What is Order Management? All Facts You Need to Know

The order management landscape has undergone a dramatic transformation, driven by the fast-growing demand for efficient, multi-channel order management.

According to Grand View Research, the global order management market was estimated at USD 2.95 billion in 2022 and anticipated to grow at a CAGR of 11.6% from 2023 to 2030.

This surge in market growth reflects the increasing strategic importance of order management in an era marked by disrupted global supply chains and rapidly changing consumer preferences. Businesses that have mastered the art of order management have emerged as the resilient leaders in their industries, withstanding the changes led by digital revolution and the COVID-19 pandemic.

This guide will cover the ins and outs of order management, equipping you with the knowledge you need to leverage this critical business function to drive growth and success. Here are what you can expect:

• Definition, key elements, and benefits of order management systems (OMS)
• The evolving state of order management processes and how to select the right solution for your business
• How enhanced order tracking and visibility can transform your order management capabilities
• TrackingMore’s order tracking integration with order management systems: Overview, practice, and case study of AliExpress

What is Order Management?

Order management begins at the moment a customer presses on the “order” button. It extends through the entire order lifecycle, encompassing a range of critical activities.

The lifecycle starts with order capture, where the customer’s initial request is recorded and processed. From there, the focus shifts to order fulfillment, ensuring the seamless execution of the order, including inventory management and logistics coordination.

However, this does not necessarily conclude with the final delivery. Post-delivery support, such as handling returns and offering additional services to the customer, is also critical. This holistic approach ensures a consistently positive customer experience, even after the initial transaction has been completed. Effective order management is essential for businesses of all sizes, from small eCommerce shops to large enterprises.

What about Order Management Systems (OMS)?

For businesses handling massive volumes of orders, manual processes can quickly become a nightmare, leading to inefficiencies and frustrated customers.

 

This is where Order Management Systems (OMS) come into play. These sophisticated software applications seamlessly integrate with a wide range of business systems, such as eCommerce platforms, ERP systems, and warehouse management tools, to create a centralized platform for managing the entire order lifecycle.

An OMS allows businesses to leverage a wealth of data, from customer information and order histories to sales channel data and supplier networks.

Key Elements of Effective Order Management

Order management can be a huge hassle for businesses, however, there are a few agreeable elements of what constitutes effective order management.

Your orders are seamlessly captured and verified

Ensuring a smooth and efficient order capture process will be important, regardless of the sales channel.

Whether customers are placing orders through an eCommerce platform, calling a contact center, or visiting a physical store, retailers must be able to quickly and accurately capture the order details. The basic ones include product information, pricing, shipping requirements, payment information, and customer contact details.

Maintaining consistency and clarity in Stock Keeping Units (SKUs), product descriptions, and quality is key during the order capture stage, as it helps avoid errors and deliver a positive customer experience from the start of the order management process.

Your inventory is optimized for customer demand

With order details seamlessly captured and verified, the next critical step is aligning inventory to meet customer demand.

By maintaining real-time visibility across locations and warehouses, retailers can ensure that ordered items are in stock and ready for fulfillment, preventing stock-outs that can disrupt the order management process and lead to customer disappointment.

To achieve this alignment, retailers can leverage a variety of data-driven insights:

Sales forecasting	Predict future demand based on historical sales trends, market data, and customer behavior patterns to identify seasonal fluctuations, emerging trends, and changing preferences
Inventory turnover	Inventory turnover = Cost of goods sold / Average turnover value Analyze the rate at which inventory is sold and replenished to optimize stock levels, allocate resources more effectively by focusing more on high-turnover, in-demand products
Demand planning	Anticipate changes in customer preferences and buying patterns to proactively adjust inventory levels and product mixes
Inventory visibility	Track real-time stock levels across all warehouses, distribution centers, and store locations by integrating data from various sources (e.g., POS, ERP, WMS) for a comprehensive and accurate view

Your fulfillment and communication are efficient

The retailer’s focus then shifts to optimizing logistics and warehouse operations. This involves streamlining the picking, packing, and shipping procedures, and leveraging technology to enhance efficiency. Key considerations to good fulfillment processes include ease of integration, automated workflows, and timely shipping.

Moreover, customers expect a high level of transparency and communication throughout the order management process. Retailers can enhance the customer experience by adopting the following strategies:

• Real time updates. Keeping customers informed with real-time tracking of order status from purchase to delivery, across websites, mobile apps, and other channels.
• Omni-channel engagement. Enabling seamless communication through email, SMS, social media, and other touchpoints
• Clear returns policies. Establishing clear, hassle-free policies and procedures for product returns and exchanges, demonstrating the retailer’s commitment to customer satisfaction.

You put security and compliance at the forefront

What’s often neglected is that customers want their data secured and appropriately used. Customers are increasingly conscious about how their sensitive information is collected, stored, and used. They gravitate towards companies that demonstrate a strong commitment to data protection.

To address these concerns, businesses must invest in advanced security features and comply with regulations like ISO 27001, SOC 2, HIPAA, PCI-DSS, and industry standards such as ISO 27001. This showcases their credibility in safeguarding data. Beyond compliance, organizations should design systems with data privacy principles at the core.

