Order management involves tracking and coordinating orders from inception to fulfillment, ensuring efficient processes among teams, software, and partners. The goal is to provide quick, accurate delivery—optimizing business capacity and customer satisfaction through technology-enhanced systems.
For a customer placing an order, the entire process may seem like a straightforward two-step system: They make a purchase and then they receive their package. But there’s a lot that happens between clicking the ‘buy’ button and getting confirmation of delivery. Orders placed through your eCommerce platform must be validated and sent through to those who manage your inventory for picking, packing, and shipping. The order then must be tracked and its status updated as it makes its final journey to your customer’s doorstep.
In other words, from click to conclusion, that order will likely interact with potentially dozens of different processes and tools. And as your business grows and your customer base expands, managing these orders may not be possible without an effective order management system.
An order management system (OMS) is a software platform designed to support effective order management by empowering organizations with more complete control and visibility throughout the lifecycle of an order. High-quality order management systems can track all the information and processes associated with the order management cycle, including:
- Order capture
- Inventory management
- Fulfillment
- Post-sales follow up (including returns, refunds, feedback, and other support tasks)
With the right order management tools, your business gains the capabilities it needs to access and manage customer orders at scale, all from a single, centralized location easily and accurately. Effective OMS options are likewise designed to integrate with your other essential tools and platform, such as your eCommerce platform, giving you more control and visibility over the entire ordering process.
Integrations in an order management system refer to the interaction between the OMS and other software applications or platforms. These connections enable the automatic exchange of data and coordinated processes. Properly employed, integrations have the power to enhance efficiency, reduce manual work, and provide a more unified view of ordering and related operations. Integrations are crucial for modern businesses dedicated to streamlining their approach to order management and improve the overall customer experience. Key integrations include:
- Enterprise resource planning
Enterprise resource planning (ERP) systems manage and integrate essential parts of a business, including planning, purchasing, inventory, sales, marketing, finance, and human resources. An OMS integration with an ERP system allows for real-time inventory updates, financial reporting, and synchronization of order data across departments, ensuring all parts of the business are informed and aligned. - Customer relationship management
Designed to manage a company's sales interactions with current and potential customers, customer relationship management (CRM) software uses data analysis about customers' history with a company to improve business relationships. Specifically, CRM focuses on customer retention and driving sales growth. Integrating a CRM with an OMS helps ensure customer order history and preferences are included in sales strategies, leading to a more personalized customer experience. - Configure, price, quote
Configure, price, quote (CPQ) software helps sales teams quickly produce accurate, configured quotes. This makes it easier to price complex products that have many variables. By integrating CPQ with an OMS, businesses can ensure that the sales process is streamlined, and customers receive accurate and timely quotes, improving the order conversion rate. - Billing software
Integrating billing software with an OMS simplifies the financial transactions associated with order management, ensuring accurate and prompt invoicing, which improves cash flow and reduces administrative overhead. - eCommerce platforms
Online systems that enable businesses to sell products and services, eCommerce platforms can be integrated with OMS tools to allow for automatic order capture, inventory updates, and order status tracking directly from the online store. Coordinating eCommerce solutions with OMS technology creates a more intuitive and friction-free shopping experience for the customer.
As previously addressed, there are many different systems and functionalities involved in the order management process. OMS solutions must be capable of aggregating these systems and functions in a way that is both powerful and intuitive. To help you manage your order and track your inventory in real-time, top order management systems include the following features:
Maintaining the correct inventory amounts is a major concern for most online businesses. This includes having enough inventory on hand to meet current demand and forecasting future demand to be prepared for dips and spikes in orders throughout the year.
Overstocking on inventory is not an effective solution, as it can lead to increased storage costs, displace other inventory from valuable storage space, and lead to dead stock being left indefinitely on warehouse shelves. And understocking can be just as problematic when it results in backorders and delayed shipments.
A good OMS gives you better insights into managing your inventory. By recording historical data and generating easy-to-follow reports, the OMS gives you insight into buying patterns, upcoming trends, and seasonal fluctuations. This can help your business make informed decisions about what kinds of inventory to keep on hand, and in what amounts.
Order management extends into the eCommerce sales process, collecting and aggregating sales data for further monitoring and analysis. These sales integrations also connect with inventory management, helping ensure that there is enough stock on hand to fulfill any orders that may be placed across any of your supported channels (eliminating the risk of unanticipated stockouts)
These insights allow you to better coordinate your marketing and sales efforts from a single location. Develop a clearer picture of what is selling and what is not, when specific inventory items are selling, whether there are any geographical variables involved, and which marketing initiatives are having the desired effect.
