Order Management Best Practices

In today's world of 2-day or even same-day shipping, many people are used to placing an order and having it magically appear at their doorstep in what feels like only moments later. 

But what happens in the in-between time—after you've clicked "Place Order" and before it gets dropped off by the FedEx driver or mail carrier?

Several intermediary steps in the order management process must happen for your package to arrive at your house or place of business with the correct items.

In this article, we will break down several critical components of order management (OM) and how best to streamline and utilize these processes to drive business success. We'll also go over many common FAQs related to the order management process.

By the end of this article, you should have a clear understanding of what order management is and some best practices for order management, including the best tools and resources for your organization to save time and money and increase customer satisfaction.

What is Order Management?

Order Management is the entire business side of the ordering process: securing purchases from customers—via insertion orders, eCommerce sites, or other methods—and then picking, packing, and shipping the order while tracking every phase of order fulfillment along the way.

In a nutshell, order management is everything that happens after you click "Proceed to Checkout" on Amazon (or another site) until that order shows up at your house. The order fulfillment process can even include returns and cancellations—for when you regret your 3 a.m. purchase at 9 a.m. after you've showered and had coffee.

Barring customer regret, the order management process can appear quite straightforward. But beneath the smooth veneer, many moving components keep the process running smoothly and efficiently. A well-organized order management process can mean better speed, agility, and enhanced cohesion throughout the entire supply chain.

What is an Order Management System (OMS)?

An Order Management System (OMS) is an electronic system that handles an organization's orders efficiently and cost-effectively. This order management software can be computer or cloud-based, depending on your business needs and budget, but increasingly businesses are shifting to cloud-based software for reduced costs and increased security, flexibility, and ease of management.

These software systems can handle multiple aspects of your business or act as standalone order management systems. However, integrating your sales order management software into broader enterprise resource planning (ERP) software can streamline tasks, de-silo data shared in real-time, increase collaboration, and improve decision-making.

Some ERP systems with OMS capabilities include Epicor, SAP Business One, Oracle NetSuite, and Sage.

Order Management System Features

There are many benefits to implementing an Order Management System (OMS), with numerous customizations possible for your industry, the size of your operations, the locations of your customers, and more. It may be worthwhile to schedule a demo to see what an Order Management system could do specifically for your business.

Common OMS features include:

• Automated sales
• Inventory control
• Customer relationship management (CRM)
• Shipping and receiving
• Accounts receivable
• Advanced reporting

We'll cover each of these key features in more detail.

Automated Sales

A huge benefit to an Order Management System (OMS) is automated sales. An OMS can eliminate the need to manually monitor your websites by automatically updating quantities, low-stock notices, shipping details, and more data points in real-time.

Inventory Control

Another major benefit of an OMS is inventory control. If you've ever managed or owned a brick-and-mortar store, eCommerce business, or warehouse, you know a considerable component (headache) is ensuring inventory is lean, trackable, accurate in count, and saleable.

Inventory control automates the tracking, counting, and retrieval process, which in turn eliminates human error. This means greater accuracy when fulfilling customer orders. There's a reduced risk of selling an item that's not in stock, and then having to cancel the order, contact the customer, and likely lose a (new) customer—not to mention your business reputation.

For better inventory control, an OMS can be linked to your existing POS system or leveraged through an ERP system.

Customer Relationship Management (CRM)

An order management system (OMS) can improve your CRM in many ways, including:

• Improved visibility into customer orders: This includes monitoring status, potential delays, and better customer service.
• Improved efficiency: An OMS automates many tasks involved in order management—including order fulfillment, shipping, and billing—which can free up CRM teams to focus on more long-term strategic tasks and building customer relationships.
• Improved accuracy: An OMS can reduce errors in order fulfillment, increasing customer loyalty.
• Improved compliance: An OMS can help businesses comply with local regulations (across different states and countries), including adherence to data privacy and security.
• Automated follow-up and troubleshooting: If a particular SKU or portion of the customer’s order is not in stock, an OMS can notify the client via multiple communication methods and share new ETAs, suggest alternate products that are in stock, and/or offer discounts.  

Shipping and Receiving

An order management system (OMS) can be a valuable resource for optimizing shipping and receiving processes.

