The Complete Guide to Order Management

Order management is a fundamental process essential for businesses of all sizes. While larger corporations need it to handle extensive inventories and high transaction volumes, small enterprises might also benefit from streamlined order processes, although on a more modest scale.

From meticulous inventory control to ensuring optimal customer satisfaction, order management is crucial for operational efficiency. In this article, we will discuss the order management process in detail including both its benefits and challenges.

What is Order Management?

Order management is a business process that streamlines and optimizes a customer's order lifecycle including initial order placement, processing, billing and invoicing, tracking, and shipping. Order management allows businesses to keep track of multiple operations and departments involved in order fulfillment, thus ensuring accuracy and maximizing customer satisfaction.

Smaller businesses with limited inventory will handle this process manually with no issues, but for larger enterprises effective order management is a must. It enables businesses to strategically align their inventory, logistics, and customer service to make sure their processes are efficient.

Order Management System - What Is it?

Now that you understand why order management is so important for businesses to run smoothly, the only question left is how to ensure the process is efficient, especially for large enterprises that can not rely on Google Spreadsheets.

Enters the Order Management System (OMS), a software designed to automate and streamline the entire order process with precision and efficiency. It involves real-time order tracking, accurate inventory management, and communication channels, enabling businesses to answer increasingly demanding clients’ shipping and service expectations. In essence, an order management system is the technological backbone that empowers businesses to navigate the complex process of fulfilling orders.

5 Steps of the Order Management Process

Order management involves a series of steps crucial for the efficient fulfillment of customer orders. The complexity of managing orders increases with the size of a company, however, the fundamental process remains the same.

Step 1. Receiving the customer's order

The process starts when a customer places an order. At this stage, the order management software needs to capture all the order details, including customer data, and confirm the order. Thanks to features like inventory management there’s no need to manually check the availability of products, so orders can be confirmed immediately. Once the system registers that the payment went through, the next step is triggered automatically.

Small businesses can typically manage these tasks manually, but as they grow, they may find it necessary to invest in an order management system as well.

Step 2. Fulfilling the customer's order

This step varies depending on the size of the business. In smaller companies, the process of packing and sending the order usually happens in one place. For larger businesses with transactions scattered all around the world, it’s much more complex than that. Automation plays a crucial role in efficient inventory verification, picking, packing, and coordinating with logistics partners responsible for shipping.

The process can be even more complicated as nowadays businesses benefit from a vast range of storage and shipment opportunities. Companies can ship their products from multiple warehouses, stores, or distribution centers, depending on the product availability. Customers can choose to get their orders delivered to their homes, or delivery boxes, and even to pick them up from nearby stores. An order management system helps businesses manage all of those possibilities without making an error.

Step 3. Managing the post-sale process

Order management does not end with customers receiving their packages. A well-designed sales cycle includes post-sales steps that are critical for customer satisfaction. Businesses need to manage eventual returns and exchanges efficiently and address clients’ inquiries to make sure they are satisfied and come back for more.

Businesses that don't pay attention to post-sale customer service will lose the opportunity to repeat sales and cross- and upselling which are an essential part of revenue and business growth.

Step 4. Managing the inventory

An integral part of order management is making sure the inventory levels are in check. This stage involves real-time tracking of stock levels, reordering when necessary, and preventing stockouts or overstock situations. Effective inventory management ensures that businesses can fulfill orders promptly without experiencing product shortages or overfilling their storage.

Step 5. Analyzing and optimizing

Regular analysis of order data allows businesses to identify patterns, optimize workflows, and enhance the overall efficiency of order management. If businesses have access to analytics tools, they can use them to gain insights into order trends, customer behavior, and areas for improvement.

Order Management Benefits for Your Business

Implementing an effective order management process can significantly impact the success of your business. From streamlining operations to enhancing customer satisfaction and avoiding errors, there are many benefits, especially if you handle large quantities of orders daily.

Improved efficiency

By implementing efficient order management practices, your business can effectively handle more orders than ever before. Taking the time to design a comprehensive process ensures that bottlenecks, delays, or errors become a thing of the past.

Robust order management will help you streamline your internal processes and make your whole company more productive. Additionally, if you decide to invest in the order management system, you can automate tasks such as order processing, invoicing, and inventory management. This will free your teams’ valuable time allowing them to focus on other activities and strategic initiatives, creating space for innovation and driving business growth.

Enhanced customer satisfaction

Nowadays, customers expect their orders to be delivered as fast as possible, even on the next day. To keep your customers satisfied you need to swiftly process their orders and ensure they are delivered accurately and on time. A seamless order management process can help you not only meet but exceed these expectations and foster long-term customer loyalty.

