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graphic showing how order management systems track orders and manages people, processes and data connected to the order
What is order management?

Order management is the tracking of orders from inception to fulfillment, and the management of the people, processes, and data connected to the order.

What is an order management system?

An order management system (OMS) is a digital way to manage the lifecycle of an order.¹ It tracks all the information and processes, including order entry, inventory management, fulfillment, and after-sales service. An OMS offers visibility to both the business and the buyer. Organizations can have near real-time insight into inventories and customers can check that when an order will arrive.

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How does order management work?

The customer places the order through an automated form. A sales team member checks the details and confirms the order.


A warehouse employee confirms shipping details, generates an invoice and fulfills the order — pick, pack, and ship.

Inventory management

Inventory levels are monitored as they fluctuate with the demands of the business.

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Why is order management important?

Order management touches virtually every system and process in the supply chain. Most companies no longer contain order management within their organization. They involve multiple partners, such as parts and components suppliers, assembly and packaging services or distribution centers — making it easy to lose visibility and control of an order. This results in costly manual processes to complete and deliver the order without errors. An OMS can help control costs and generate revenue by automating manual processes and reducing errors.

Externally, order management has a direct impact on how a customer perceives a business or brand. In an omnichannel environment, customers expect a seamless experience. A customer may order online but have questions and complete the order through a call center. As the order is being fulfilled, the customer expects to see updates like emails along the way. If there is a problem, they may want to return it through a physical channel such as a store. Each point in the journey presents an opportunity to provide a great customer experience and boost retention and revenue. The omnichannel journey also presents opportunities to make up-sell and cross-sell recommendations and grow revenue.

What to consider when evaluating order management software
See why IBM is a leader The 2023 Order Management Market IHL Study

Explore the key trends and drivers that make Ibm Sterling OMS a leader in the market

IBM Sterling OMS overview video

Find out how IBM Sterling supply chain applications for inventory and order management offer fast, flexible and responsive solutions for B2B and B2C commerce.

Demo: The perfect order, everytime

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Key features of effective order management

View the entire supply chain and isolate events to anticipate problems and develop more efficient processes.


Tune order management processes to an organization’s business rules and performance goals.


Break orders or events into unique work items that can be channeled to the appropriate systems or resources.

Real-time inventory

Get a single view of inventory, see what’s in stock, in transit and current demand levels — reducing the need to expedite shipments or maintain excessive safety stock.

Delivery and service scheduling

Match delivery commitments to inventory, resources, and skills; allow service requests to be addressed more efficiently.

Customer engagement technologies

Give customer-facing personnel a view of the customer, back-end inventory, and resources so they can run transactions more efficiently.

Fulfillment optimization

Analyze data and recommend options that consider how and where customers want orders that are shipped, time-to-delivery, and cost.

Order management case studies JOANN Stores

See how JOANN Stores was able to pivot its supply chain to handle skyrocketing online orders during COVID-19 by working together with IBM.

Eileen Fisher

Fashion retailer Eileen Fisher built a single pool of inventory across channels to improve trust in inventory data, execute more flexible fulfillment and cut customer acquisition costs.

Parker Hannifin Corporation

Manufacturing giant Parker Hannifin uses an order orchestration framework that helps deliver a unified buying experience and provides insight into inventory, order and customers.


Home improvement retailer hagebau drives higher customer satisfaction with an integrated order management system.

Order management FAQs
What are the basic steps of the order management process?
  • Inventory availability: A customer or sales team verifies that inventory is available as they review various products or services.
  • Order: The customer places the order across a range of possible channels — web, mobile, call center, stores, marketplaces, and others.
  • Verification: A sales team member or an automated system verifies with the customer that the order is placed and collects or records the pertinent data for the order — name, address, telephone contact, email, promotional codes, and other data.
  • Inventory promising: The system or team member matches the product or service to fulfill the order.
  • Fulfillment: The product or team is dispatched through a distribution channel such as ship-from-warehouse or distribution center, ship-from-store, pickup-in-store, online download, or a sales person simply hands over the item. Fulfillment is verified as well — customer sign-off for the completion of a service.
  • Service: Making an appointment, scheduling installation or delivery services, or even exchanging or returning a product. This may be the first step in a new business process but can also be associated with order management.
What trends associated with order management make the process more complex?

Order management can quickly become complex, particularly when large volumes or multiple sales and distribution channels are considered. These trends add to the complexity:

  • Multichannel. Multiple physical stores or locations, online or digital channels, and call centers to conduct business and manage orders. Transactions and customer interactions are discrete to each channel.
  • Omnichannel. The ability for customers to seamlessly navigate across channels to conduct business and the ability for organizations to adjust processes to address customer expectations as they do so. For example, a customer buys on the web, changes the order through a call center and picks up the order in a physical store.

Computerized order management systems (OMSs) have evolved to handle this growing complexity and help process orders more efficiently and profitably.

What is distributed order management?

At the heart of an OMS is the distributed order management (DOM) capability, software that enables an OMS to intelligently route orders to the optimum destinations or resources for fulfillment. DOM is critical to managing the business processes associated with an order and helps deliver a seamless customer experience across channels.

Which omnichannel capabilities could benefit my business?

Use the order management benefits calculator, which can provide an estimate of potential incremental gross margin benefits from implementing omnichannel capabilities such as BOPIS, BORIS and ship-from-store.

Calculate your potential benefits
How can I speak to an expert?

Book a consultation with an IBM expert to see how your organization can benefit from IBM Sterling Order Management or deploy with help from our Business Partners.

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Order Management Products
IBM Sterling® Order Management

Deliver the perfect order with a complete omnichannel order fulfillment platform built for sustainability.

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IBM Sterling Intelligent Promising

Offer a seamless, efficient omnichannel experience that improves retail conversion rates, reduces shopping cart abandonment, and drives sales.

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IBM Sterling Configure, Price, Quote

Transform and automate the configuration, pricing, and quoting of complex products and services.

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Order management resources IBM Sterling OMS fosters freedom of technology choice

Learn how IBM Sterling OMS helps you drive customer satisfaction, increase fulfilment profitability and support new digital and in-person customer experiences.

Blog: The future of order management solutions

The future of order management solutions: freedom of choice and flexibility

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Take the next step

IBM Sterling Order Management helps you deliver the perfect order with a complete omnichannel order fulfillment solution built for sustainability. Merge all your sales channels onto one fulfillment platform that helps you accurately track inventory levels, coordinate third-party logistics, organize customer orders, shipping options and returns management, all while reducing shipping costs.

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"What is an OMS and Why Do I Need One? (link resides outside ibm.com)", George Kokoris, Supply Chain 24/7, 28 June 2018