Defining OMS: What the OMS Acronym Mean in E-Commerce

Arooha Arif

Tech advocate and writer @ fabric.

October 22, 2021
oms-meaning
Summary
  • The meaning of OMS, in simple terms, is software that facilitates orders and inventory in e-commerce environments.

  • The integration of an order management system (OMS) facilitates management, tracking, and fulfillment needs.

  • An OMS helps deliver an ideal customer experience that is devoid of miscommunication and delays.

  • It can centralize operations, optimize consumer experience, and also focus on time-oriented deliveries.

  • Companies can enjoy better productivity and reduced human error by integrating a dynamic OMS such as fabric OMS.

OMS Definition

OMS stands for order management system (OMS) which helps brands and retailers with post-purchase procedures for multiple sales channels: e-commerce websites, mobile apps, and physical storefronts. It facilitates operations by connecting the orders, inventory, and warehousing on a virtual plane to ensure seamless management within a multi-channel setting.

An OMS is important because businesses face many challenges with logistics, changing consumer preferences, and tracking fulfillment. While most companies continue to employ manual procedures, it is evident why 42% of retailers need a robust OMS for their business.

Main retail inventory management solutions implemented in the United States in 2020

Statista: Main retail inventory management solutions implemented in the United States in 2020

Alternative OMS definition

The OMS abbreviation in e-commerce can also stand for order management software versus order management system. Also, sometimes people refer to order management software as OMS software, thereby making the full meaning order management system software. While this is redundant, it validates that software is needed to create an effective system for managing orders for online and offline channels.

Now that you understand the OMS meaning and OMS acronym, let’s break down the impact of employing an OMS, along with the characteristics of an efficient order management system.

What Does OMS Mean for E-Commerce Businesses?

Employing an OMS can bring a dynamic change to the order of operations within e-commerce ventures. However, it is essential to note that the traditional order management procedures involve manual order entry and inventory management that is prone to errors.

The general air of inefficiency caused by the lack of a multi-channel solution leaves room for fraud, inaccuracy, extensive costs, and even customer frustration due to delays. But bringing an OMS on board can help a business with these woes.

Defining OMS benefits

Centralized operations

An OMS offers a centralized approach to inventory accounting and tracking. It keeps track of each order from reception to fulfillment across all sales channels. This software solution enables customers to track their orders while simultaneously keeping up with the inventory movement en route to and from the warehouses.

Optimized customer experience

Eighty-three percent of consumers believe regular communication is the core of an ideal online shopping experience. Consumers expect and even appreciate regular updates of their online orders. The integration of an OMS can add value to the customer experience and retain loyalty for the future.

The interface for OMS software is explicitly designed to accommodate the tracking of every checkpoint, from a mere order to a package on the road. Providing this added layer of communication to a consumer ensures that they keep purchasing from the said business.

An OMS adds to the business’s retail technology costs, but when e-commerce managers, customer service managers, and logistics managers define OMS benefits and its ability to manage orders on even the most minute level, the cuts in time and effort for order management professionals greatly outweigh software-related costs.

Tech- and time-oriented deliveries

OMS software solutions have been available in the market since TradeGecko (now known as Quickbooks), yet many companies have lost track of the upgrades readily available. Whether notifications for low inventory levels or real-time updates, merchants can breathe a sigh of relief after integrating a modern OMS.

It must be noted that each business has unique order management needs that a one-size-fits-all approach cannot fulfill. Even the costs of customization are high, implying an unfulfilled niche in multi-channel fulfillment for high-growth businesses.

Larger e-commerce retailers that operate from multiple warehouses require a robust solution that identifies stocks and aligns orders according to availability. After all, each e-commerce business intends to deliver quicker than their competition, and that is precisely what an OMS can take over.

Choosing the Right OMS

The ultimate e-commerce experience includes timely updates and speedy deliveries. The companies that succeed to deliver on these expectations are the only ones that survive long term. More than 70% of consumers cited convenience as the top reason for shopping online.

Businesses can anchor consumers by creating an effortless experience for the end-user. But unfortunately, most companies focus on the e-commerce website, its speed, and content without paying heed to the loopholes in their order management system.

Defining key OMS features

Automation

OMS software streamlines most of the order fulfillment steps. This semi-automation helps lower labor costs for a business while freeing sufficient time and personnel to focus on creative and productive processes.

Integrating "headless" e-commerce APIs

Since OMS is a champion for omnichannel commerce, headless e-commerce APIs are the flagbearer of innovation in this field. A capable OMS that can divide the frontend sales services from the backend inventory tracking can add significant value to a business operations team. It helps create the ideal shopping experience for the consumers that is convenient, comfortable, and also creative enough to leave an impression.

Inventory management

Preventing sales for out-of-stock items is crucial for the success of any e-commerce business. With a headless OMS, accurate inventory counts can be surfaced on the frontend of multiple sales channels and be analyzed within backend operational systems.

Arooha Arif author Tech advocate and writer @ fabric.

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