With the rise in eCommerce and home delivery, order tracking has become more than just a key differentiator; it’s a necessity. Customers want to know where their order is, what day and time it is expected to arrive, and whether they should be prepared for any delays.
With order tracking capabilities, OMS solutions keep a constant check on the order's location and its next steps in the delivery process. Customers can access your system to get important updates and ETA forecasts. And should an order become stuck at an international border or get otherwise delayed, you’ll have the information you need to resolve the issue quickly and get your customer’s order moving again.
Proper customer support in order management depends heavily on your ability to keep and access historical order information. When an issue arises—such as a package not being delivered or being delivered late—your customer service team will be up against the clock to track down the relevant order and provide an acceptable solution quickly.
An OMS can help teams locate order information at the click of a button. Many are designed to integrate with existing customer support software and allow fulfillment teams to locate and resolve human errors introduced during the ordering process. And as previously stated, OMS solutions also provide better customer visibility by making it possible for recipients to see the location and delivery estimates for their orders in real-time.
If you want to get their journey off on the right foot, you need to meet your customers where they are. Forcing customers to make orders through only one or two prespecified channels can harm the customer experience and may drive away potential buyers who are looking for more options.
Omnichannel and multichannel support through your OMS provides a solution. Multichannel support means giving your customer enough options to meet their needs. Omnichannel takes this concept further, by bringing together all available channels to provide a consistent buying experience across every interaction and point of contact—regardless of the channels the customer chooses to use.
As soon as the customer finalizes their purchase, the clock starts ticking. Manual shipping processes slow everything down, adding precious days to your order delivery times. OMS options can cut out many of the time-consuming steps involved in preparing an order for shipment.
Automated solutions within the OMS allow orders to be verified and sent directly to fulfillment center locations. An OMS can also help determine optimal shipping routes and auto generate shipping labels to get everything underway. The OMS will also assist in creating and tracking returns, should a customer decide that they don’t want the product.
A small online business generally has low enough order volume to make tracking and visibility a non-issue. But as your business grows, retaining visibility over your orders can become untenable without the right data analytics tools.
From geographical details to historical insights, order management tools collect and refine order, inventory, and sales data to give you a complete view of your ordering process. Identify strengths and weaknesses in your systems. Analyze and discover the factors responsible for high and low order volume. Improve your supply chain efficiency by identifying bottlenecks and other issues. And apply analytical insights to make data-driven decisions to optimize your shipping strategy.
The order management process is a comprehensive cycle that starts from the moment a B2C or B2B customer places an order and does not end until the buyer is satisfied with their purchase. This process ensures that orders are fulfilled accurately, efficiently, and to the satisfaction of everyone involved. Although individual organizations may approach order management slightly differently, most will follow a similar process:
While there are many steps in the order lifecycle that must occur first, order management doesn’t begin until the customer submits an order with your business. The order is received, payment is collected, and order details are sent to fulfillment staff so that they can locate and prepare the orders for shipment.
- Picking
The items included in the order are located from among the rest of the inventory and set aside. Because many online businesses rely on warehousing for their in-stock inventory, the picking process may be extremely complex and involve several teams and strategies designed to optimize how inventory items are located and tracked. - Packing
Packing involves everything related to preparing the items to be shipped. Orders must be packed well so that the items are not likely to suffer damage during transit. The order’s packaging must also comply with all shipping regulations. Finally, packaging resources must be used efficiently so as not to create unnecessary expenses. - Shipping
Once the order is properly packaged, it must be shipped to the customer. Shipping teams are responsible for generating and attaching correct shipping labels, invoicing the order, updating the order status, and sending shipping confirmation and tracking details to the customer.
Often, B2B ordering is more complex than standard B2C, incorporating other forms of order fulfillment. In these cases, entire series of steps need to be orchestrated and managed, potentially including installation of delivered orders and provisioning of services and other resources. Types of B2B order fulfillment include:
- Just-in-time (JIT) delivery
Products are delivered only when they are needed, minimizing inventory holding costs and storage space requirements. This method relies on accurate demand forecasting and efficient logistics to deliver goods precisely when they are needed for production or distribution. - Vendor-managed inventory (VMI)
The supplier manages the inventory levels at the customer's location, monitoring stock levels and replenishing inventory as needed. This allows the client to focus on their core operations. - Cross-docking
Goods are unloaded from inbound transportation and loaded directly onto outbound transportation, eliminating the need for interim storage. This method reduces inventory holding costs and speeds up the order fulfillment process by bypassing traditional warehousing. - Kitting and assembly
Kitting involves bundling individual items together to be sold under a single SKU, while assembly refers to the process of putting together components to create a finished product. Both kitting and assembly are often employed together in B2B order fulfillment, especially for customized or complex products. - Drop shipping
Client orders are fulfilled directly from the manufacturer or wholesaler, bypassing the need for the retailer to stock inventory. When an order is placed, the retailer transfers the order and shipment details to the supplier, who then ships the product directly to the customer. - Customization and personalization
B2B customers often require customized or personalized products to meet their specific needs. Order fulfillment processes must accommodate customization requests, which may include product configuration, branding, or packaging tailored to the customer's requirements. This ensures that the delivered products are as close to 'shelf-ready' as possible.