Benefits of Having a Good OMS In Place

In fact, businesses that have optimized their order management processes can see significant improvements in both top line and bottom line growth. Let’s explore the key benefits of order management in more detail:

Efficient order management = Happy customers

Optimized order management leads to exceptional customer experiences. By consistently delivering orders on time and in full, businesses can increase customer satisfaction and minimize “Where Is My Order?” (WISMO) inquiries.

Real-time tracking and proactive updates keep customers informed, while seamless returns and exchanges turn potential negatives into positive brand experiences.

Fuelling sustainable revenue growth

On the other hand, order management enables businesses to enhance their brand reputation and foster stronger customer lifetime value, driving sustainable revenue growth. With end-to-end process optimization, companies can capitalize on new market expansion or product line diversification opportunities, accelerating top-line growth.

Secure your bottom line with operational efficiency

At the core of optimized order management is the ability to streamline order workflows from placement to fulfillment. By automating and integrating processes, businesses can eliminate manual, error-prone steps and achieve significant improvements in operational efficiency. Integrating logistics and carrier management systems allows companies to route orders through the most cost-effective and fastest delivery options. This helps reduce transportation and logistics costs.

Intelligent automation can also drastically reduce the time spent on tasks like order tracking, returns processing, and inventory management. By freeing up resources from these time-consuming activities, businesses can shift their focus to strategic initiatives. These operational improvements translate directly to the bottom line, as streamlined order processing, labor, and logistics costs enhance profitability.

The Evolving Need of Sophisticated Systems

The need for advanced order management systems has evolved significantly over time, driven by technological advancements and changing business requirements.

Tracing the transformation

Before the Industrial Revolution, companies relied on traditional pen-and-paper methods to track inventory, which were prone to errors and inefficiencies. The development of technologies like punch cards and barcodes in the 20th century revolutionized inventory management, paving the way for computer-based order management systems.

The application of radio frequency identification (RFID) technology in logistics has been a game-changer for order management. By allowing businesses to automatically track and monitor inventory in real-time, RFID has significantly improved the accuracy and efficiency of order fulfillment processes. This enhanced visibility into inventory levels and locations is crucial for streamlining order tracking and delivery.

 

The rise of Cloud and digital

Cloud-based order management systems eliminate the needs for on-premise hardware and software, allowing companies to access their order data and management tools from anywhere. Cloud-based systems often provide seamless integration with various sales channels, logistics providers, and other business systems, enabling a holistic view of the entire order management process.

The COVID-19 pandemic has expedited the adoption of digital, multi-channel order management systems as the world shifted to remote work and online shopping.

Evolving market landscape

The order management system (OMS) market has evolved to offer a wide variety of practical solutions to meet the diverse needs of businesses. From enterprise-level platforms to cloud-based and industry specialized solutions, companies can choose the right system to streamline their operations and drive business growth.

Enterprise-level platforms: Oracle, IBM, and SAP

• Designed for large, complex organizations that handle high transaction volumes and require the integration of multiple systems. These robust platforms offer advanced capabilities to manage complex business rules and processes.

Cloud-based order management: Shopify Plus, Zoho Inventory

• Provide flexible and scalable capabilities without the need for significant IT resources or infrastructure. These systems often feature intuitive interfaces and seamless integrations, making them attractive options for businesses of all sizes.

Specialized solutions: TrackingMore, ShipBob, Aftership

• Address industry-specific needs, such as high-volume multichannel fulfillment, shipping optimization, or marketplace integration. These niche solutions cater to the unique requirements of particular industries, business models or use cases.

Choosing the Best Order Management Solution

When selecting an order management system (OMS), it’s important to carefully assess your current and future business needs. Consider the three steps below:

Evaluate your business requirements

You can start by evaluating your current and future business requirements. Make a list of your pain points, challenges, and goals for implementing the OMS. Consider factors such as expected business growth, global expansion, increasing order volumes, and expanding sales channels, integration capabilities and speed.

Explore deployment options

You should also decide whether a cloud-based or on-premises OMS solution is the most suitable for your business. Overall, cloud-based solutions offer the benefits of scalability and reduced IT infrastructure requirements, while on-premises solutions provide more control and customization.

Research potential solutions in the market

To benefit your search process, look for providers with experience in your industry and evidence of successful implementations. Review case studies and testimonials to learn how the solution has performed for businesses similar to yours. This will help you evaluate the overall capabilities, performance, and suitability of the potential OMS solutions.

You can also consider developing a comprehensive Request for Proposal (RFP) that outlines your business requirements, objectives, and limitations. It will help potential vendors provide a detailed proposal that addresses your specific needs. Key questions may include:

• How does the system handle complex business rules and workflows?
• Can the OMS integrate seamlessly with our existing systems and tech stacks?
• What level of support and training do you provide?
• What is the implementation timeline and process?
• Can the system scale with our anticipated growth trajectory?
• What security measures and compliance standards does the OMS adhere to, to protect your sensitive business and customer data?