By providing customers with real-time order status updates, efficient tracking, reliable delivery, and easy access to support channels, you can gain their trust and establish meaningful relationships that will pay off in the future.

Optimized inventory levels

Keeping your inventory levels optimized is crucial to avoid overstocking or understocking. You want to avoid situations where you don’t have enough products and keep your customers waiting. On the other hand, you also want to prevent investing heavily in products that will lie in magazines for months, taking up space and tying up resources that could be allocated elsewhere.

Effective order management will help you maintain optimal inventory levels. Larger businesses will benefit from order management system features like accurate demand forecasting and stock replenishing to accurately manage large amounts of products.

Accurate order tracking

With a robust order management system, you can track orders throughout the entire fulfillment process, from placement to delivery, and update your clients accurately.

Real-time visibility into order status and shipment tracking helps you address any emerging issues and provide timely updates to customers, improving your transparency and reliability.

Increased profitability

An order management system can help you boost your business profits by optimizing various aspects of operations. It streamlines processes, reducing operational costs related to manual errors, delays, and inefficient workflows. Additionally, efficient order processing leads to faster order fulfillment and delivery, enhancing customer satisfaction.

Critical Order Management Challenges

As businesses expand in scale, they may encounter greater challenges in maintaining effective order management. Managing thousands of orders daily, along with multiple warehouses and employees, requires a robust order management process to ensure smooth operations.

In this part of the article, we will discuss the biggest challenges and how an order management system can help overcome them.

Inventory accuracy and visibility

Your customers rely on your shop to display the available products in real-time and may be frustrated to find out it’s not true. Maintaining accurate inventory records and visibility is crucial for efficient order fulfillment and minimizing stockouts or overstocking. It’s especially important for larger enterprises that operate across the world and have to manage multiple warehouses and sales channels.

How an order management system can help?

A robust order management software can overcome this challenge by providing real-time insights into inventory levels and movements. By integrating with inventory management systems and using advanced tracking capabilities, businesses can ensure accurate inventory data and keep the stock levels optimized to meet customer demand effectively.

Order processing delays

Order processing delays can frustrate customers, potentially undermining their loyalty and trust in your ability to deliver. Not only do these delays impact immediate customer satisfaction, but they can also have long-term effects on your brand image. Businesses must address these challenges effectively to keep their customers happy and ensure revenue growth.

How an order management system can help?

An order management system streamlines the order-processing workflow by automating repetitive tasks and reducing manual errors. Thanks to centralized order management capabilities, businesses can efficiently process orders, from placement to fulfillment, ensuring fast delivery without any delays.

Integration issues

Integrating different systems can be complex and disrupt the smooth flow of order information within an organization. Your business might suffer if your systems are not properly synchronized causing problems with order processing. If you use different tools to navigate complex processes, you need to make sure they have the capabilities to integrate.

How an order management system can help?

An ideal order management software should serve as a central hub, seamlessly integrating with diverse systems like ERP, CRM, and e-commerce platforms. This integration makes data exchange and communication across various departments effortless, improving data accuracy and operational efficiency.

Customer communication and expectations management

Clear and timely communication with clients is essential to meet their expectations and build trust in your company. Misleading messages, inaccurate order updates, and lack of proper customer support will cause customers to leave and not look back.

How an order management system can help?

An order management system helps businesses provide excellent customer experience with real-time updates on order status, shipping information, and delivery schedules. By automating communication workflows, you can address customer inquiries swiftly and ensure transparency throughout the whole order fulfillment process.

Customers will repay you with their loyalty and might become brand advocates, spreading positive word-of-mouth about your company. Therefore, it's worthwhile to go the extra mile to ensure their satisfaction.

Enhanced Order Management with CRM

To enhance the resilience of your order management process and meet customer expectations effectively, consider implementing a Customer Relationship Management system. Efficient order management, an integral component of CRMs, can significantly improve business productivity and customer satisfaction.

Creatio CRM offers a comprehensive solution that seamlessly integrates order management functionalities with its CRM. With the no-code technology, Creatio empowers businesses to customize and optimize their order management processes according to their requirements without the need for coding skills.

Creatio CRM includes omnichannel order management which centralizes order processing from multiple online and offline channels, enhancing communication across the whole company. Detailed product information management streamlines ordering and inventory processes, and automated return processing simplifies the return and exchange of products, contributing to customer satisfaction.

By leveraging Creatio CRM's robust capabilities, you can streamline your order processing workflows, improve data accuracy, and provide exceptional customer experiences. With Creatio CRM you can overcome any order management challenges, deliver your products swiftly and accurately, and drive your revenue growth.