What does OMS mean? Understanding Order Management Systems

December 1, 2023
4 min.

What does OMS mean? This guide has everything you need to know about Order Management Systems. What are they, how do they work, and their pros and cons.

While keeping up with all the orders your business is getting is a fantastic problem to have, it’s still something that might be slowing down your growth. During this period of rapid expansion, you might start looking for tools that can help you automate and streamline processes within your organization. The typical answer seems to be getting an OMS, but does someone know what “OMS” means? Is it really the tool that will unlock your growth?

Let’s see!

What is an OMS, and how does it work?

First, what does OMS mean? OMS stands for Order Management System. It is a cloud-based software aimed to facilitate order entry and processing for business owners. It helps you centralize, track, and control orders across your sales channels, allowing you to automate and streamline your workflow, gathering key analytics about sales, inventory, and fulfillment.

In other words, it is a tool that helps you manage all your sales channels by organizing them into one place, showing key analytics, and offering automation opportunities within the order fulfillment process.

What is the difference between ERP and OMS?

It’s pretty common to get confused by these terms. 

An ERP, or Enterprise Resource Planning, is a more comprehensive software solution than an OMS. It lets you oversee all aspects of your business: finance, human resources, supply chain, and yes, even order management. On the other hand, the OMS is just focused on managing the life cycle of an order, from inception to fulfillment.

The bottom line is that an ERP isn’t an OMS but probably has one built in.

What is the difference between CRM and OMS?

In this case, the difference is more prominent. A CRM focuses on managing the relationship with your customers (hence Customer Relationships Management), storing and managing customer details, interaction history, and even potential leads. The OMS is only focused on handling orders.

What are the advantages and disadvantages of OMS?

Illustration of Pros and Cons of Order Management Systems

As with everything in life, it has some positives and some negatives. Here is everything you need to know to decide whether an OMS is the right tool for you.

Some key features of an OMS are:

  • Multichannel: centralizes warehouses,  stock, sales, orders, and payments into one place.
  • Automation: Helps you scale through automating the repetitive tasks on the order fulfillment front.
  • Analytics and reporting: Gives you insights that can help you make better decisions for your business.
  • Enhanced Customer Experience: Faster order processing and real-time tracking options can significantly improve customer satisfaction.
  • Cost-Effectiveness: Over time, the automation and efficiency gains can lead to cost savings, offsetting the initial setup costs.

Some downsides of an OMS are:

  • Challenging to implement: Starting to use an OMS means making a structural change to your company and how it operates today. While it’s a bet for scalability, it’ll take time and headaches to get it running smoothly alongside all the other company processes, plus learning how to use it and teaching it to the staff.
  • Vendor Lock-in: Once you've invested in a particular OMS, switching to another system can be as complicated as implementing the first one.
  • Scalability Concerns: When choosing an OMS, focus on its scaling capabilities since, as your business grows, your OMS needs to keep up. You don’t want to get stuck with an OMS that doesn’t solve the main issue it should solve.
  • Hidden Costs: Make sure to understand the plan you are getting, as many features that seemed inclusive at first might turn out to be premium add-ons, leading to unexpected expenses.


We hope this article gave you a concise but comprehensive answer to the question, “What does OMS mean?”. 

An Order Management System (OMS) can be a game-changer for your business if you grapple with the complexities of order fulfillment. While it's not without its drawbacks, the benefits often outweigh the disadvantages. Software like this could be the key to unlocking streamlined, efficient processes that propel your business forward.

If you are in the market for an OMS system, consider an account receivables software to pair it with. Check out our Top 5 collection software for SMEs in 2023.