By thoroughly evaluating your requirements, deployment options, and potential OMS solutions, you can select a system that will streamline your business operations, improve customer experience, and support your business growth.

How TrackingMore Delivers Versatility and Scalability in the Order Management Process

eCommerce companies face a multitude of challenges when it comes to streamlining their order processing and fulfillment workflows, and the right technological solutions can make all the difference.

TrackingMore, an innovative order management and tracking platform, has been engineered to address these challenges head-on, providing businesses of all sizes with the versatility and scalability they need to thrive.

Integration with global shipping carriers

Our solution is dedicated to offering customers a wide range of delivery options. TrackingMore’s unified API approach allows businesses to seamlessly connect with a vast network of over 1,200 global shipping carriers and 80 airlines, enabling them to provide their clients with a diverse selection of shipping options to choose from. Other highlights of the solution include:

• Up to 100 QPS (Queries Per Second), ideal for high-volume shipping businesses
• 99.9% API uptime, ensuring transparent order processing and smooth order management
• Provides SDKs in 7 programming languages to reduce development time and ensure quick implementation, typically within 1-7 days

 

Data accuracy and reliability

Maintaining data integrity is critical for building customer trust and satisfaction. TrackingMore’s automated carrier detection and correction capabilities help minimize the risk of errors, ensuring timely and accurate order updates. This level of data reliability is essential for delivering a smooth and transparent order processing experience.

TrackingMore also employs advanced encryption and is ISO 27001 certified, providing enterprise-level data protection to further ensure the security and integrity of sensitive customer information.

Flexibility to business growth and global expansion

As businesses expand and their requirements change, the need for a scalable and flexible order management solution becomes increasingly important. Designed as an enterprise-grade platform, TrackingMore offers the scalability and flexibility to support organizations of all sizes, from small eCommerce startups to large multinational corporations.

Integrating TrackingMore Order Tracking with Your Order Management System

TrackingMore can be easily integrated with your existing order management system (OMS) to enhance your order tracking capabilities. Here’s a quick guide on how to connect TrackingMore with your OMS:

API Integration

TrackingMore offers a robust API that allows you to seamlessly integrate order tracking functionality directly into your OMS. With the TrackingMore API, you can:

• Retrieve real-time tracking information for your orders
• Automatically update order status in your OMS
• Generate tracking links and increase visits of your official website
• Access detailed shipping analytics and reporting

To get started, you will need to sign up for a TrackingMore account and obtain your API key and make API calls within your codebase to leverage the desired functionality.

Webhook Integration

TrackingMore also provides proactive Webhook notifications, which enables you to consolidate updates on shipment tracking status in your OMS. Based on this, you can set up automation rules to update order statuses.

To set up webhooks, configure the webhook URL in your TrackingMore account, then implement the webhook listener in your OMS to receive and process the tracking updates.

Plugin and Extension Integration

In addition, TrackingMore supports pre-built plugins and extensions for popular eCommerce platforms, including Shopify and WooCommerce, which allows you to easily connect TrackingMore with your existing OMS without the need for custom coding.

Case Study: TrackingMore helps AliExpress streamline global logistics operations

During the COVID-19 pandemic, AliExpress, the global eCommerce platform owned by the Alibaba Group, experienced exponential growth in business. With the platform available in 18 languages across 220 countries and regions, order volume surged, reaching over 1 billion orders per year.

 

However, this rapid expansion brought significant challenges to AliExpress’ logistics operations. Customers were frustrated with the standard 15-45 day shipping times and lack of reliable tracking. AliExpress needed to enhance its order management to meet expectations for faster and more transparent delivery. Additionally, the growth in sellers and international shipments raised security and data privacy concerns, requiring a solution to securely transmit tracking information without compromising customer data privacy.

To address these pressing needs, AliExpress partnered with TrackingMore, an innovative order management and tracking platform. TrackingMore provided AliExpress with a customized API endpoint, secure tracking data encryption, and a flexible system for uploading high volumes of tracking numbers.

This collaboration enabled AliExpress to strengthen its monitoring of delivery progress for millions of parcels daily. TrackingMore’s solutions allowed AliExpress to:

• Evaluate the performance of over 100,000 sellers on the platform, identifying any cases of falsified or late deliveries
• Enhance the customer experience with more reliable and timely tracking updates
• Maintain its reputation as a trusted eCommerce leader and continue its impressive growth trajectory

Final Words

In today’s fast-paced, customer-centric business landscape, order management has become a critical component of success. Effective order management solutions must address key elements such as carrier integration, data accuracy, scalability, and customer experience to enable businesses to streamline their ecommerce order fulfillment, improve efficiency, and deliver exceptional service to their clients.

TrackingMore stands out as a comprehensive order management platform that addresses these growing needs. By offering seamless carrier integrations, robust data management capabilities, and a suite of powerful tracking features, TrackingMore empowers businesses of all sizes to optimize their order management workflows.

Ready to transform your eCommerce order management experience with enhanced shipment tracking? Sign up for a free trial or contact our experts to discover how TrackingMore can serve your business well.