6 Hidden Benefits of Order Management Software

May 31, 2024 - 11 minutes read

The order management software benefits we don’t see can be the most valuable.

Image source

Since the earliest days of commerce, the history of order management has reflected the available technology of the times. Over the centuries, we have gone from orders (literally) etched in stone, to advanced, portable, and cloud-enabled order management software, and we’ve only just begun. So much goes on behind the scenes between the time a customer places an order and the time they receive their goods or services, and much of it remains hidden from their view.

Order management software has become an essential tool that allows businesses of all types and sizes to fulfill customer orders accurately and efficiently. While integrated software tools provide obvious advantages, they also produce benefits that are a bit less visible.

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” – Bill Gates

What is order management?

At its core, order management is the process of picking, packing, and shipping goods to your customers. The order management process is critical since it begins and ends with a memorable customer experience. Depending on the size and complexity of the business, order management can range from a spreadsheet-based manual order fulfillment process to a complex, automated process involving hundreds of locations, employees, suppliers, and carriers. Key elements of the order management workflow include:

• Order entry – Customer orders are received and entered into the system through an E-commerce store, mobile point of sale (POS) app, or retail outlet portal.

• Order processing – This critical segment of the process is where customer orders are picked, packed, and prepared for shipment.

• Order tracking – Shipment, delivery, or pickup services are arranged and documented so the order can leave your dock while being tracked to completion.

• Order fulfillment – The customer receives their order, then information on delivery time, damage, and order accuracy is collected and stored.

The obvious benefits of order management software

It’s easy to see how modern software tools, mobile apps, and cloud connectivity have taken order management to the next level. Automated order management eliminates time-consuming manual tracking processes, making it possible to process orders more efficiently. It also provides a real-time window into order fulfillment status that benefits both businesses and customers.

With all order information accessible from one location, metrics like inventory turnover, on-time delivery, and order processing cycle times are readily available for reporting and analysis. Order management software also makes it much easier to generate shipping labels, schedule deliveries, and automatically send email or text messages to customers at pivotal stages of the fulfillment process.

The 6 hidden benefits of order management software

The obvious advantages of order management software are so profound that more subtle benefits often go unnoticed. As you choose the right order management software for your business, it is important to keep these less visible perks in mind:

1. Inventory accuracy    

The function of keeping up-to-date, accurate inventory counts at your fingertips is most often associated with inventory management software. By pulling real-time data from mobile warehouse apps, point of sale (POS) terminals, shipping docks, and purchase orders, inventory management software creates a centralized hub, providing the inputs necessary for accurate forecasting, reordering, and optimization of storage space.  

Order management software also contributes to inventory accuracy by tracking vital processes between order placement and delivery. For example, when orders are picked, integrated barcode scanning is used to monitor part movement and the depletion of inventory in real time. When customer returns are processed and dispositioned, the order management software updates inventory counts accordingly to ensure the system reflects the latest status.

2. Error reduction

As order management technology improves, customers become less tolerant of incorrect or late orders. Order fulfillment errors can be damaging to brand value, especially for E-commerce retailers in highly competitive spaces. In a recent survey, 16% of respondents indicated they would be willing to abandon their shopping experience after just one incorrect delivery. Common errors that occur during the order fulfillment process include picking the wrong item or shipping the incorrect quantity.

Many customers attribute timely and accurate orders to the diligence of the retailer’s warehouse staff. While human attention is still important, order management software prevents errors by automating quality control steps at each stage of the process. When mistakes are inevitably made, the best order management systems are designed to identify and correct the issue before the box leaves the dock.

Image source

3. Reduced paperwork

The Toyota Production System, and nearly all other lean methodologies, emphasizes the elimination of muda, or waste. In manufacturing and warehouse environments, it’s common to look at things like scrap, long wait times, and expired items as sources of waste. However, eliminating paper records for processes like shipping, receiving, picking, and order acknowledgment also reduces waste by:

• Eliminating hunts for lost records

• Minimizing record storage space

• Streamlining reporting functions

• Expediting inventory data inputs

• Conserving natural resources (trees)

Order management software replaces paper records with easily accessible and searchable electronic records. The employee time saved through the reduction of paper is another hidden benefit of order management software.

4. Scalability   

For any business to grow, the software, facilities, and systems in place must be able to scale as the business expands. This is especially true for order management, since high order growth is difficult to manage without integrated, automated systems in place. For example, delivery tracking can be completed manually for a handful of orders, but quickly becomes unwieldy when daily order quantities expand into the hundreds or thousands.

Choosing a scalable order management software platform that integrates and syncs with your sales channels, inventory management software, and customer relationship management (CRM) allows you to ramp up the volume without introducing error sources or overworking employees. 

“There are two ways to extend a business. Take inventory of what you’re good at and extend out from your skills. Or determine what your customers need and work backward, even if it requires learning new skills.” – Jeff Bezos

5. Streamlined returns

The percentage of online orders returned to retailers continues to increase, along with the costs associated with reverse logistics. Return processing is an essential function at the tail end of the order management process. The scanning, tracking, labeling, and inventory status change functions that define order management during order processing are deployed in reverse to expedite returns. 

Order management software can also be used to automate the returned merchandise authorization (RMA) and refund processes. When integrated with the CRM platform, the reasons behind each return help to define trends and customer profiles over time.

6. Customer satisfaction

As retailers expand into multi-channel commerce to broaden their sales opportunities, providing a  positive customer experience remains a top priority. The best order management software is designed with the customer in mind, providing features to expedite hidden processes behind the scenes while  enhancing customer visibility each step of the way. Order management supports positive sales outcomes and customer satisfaction by: 

• Maintaining order accuracy

• Expediting order processing times

• Providing visibility into order status and delivery times

• Streamlining returns and exchanges

• Sending out automated status updates and reminders

Order management software and customer relationship management (CRM) work together to improve the customer experience by leveraging customer data to personalize interactions and provide more proactive customer support. By integrating your order management software and CRM systems, you can create accurate customer profiles that inform tailored experiences across all touchpoints.

Order management software hidden benefits: Final thoughts

Order management was once plagued by errors, delays, and bottlenecks owed to manual processes and limited resources, but advanced order management software has changed the equation for the better. As part of an integrated, cloud-based product suite that also includes inventory management, POS, warehouse management, and full-featured CRM, the Agiliron order management solution manages orders through each fulfillment stage while providing easy access to wireless barcode scanning and customized views to sort and schedule fulfillment for each sales channel.

Order management is the hidden factory bookended by the purchase and delivery steps that define the customer experience. Our solution experts can help you select and implement a scalable order management platform to improve efficiency while addressing the needs of your customers. Contact us today to discover how inventory management and order management software work together to make reliable, accurate, and timely order fulfillment a reality.  

Tags: Business Management, inventory management