After the order is dispatched, inventory levels must be updated to maintain accuracy. Effective inventory management allows businesses to forecast demand and avoid issues that can otherwise increase costs or lead to dissatisfied buyers (such as overstocking and stockouts). For manufacturers or businesses involved in production, inventory data plays a leading role in planning and forecasting.
The final phase in the order management process involves engaging with the customer after the sale is complete. This stage covers handling returns, exchanges, and refunds, and may include reaching out to customers to solicit feedback on their product experience. Additionally, it's an opportunity to manage post-sale customer commercial changes, such as modifications to orders, and to explore up-sell or cross-sell opportunities. OMS solutions apply support and automation features throughout this entire process, promoting efficient use of resources, improved collaboration, and unmatched visibility to improve delivery times and customer satisfaction.
Customers are the lifeblood of any company. For online businesses, ensuring customer satisfaction means accurate inventory, shipping visibility, and prompt delivery. There is nothing more important than the moment your client receives their shipment and successfully completes their ordering journey. But with increased ordering and tracking options, customer expectations have grown exponentially.
Order management empowers your organization to meet those expanding customer expectations. Omnichannel support offers a seamless and convenient customer experience and gives them the freedom to make purchases in the way that they are most comfortable (and most likely to follow through). Tracking and analytics place your processes under a microscope, rooting out inefficiencies and reducing your delivery times. Inventory management and sales integrations help ensure that you always have stock on hand to meet demand. And through it all, OMS solutions help coordinate the various teams and systems involved in serving the people who keep you in business.
The result? Increased customer satisfaction, leading to increased orders and more revenue to help grow your business.
Effective order management is an essential investment for any growing or established eCommerce company that wishes to remain competitive. Specific benefits include:
Demand forecasting is an integral part of any OMS and is particularly important when preparing for a new product launch. OMS solutions help ensure that the right inventory levels are on hand and ready to ship to meet initial demand and fulfill on preorders.
Complete visibility into tasks and order line details gives teams the power to find and eliminate inefficiencies across the order lifecycle. This means that agents can accomplish more in less time, bringing in more revenue, more quickly.
Customers want fast delivery, but they also want to be kept in the loop. The best OMS options allow buyers to log into their own customer portal to track orders, check estimated arrival dates, and create cases when necessary. By providing these services, order management tools reduce customer frustration and contact volume, increasing their satisfaction with your company and their overall experience.
Optimizing the order management process presents several opportunities for organizations to enhance their efficiency, reduce costs, and improve customer satisfaction. Consider the following:
Handling returned items efficiently ensures that sellable goods are quickly reintegrated into the inventory and damaged goods are appropriately processed to avoid recirculation. Developing comprehensive standard operating procedures (SOPs) for returns management can help businesses recover value and maintain customer trust. Leveraging an OMS to automate and streamline the returns process simplifies these tasks.
Real-time inventory visibility is foundational to accurate inventory management and forecasting—it also directly impacts customer satisfaction. Businesses must ensure that their inventory status is transparent across all sales channels and fulfillment centers. Integrating an OMS with inventory management solutions can provide a real-time view of inventory levels, helping to avoid shortages and surpluses and enabling more accurate forecasting to meet changing demand.
Excess costs associated with mismanagement, inaccurate shipments, and inefficient shipping methods can significantly impact a business's bottom line. Companies can minimize these costs by optimizing inventory management and utilizing cost-effective shipping solutions. For example, implementing an OMS that selects the closest fulfillment center to the delivery destination can significantly improve margins by cutting down on transportation expenses.
As businesses expand, the complexity of managing and fulfilling orders grows due to increased product and service offerings and a larger customer base (which necessitates more extensive inventory and warehouse space). Also, managing the transition between stages such as order capture and order fulfillment requires careful coordination, workflow automation and orchestration, to minimize manual intervention. Implementing an integrated OMS that works easily with ERP, CRM, and other integrated systems can simplify these processes. By automating and centralizing order management functions, companies reduce the risk of errors and streamline operations to better manage the complexity that comes with growth.
