The eCommerce world has evolved to the point where managing a business in this field may feel like a juggling act. The ever-rising customer expectations don’t seem to help the situation. Luckily, there are several tools you can leverage to make your work easier. The two most notable are order management systems (OMS) and enterprise resource planning (ERP) systems.
But can an ERP serve as an effective order management system? Perhaps even vice versa? Although these two systems might seem similar, OMS and ERP provide different functionalities and excel in different areas of business operations.
So, what’s the difference between OMS and ERP and which is best suited for your business needs? Find out by reading on.
What is an Order Management System?
An order management system is a specialized platform designed to manage the lifecycle of customer orders across multiple sales channels. Its primary focus is to streamline the order process, from order placement to fulfilment and delivery, through the following features:
- Centralized order processing:It consolidates, captures and tracks orders from various channels
- Inventory management:Provides extensive visibility on the levels of inventory across locations to optimize stock levels.
- Fulfillment optimization.Coordinates the process of order picking, packing and shipping to ensure timely delivery.
- Returns management. Simplifies the process of returns and exchanges while maintaining customer satisfaction and streamlining inventory restocking.
- Customer experience enhancement.Improves customer satisfaction and loyalty by providing a seamless, flexible order experience tailored to customer expectations and preferences.
A top-of-the-range Order management system will ensure that orders are processed and fulfilled efficiently, accurately and cost-effectively from start to finish, which in turn enhances customer satisfaction and loyalty.
What is an ERP System?
An Enterprise Resource Planning (ERP) system is a software platform that integrates various business processes into a unified system that manages day-to-day business activities. At their core, ERP systems are designed to provide an overarching view of everything that is happening in a business, including:
- Finance and accounting
- Supply chain management
- Human resources and payroll
- Inventory and production.
ERP systems are built to be the backbone of an organization’s operational infrastructure, with the overall aim of improving efficiency and facilitating better decision-making through real-time data and analytics.
OMS vs. ERP. What are the Differences?
Both these systems offer great functionality and have many similarities, including gathering and analyzing information, automating tasks, integrating with other tools and providing adaptable configuration options to meet changing business needs. However, they also differ in several ways:
- Primary function:An OMS primarily manages order processing and inventory for sales channels, while an ERP integrates core business processes across departments.
- Focus area:OMS emphasizes order lifecycle management and fulfilment efficiency, whereas ERP prioritizes comprehensive business and operational integration.
- Use case:OMS is best for e-commerce, retail, and multi-channel businesses, while ERP is ideal for businesses needing a centralized management of all operations.
- Implementation:OMS offers quicker and easier implementation, focusing on specific workflows, whereas ERP implementations are longer and require more know-how due to extensive integrations.
- Cost:OMSs are typically less expensive due to their narrow functionality, while ERPs tend to be more costly because of their broader scope and extensive features.
Which One Is Right for You?
That’s the wrong question. The right question is, ‘What are my needs’. Choosing between an OMS and an ERP comes down to what your specific business needs are, your growth plans and your budget, so there is no right or wrong answer here.
If your business focuses a lot on managing orders, inventories, and logistics, go for an OMS. In contrast, an ERP will be ideal if you need a comprehensive solution that manages the different aspects of your business, such as accounting, human resources, and so on.
Bear in mind, also, that although ERPs provide more functionality, they can create data silos that result in bottlenecks in order management processes. On the other hand, an OMS does an excellent job at order management but will often struggle to scale up as other parts of your business grow.
Can You Use an ERP and OMS Together?
Yes. In truth, they can complement each other to deliver powerful results. Together, these systems provide a wealth of high-quality data across the whole organization, thereby enhancing overall efficiency and fast decision-making. If you already have an ERP system, adding a dedicated order management system will greatly complement the functionality of your ERP.
Achieve More With Deck Commerce
Trying to take your business to the next level? An OMS from Deck Commerce might just be the right solution for you. As one of the most powerful SaaS order management platforms for direct-to-consumer retailers, this one should help you optimise your entire order management lifecycle for great results that will surprise you!
Don’t believe us? Find out more for yourself at deckcommerce.com.