• A single view of all customer orders: This includes the status, location (including distribution centers or in transit), and expected date for the arrival of goods.
• Automation of manual tasks: Picking and packing, generating shipping labels, and printing packing slips and order manifests.

Accounts Receivable (AR)

• A single view of all customer accounts receivable (AR) details: Payments made, payment terms, due dates, outstanding balances, and AR contacts.
• Automated notifications: With this single view of all AR accounts, an OMS can automatically generate a past-due notice, notify the correct party, and offer solutions that align with payment terms.
• Fewer billing errors: Not only can the OMS automatically generate and send invoices, but an OMS can also double-check that a customer is only billed for inventory that’s in stock and is shipped out.

Advanced Reporting

• An OMS offers advanced more powerful, actionable reporting with:

  • Real-time data: Continually gather data from a string of different departments and inputs, putting together unified dashboards that reflect conditions or updates for raw materials, production, sales orders, inventory levels, shipment, and potential or current blockers like union strikes, government instability (i.e., causing a shipment of raw goods to be held up in a port overseas), machinery breakdown, and more.
  • Customizable reports: Track the data your business needs, identify trends, and quickly make strategic decisions from the best information possible: accurate, recent, and complete.
  • System integration: OMSs can be integrated with or as part of, other CRM and ERP systems.

  The features we just detailed above can also help decrease inventory waste. A good OM will minimize product obsolescence or spoilage.  

  If a product is in danger of obsolescence, expiration, or otherwise being removed from stock, an OMS can:

  • Automatically decrease the sales prices
  • Offer existing customers a discount for this inventory through an automated notification 
  • More heavily push or promote this particular product on websites and other digital collateral

What is CPQ in Order Management?

CPQ means Configure, Price, Quote. This acronym is useful when products must be customized beyond a simple dropdown of predetermined options, like different sizes or colors.

CPQ systems show up in business and retail transactions every day. Take, for example, the daily coffee run. Thanks to CPQ, a customer can customize their drink in infinite ways based on size, flavor, and how many flavor pumps, type of milk, hot or cold, caffeinated or decaf, and a dash (not a sprinkle) of cinnamon or turmeric.

The larger the drink, and the more ingredients that go into it, the more expensive it will be. Price can also vary based on the type of ingredient even if the quantity used remains unchanged. For example, almond or soy milk is more expensive than regular milk.

A CPQ system consistently calculates an accurate price based on these customizations.

Other products—like electronics or medical equipment—are even more complex as they require a greater number of configurations, safety guidelines, and regulatory oversight. A CPQ can easily provide accurate pricing for these more complex products. 

Instant access to this data through CPQ means more sales and more revenue. 

CPQs eliminate the "I'll get back to you with a custom quote" and enable sales reps and customers to close deals now.

What is a KBMax CPQ?

KBMax CPQ is a cloud-based CPQ (Configure-Price-Quote) solution. KBMax is a more powerful version of ordinary CPQs. It enables your organization to sell more products and more services more quickly.

KBMax CPQ is intuitive to use and can be customized to meet the specific needs of your organization. It’s also a powerful tool for sales teams to leverage. Capabilities of a KBMax CPQ include:

• Visual product configuration: Sales reps can show a powerful visual of different product configurations using 2D, 3D, or augmented reality renderings.
• Approval workflows: KBMax CPQ includes an approval workflow so sales reps can get approval for quotes before they reach customers. This ensures quotes are approved swiftly and without errors.
• Advanced sales reporting: KBMax CPQ includes many report features to track sales performance, identify trends within the conversion funnel, improve sales strategies, and offer ongoing recommendations and tips.

KBMax CPQ can deliver increased sales and faster sales close times, improved customer service, and reduced costs by optimizing price quotes for product configurations, managing approval flows, and providing real-time product renderings.

Epicor Acquisition of KBMax CPQ

The enterprise software company, Epicor, acquired KBMax CPQ in 2021. Best known for its Enterprise Resource Planning (ERP), Order Management (OS), and pricing software solutions, Epicor acquired KBMax to complement and expand its existing CPQ capabilities.

