emails, etc. Then the company provides a refund or offers other solutions.
Key Features of Effective Order Management
When establishing their order management systems, companies should search for solutions that can support their existing infrastructure and facilitate various order management processes. Here are the key features that make order management effective:
- Process automation
Many e-commerce companies shift to digital solutions to eliminate paperwork in the company. A powerful OMS goes further than that, it automates many manual processes from calculating shipping costs to sending invoices and fulfillment requests. Therefore, OMSes help businesses to speed up the order management work, warehouse management processes, and others, turning them into a one-click solution and minimizing the possibility of human error.
- Multi-channel sales order management
For effective selling, many e-commerce businesses establish several sales channels. They include a website, e-commerce store, market platforms, mobile apps, and others. Each channel can have its own way of order processing as well as different customers. A robust OMS integrates all these channels into one user interface, providing an overall view of items purchased, customer data, orders data, etc. This allows providing more personalized service to customers as well as better synchronizing order management processes.
- Support of order volume growth
With OMSes businesses can significantly increase the number of orders they can process. Meanwhile, the system won’t require more staff for effective order management and fulfillment. This way, companies can expand their services without relying on the size of their order management teams.
- Replenishment analytics
For every e-commerce company, it’s essential to maintain the stock balance, avoiding over-stocking or under-stocking their warehouses. Some OMSes can predict the number of goods the company needs to request to keep up with the demand fluctuations in the market.
- Access to cross-border e-commerce
Many e-commerce businesses operate in the international markets. Thus, they need to consider that their OMS will be able to process cross-border orders, e.g. payment in diverse currencies, document management, delivery options, etc.
- Integration with other e-commerce systems
An effective OMS should be able to integrate with other digital solutions installed across the company’s infrastructure, service providers, accounting systems, supply chain management systems, and others. This way, the order management process becomes more visible and accessible across departments, ensuring its seamless and error-free operation.
Challenges of Order Management Software
Order management software offers a myriad of benefits for e-commerce businesses. Nevertheless, their adoption can come with some challenges.
When choosing an off-the-shelf OMS solution, the main obstacle an e-commerce company can encounter is the inability of such software to meet the business needs of a particular company. For example, some solutions can have features companies won’t use in their daily order management processes, or they can miss some essential functionality, etc. Another challenge is complicated implementation when a company faces issues with system integration and the absence of ongoing system support.
All these issues can be easily solved with custom order management software development. A software development vendor will build the software that 100% meets the requirements of a specific company, providing the functionality they need. Moreover, the software development team will help to integrate the solution into the digital ecosystem of the company and provide the needed support.
SCAND Experience in Developing Order Management Systems
SCAND has extensive experience in developing custom software for companies of all sizes operating in the e-commerce sphere, including order management systems, supplier management systems, procurement management systems, inventory management systems, and others.
E-commerce is experiencing rapid growth in the industry with a 25% increase in e-retail since 2020. In the conditions of high order volume, e-commerce companies are striving to keep their services at a high level and satisfy their customers’ demands in the best way. That’s why many e-commerce businesses started optimizing their digital infrastructure. One of the platforms that help to significantly automate and alleviate management processes in e-commerce is order management software. It allows businesses to quickly process the received orders and arrange goods delivery safely and in time, resulting in higher customer satisfaction and better retention. If you are in need of developing a custom order management system, feel free to contact us to get a quote.