Order Management - Insights From eCommerce Platform Vendors

eCommerce Order Management describes the processes by which an ecommerce business collates customer orders, routes them to sources of inventory, such as warehouses, suppliers and retail stores, and tracks and optimizes all of the steps required to deliver orders to customers.

The application that is responsible for order management is the Order Management System (OMS).

I have looked at the statements from ecommerce platform vendors to see what they have to say on this important aspect of running a profitable ecommerce business.

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Order Management Definitions

Unsurprisingly each ecommerce vendor has a similar definition of order management, albeit with subtle differences in emphasis. Here are just a few examples.

BigCommerce defines order management as "the process of receiving, fulfilling, and tracking an order at a level that matches a customer's expectations". They go on to describe an OMS as "a software, process, or platform that helps you manage orders from every sales channel and seamlessly coordinates the fulfillment process across all of your customer touchpoints".

Optimizely (Episerver) states "Order Management gives you the tools and visibility to easily manage the entire lifecycle, so that you can give your customers a friction-free experience".

Salesforce encourages its customers to "think of order management as everything that happens 'behind the scenes', from the time you submit an order to the time you receive it. And there is a lot going on during that time".

Shopify defines an order management system as "any tool or platform that tracks sales, orders, inventory, and fulfillment as well as enables the people, processes, and partnerships necessary for products to find their way to the customers who bought them".

Spryker, an Enterprise grade ecommerce platform which provides an order management framework suitable for a retailer with a strong software engineering function to build order management capabilities, claims OMS "relies on the state machine-related concepts like event timeouts and conditions".

Viewing orders

One of the most basic features of an order management system is to enable a merchant's business users to view and select customer orders. WooCommerce offers very basic order management capability that is limited to this essential function. Users can list, filter and search customer orders and their status, to ensure orders that have passed payment validation can be queried to support a small in-house fulfillment operation.

Collating orders from multiple sales channels

Most order management systems can accept customer orders not just from their own website, but also other sources. For example, retailers using BigCommerce can consume customer orders from their own website as well as from POS platforms such as Square and Clover, marketplaces such as Amazon and eBay, and social platforms such as Facebook, Pinterest and Instagram.

While many order management systems and ecommerce platforms provide specific mechanisms to import orders from Amazon marketplace and eBay, Miva is one of the few to provide this out-of-the-box for orders captured on Etsy.

Inventory management

Adobe, provider of the popular open source ecommerce platform, Magento, has a dedicated order management product that focuses heavily on inventory management features rather than wider order management capabilities.

Intershop claims it will help you "manage your stock in real-time to get products to customers in the most efficient way possible".

Orckestra adopts a slightly different position, in common with many vendors, in that inventory is mastered and managed elsewhere, but its order management system combines feeds of "inventory from retail stores and distribution centers" to enable "near real-time access to inventory for all sales channels" and therefore its OMS enables its customers to "fulfill orders from the optimal location based on configurable fulfillment rules".

Order fulfillment

Arguably the most critical process in order management is to finally enable the fulfillment of customer orders from the locations where the inventory is stored - the warehouse(s), supplier(s) and/or store(s).

BigCommerce enables self-fulfillment, where the retailer runs their own warehouse operations, dropshipping, where a supplier fulfills each order on demand, and third-party logistics services (3PL), such as Fulfillment By Amazon (FBA) or ShipBob, where your owned inventory is stored in, and fulfilled from, your logistics partner's warehouse.

In common with many other order management systems, the Magento Order Management product includes the ability to build inventory sourcing rules, to ensure that orders are fulfilled from the most advantageous location with stock.

Neto provides a full suite of self-fulfillment capabilities, enabling merchants to "save time and improve accuracy with barcode picking and packing" adding that "incorrect picks signalled by an error tone or vibration".

WooCommerce offers the ability for a merchant to print their own USPS and DHL shipping labels, to reduce the reliance on additional applications to run the business, as well as integrations to partner solutions such as ShipStation, Shippo, and Stamps.com.