Consolidating order management, CRM, CPQ, post-sales service, and other essential tools into a single platform creates a unified, single source of truth for organizations to work from. This enhances data accuracy, optimizes workflows, and improves cross-functional visibility. By reducing the need for multiple systems, companies can achieve greater operational efficiency and a more cohesive customer experience. Furthermore, platform integration simplifies training and support requirements, allowing teams to focus on strategic tasks rather than navigating complex software landscapes (for better resource utilization and increased productivity).
As with most businesses processes, order management has the potential for improved efficiency and accuracy through the application of strategic optimization. By leveraging automation, businesses can streamline complex operations, reduce the likelihood of human error, and ensure a more consistent flow from order capture to fulfillment. Key benefits of applying automation to order management include:
Automation simplifies the transition from quoting to order creation, making it faster and more efficient. This process, often cumbersome when done manually, can benefit from automated systems that ensure quotes are accurate and quickly convert them into orders. This not only speeds up the sales cycle but also reduces errors, leading to more satisfied customers and increased sales.
Using eBonding technologies like ServiceNow Service Bridge, businesses can automate the ingestion of orders from various channels directly into their order management system. This technology allows for the direct transfer of data between disparate systems—eliminating manual entry, reducing errors, and reducing processing time. Automation allows companies to manage a higher volume of orders without losing out on accuracy of customer centricity.
Automation in order management ensures that orders are fulfilled more quickly and accurately. Automated systems can prioritize orders, direct them to the appropriate fulfillment centers, and manage inventory levels in real-time. This leads to a more efficient fulfillment process, faster delivery times, and more satisfied buyers.
By automating accounting tasks, companies can reduce overhead costs associated with manual reconciliation and invoice creation. This not only speeds up the cash collection process but also ensures accuracy in financial reporting, helping businesses stay compliant with financial regulations and laws.
Automation has the potential to provide customers with a frictionless purchasing experience—from order placement to delivery. By ensuring timely and accurate fulfillment supported by automated updates on order status and prompt resolution of service inquiries, organizations contribute to a positive customer experience.
Automating order management empowers customers with self-service portals that offer immediate access to order status, shipment tracking, and easy management of returns or exchanges. This level of autonomy enhances the customer experience by providing transparency and control over their transactions. Self-service capabilities likewise reduce the burden on customer service teams, allowing them to focus on resolving other complex issues.
Although individual organizations may approach order management slightly differently, most will follow the same basic, three-step process:
Across industries and markets, for B2B and B2C organizations, order management is becoming increasingly complex. It's also becoming a greater competitive differentiator than ever before. ServiceNow Sales and Order Management (SOM) presents a comprehensive solution. By centralizing these sales and ordering operations on a single platform, SOM empowers organizations to navigate the challenges associated with expanding portfolios and the integration across a range of connected systems. SOM distinguishes itself by automating and connecting every stage of the sales and order fulfillment lifecycle. From defining new products and services to managing complex post-sale activities, SOM makes it possible to deliver a truly seamless customer experience. SOM includes powerful features for optimizing your approach to order management:
- Product Catalog Management supports a wide range of products, bundles, and combined offerings, facilitating rapid market response and flexibility.
- Quote Management speeds configuration, pricing, and generation of quotes.
- Quote to Order Conversion automates the conversion process, enhancing the speed and accuracy of sales cycles.
- Order Management streamlines the entire order capture and fulfillment process and delivers integrated customer lifecycle workflows for post-sale commercial modifications and updates.
- Automated order decomposition and orchestration accelerates order fulfillment with zero-touch automation, reducing errors and fulfillment times.
- Customer Lifecycle Workflows enables efficient handling of move, add, change, and disconnect requests, improving post-sale customer engagement.
- Integration Hub connects SOM to critical business systems, enhancing operational efficiency and data accuracy across platforms.
By leveraging ServiceNow’s powerful platform, businesses can optimize their lead-to-cash cycle, accelerate revenue growth, and significantly enhance the customer experience. The integrated approach ensures a cohesive journey across sales, order management, customer service, field service, and strategic portfolio management. This inherent cohesiveness provides businesses with the agility needed to launch products and services faster, shorten time to revenue, and sustain prominent levels of customer satisfaction.
Discover how ServiceNow Sales and Order Management can transform your organization’s order management processes; demo ServiceNow today!