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What an Order Management System can do for your online business

An Order Management System (or OMS) is one of the key components of an ecommerce business. Its primary purpose is to manage the lifecycle of a customer order from point of order capture through to completion, whether its delivery to the customer or a return.  All online businesses require some form of order management, whether it is built into an ecommerce platform or is a separate system. There are many OMS providers on the market, so there is a system available for a business of any size. The key is to find one that best fits your business’ needs now and in the future. To help, I have put together a list of functions and features that an OMS can provide for an ecommerce business. This list can form the basis of a brief for a new system, either as a set of business requirements, a RFP to decide what your business needs from an OMS or for process definition workshops.

Order Lifecycle Management

Managing and coordinating the lifecycle of an order is one of the core functions of an OMS. It controls how and when an order is created, what stages it needs to pass through before it can be fulfilled or shipped. Rules for when and how an order can be amended, cancelled or returned can are handled here to.

Key functions and features include:

  • Order entry screens: for taking of orders where there is no separate facility available.
  • Integration to order channels, from your website, other channels including your store, and other market places, such as Amazon and e-Bay.
  • Order workflow configuration
  • Management of different types of orders, such as:
    • Make-To-Order
    • Services
    • Back order management: management of orders that have been taken for out of stock products.
    • Pre-order management: processing of orders that are taken before the product has been released by the manufacturer.
  • Update of order and order status information to customer services, online customer self-service or to email communications.

Payment Services and Fraud

Taking of a valid form of payment is critical to the process. Key functions and features include:

  • Integration to payment services for payment verification and payment processing
  • Integration to fraud check services
  • Fraud hold processing

Order amendment

Orders may be changed at any point. The OMS should be able to support the amendment requirements of the business. Key functions and features include:

  • Order amendment screens
  • Amendment calculation and payment/refund processing
  • Price and promotion management

Inventory Management

All OMS hold stock levels for all fulfilment points, which is used to ensure that the order is released to the fulfilment point when it has stock and to provide view of the order status. Key functions and features include:

  • Availability-to-Promise (ATP) check
  • Online stock check: service provided to the website to check if the order is able to be fulfilled
  • Stock reservation: when the order is placed or even when the customer adds to basket, the available stock is reserved.
  • Sourcing rules: where a product is stocked in multiple locations, sourcing rules should determine which fulfilment point to allocate an order to.

Fulfilment Management: Integration to fulfilment points

Some OMS systems have a warehouse management system (WMS) component built into them, and the requirements for WMS can be found here. However for online retailers who have a separate warehouse for fulfilment or a 3rd party fulfilment provider, an OMS should provide a mechanism to transfer order information and receive update about fulfilment. Key functions and features include:

  • Integration to fulfilment point(s) for all stock and fulfilment  information:
    • Stock levels/updates to OMS
    • Order release for picking/fulfilment
    • Dispatch or shipping confirmation
  • Communications to drop ship suppliers: drop shippers have a variety of challenges that the retailer has to adapt to. The OMS must help the business to manage these effectively.
  • Links into the order workflow management for customer services and processing.

Delivery Management: Integration to couriers, carriers and delivery agents

Providing visibility of the delivery journey is critical but a challenging part of the journey. Receiving delivery (and collection) updates is key to provide updates about the orders and also to trigger further processing. Key functions and features include:

  • Integration to each couriers, carriers and delivery agents that is used or to a courier broker system
  • Links into the order workflow management for customer services and processing
  • Request for carrier returns collection.

Returns Management

Key functions and features include:

  • Creation of return order
  • Replacements
  • Exchanges
  • Schedule carrier returns collection
  • Refunds calculation: this can be a hugely complicated area!
  • Refund processing
  • Returns disposition

Customer Service

Key functions and features include:

  • Email communication triggers in order workflow and templates
  • Customer service screens or integration to customer service systems


Key functions and features include:

  • KPI Dashboards
  • Exception reporting
  • Management Information (MI) including ability to extract data
  • Integration to a reporting database

Non-functional requirements

In addition, there are other features which are ‘non-functional’, but are nevertheless just as important. These include:

  • Standard interfaces to standard sales channels, such as eBay, Amazon and Rakuten, etc.
  • Flexibility of integration or transfer
  • Configurability of key workflows and business rules
  • System performance and scalability: Can it support the forecast volumes of transactions and the desired response times for key transactions and interactions between systems.

What Next?

This list can help you to define business requirements or develop an RFP. However it is not just the fit of the proposed OMS to the business. There are also other criteria to consider before choosing an OMS, which include the support that a software vendor could provide and also the future development roadmap.
If you know others who might be interested in this topic, then please feel free to share it!


Hi, I am the Founder and Editor-In-Chief of
I launched to share the fruits of my experience designing order management, fulfilment, home delivery and customer service systems and processes for ecommerce retailers.

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