KBMax CPQ helps Epicor business customers increase sales by making it easy for sales reps to configure customized products, generate quotes on the spot, and then speed through the approval flow process.

KBMax CPQ also delivers tremendous cost savings to Epicor customers by automating manual parts of the sales process and offering a quicker sales (pitch) cycle.

Beyond Order Management (OM), Epicor is integrating KBMax CPQ with its other products and services, providing greater cost benefit to other business areas and even more Epicor business customers.

So, What Does Epicor CPQ Do?

Getting really specific, Epicor CPQ—with its KBMax CPQ integrations—cuts out the complexity in the sales-to-manufacturing process.

In plain language, Epicor CPQ lets manufacturers and distributors do more business and do better business through speed, automation, and innovation.

• Smart visual selling: Sell digitally using intelligent visual configurations customized for unique customer needed
• Enhanced accuracy in reporting
• Enhanced collaboration: A single source of truth for sales, production, shipping, and other data inputs.
• Seamless collaboration: De-silo different departments for increased speed and agility, fewer time blockers, and greater accuracy
• Improved order fulfillment process

Epicor CPQ is like regular CPQ software, but more powerful. Epicor CPQ is turbocharged by KBMax’s advanced data visualization and automation capabilities.

What is Order Fulfillment?

Order fulfillment is another part of the order management (OM) process. It's so closely related, that the terms OM and fulfillment are used synonymously.

But here's the difference: order fulfillment is the process of fulfilling the order whereas OM provides all of the information needed to fulfill it.

Beyond fulfilling the order—based on available inventory, picking, packing, and shipping—OM involves tracking the order at every stage of the process from when the order is placed until it leaves the distribution center and reaches the customer.

How Can Business Optimize Order Management Processes?

There are many things your business can do to optimize the order management process. Here are 5 things you can do now.

1. Choose the right order management system (OMS). Plenty of options are available. Make sure you select one that is aligned with your business needs, including the size of your business, the products you sell, your budget, and the location and needs of the customers you service.
2. Use a robust order-tracking system to track the order status at any stage from placing the order to receiving it. This is a facet of any OMS you have in place.
3. Automate as much as you can to save time, improve accuracy, and reduce costs. Processes that can be automated include order entry, fulfillment, tracking, and customer service follow-up.
4. Train your staff. They should be familiar with and well-versed in your OMS. An intuitive, easy platform will increase user enthusiasm and adoption rates for the OMS and OMS processes.
5. Continually monitor and adjust the first four steps.

In addition to these outlined steps, enterprises can benefit from using:

• One single view of the customer (all of a customer's information in one place, including contact history, order history, and preferences),
• Predictive analytics to anticipate and identify potential problems before they become problems, taking immediate, remediating action.
• Machine learning for enhanced task automation and improved efficiency. Using machine learning, as one example, can continually optimize warehouse processes.

What is a Distributed Order Management System?

A DOM system is essentially the same thing as a regular order management system (OMS), but a DOM is designed to manage orders from multiple channels and multiple locations, while a regular OMS manages orders from a single channel.

DOMS systems are, as a result, more complex and more expensive but they come with numerous advantages like the ability to more rapidly scale up and meet demand.

Evaluating Order Management Software (OMS) Options

When reviewing different OMS options, intuitiveness is key. An intuitive OMS will be easier to use, require less maintenance and less training (and less adoption resistance), and be an overall simple, streamlined system.

As you consider different OMSs, look for:

• Clear, concise instructions
• Minimal steps for customers to place an order; flow should be logical and straightforward
• Minimal complexity to set up an OMS (cloud-based OMS means there's nothing to set up on-premise; it's a web application users can access from anywhere)
• Integration capabilities with any existing processes and software systems like WMS, ERP, inventory management, POS systems, and sales channels
• Incorporation of visuals (product renderings, data)
• Powerful reporting (real-time data from all impacting sources) that can be shared with stakeholders across all business functions

Bottom Line

An intuitive order management software system can streamline, automate, and speed up business processes, eliminating dated manual processes and future-proofing your company.

Through careful assessment of your goals and needs, you can select the best order management system for your business to increase customer satisfaction and simplify the process for customers and your workers.