Role of the ERP

In many businesses, orders are sent from the ecommerce platform directly into the ERP for fulfillment. However Intershop argues "conventional ERP systems can no longer meet the demands of dynamic e-commerce with its rapidly evolving markets and customer expectations". They recommend an order management system sits between the ecommerce platform and other sales channels, and the ERP. They offer SAP and Microsoft Dynamics 365 integrations that adopt this pattern.

Omni-channel retail features

Kibo Commerce is an integrated ecommerce and order management solution. Their guide to order management emphasizes the importance of capturing orders from multiple systems, giving those sales channels visibility of inventory at multiple locations and being able to maximize inventory availability. They argue "too many retailers are not realizing the benefits of inventory visibility. Retailers often rely on warehouses to fulfill consumer eCommerce orders due to their inability to access or trust inventory availability at stores throughout the day. This can produce excess inventory at stores toward the end of seasons, which leads to marked down prices or expensive consolidation cycles". I agree wholeheartedly.

Kibo Commerce, whose OMS is a part of their wider ecommerce solution, highlights the various fulfillment routes that its product supports, including traditional distribution centres (warehouses), ship from store, store-to-store fulfillment, dropshipping, ship-to-store for collection, buy online, pickup in-store (BOPIS), and reserve and collect.

Magento also offers cross-channel services such as BOPIS and endless aisle, as well as customer service and business intelligence screens.

Customer Self-Service

Optimizely (Episerver) highlights the importance of customer self-service. Features such as viewing orders and order history and amending in progress orders drive down cost of customer service.

eCommerce platform integration with Order Management Systems

Shopify provides relatively basic functionality for order management but many OMS vendors offer their solutions on the Shopify app store. In this way merchants can simply add these OMS solutions to their ecommerce architecture. Shopify lists TradeGecko and Veeqo among many, many other providers.

Read More : Is Shopify an order management system?

BigCommerce quotes the following example vendors:- NetSuite (from $299 per month, Oracle's acquired SaaS ERP), Brightpearl (which also includes accounting and warehouse management functions) and OrderDesk (from $12 per month).

Oracle, like many ecommerce platform vendors, has its own order management system, Oracle Retail Order Management, which is pre-integrated into its Oracle CX Commerce solution.

B2B features

OroCommerce, a dedicated B2B ecommerce platform vendor, highlights the B2B sales lifecycle includes "buyers submitting detailed orders, requesting quotes, and asking for specific quantities and prices from the seller, who then needs to be able to answer with detailed proposals". This implies the set of capabilities in their OMS are highly differentiated from those in a B2C OMS.

Order management user documentation and help

Order management can be a set of very complex processes and extensive user training, documentation and help is required to enable staff to use an OMS effectively.

Although Wix offers very basic order management screens, it does provide extensive documentation to help, event though its solution focuses on processing only those orders that have originated on the Wix store itself.

Episerver (Optimizely) provides user help and developer documentation, freely available prior to making any decision to adopt their platform.

Miva offers a series of training videos further helping its customers to understand how to operate its order management screens.

OroCommerce offers comprehensive documentation, including videos, aimed at the implementation team and developers, as well as eventual end users and administrators of their solution.

Conclusion

eCommerce platform providers are united in their definition of order management, although with some differences in emphasis.

Simple ecommerce platforms often contain enough capability for a small business to prepare orders for dispatch themselves, and mechanisms to print carrier labels.

Enterprise ecommerce platforms normally rely on a separate order management system as their customers are businesses with more sophisticated and complex needs that demands the scalability and functionality within a dedicated OMS.

Read More : Article: ecommerce order management key business processes

Read More : Article: ecommerce order management systems vendors compared

This article was updated on February 27, 2021

M Ryan

M Ryan is an ecommerce consultant with twenty years experience working with retailers, consumer brand manufacturers and other consumer-facing businesses helping them to develop their ecommerce strategy, implement ecommerce technology and improve their ecommerce operations. He works extensively throughout US and Europe, with clients including global brands, large retailers and household names in consumer goods.