Automated Order Management Explained: Strategies, Tools & Future Trends
Human Touch—Errors Everywhere: Mistakes are common in manual order management, causing inefficiencies and losses. Automating these tasks can reduce errors and streamline the process effectively.
Robots to the Rescue: Automating order management improves accuracy and efficiency, taking on repetitive tasks and allowing human employees to focus on more strategic activities.
Time Saved is Time Earned: Automation speeds up order processing, reducing delays and customer dissatisfaction. This time efficiency leads to better customer service and increased satisfaction.
Cost-Effective Automation Magic: Automating order management can significantly reduce operational costs by minimizing manual labor and correcting errors before they become expensive problems.
Future-Proof Your Business: Adopting automation in order management is a step toward future-proofing a business, keeping it competitive and responsive to rapidly changing market conditions.
To err is human, to automate order management is genius.
A lot of time is wasted on mistakes-prone tasks. (Here’s an example: manual data entry.)
In this article, you’ll discover the very tasks holding your order management process back and learn how to automate them.
Need expert help selecting the right tool?
With one-on-one help, we guide you to your top software options. Narrow down your software search & make a confident choice.
The goal is to significantly improve post-purchase operational efficiency.
Let’s begin.
What is Automated Order Management?
Automated order management simplifies how you process and get orders out the door.
This modernized process eliminates manual data entry, minimizes the risk of errors, and speeds up processing and delivery times, so your fulfillment team can breathe a little easier.
It’s an efficient tech that runs itself. It only requires minimal human intervention for rule-setting, decision-making, evaluation, and testing.
Let’s see how this hands-off order fulfillment process works from start to finish.
How Automated Order Management Works
Order management is broken down into different stages. Each stage involves time-consuming and error-prone manual tasks that automation can fix for you.
Here are some of the most critical ones you should automate:
Order capturing and validation
Connecting your various sales channels—ecommerce platforms, marketplaces, and even social media pages—with your ERP system can speed up order processing time.
When you have all your order data and stock availability in one place, an automated order processing system can handle tasks like:
- Validating customer details
- Checking inventory
- Assigning order numbers
- Initiating order confirmation emails
The entire process becomes faster and more efficient, meaning you can push the order forward ASAP.
Order routing and fulfillment
Vetted orders need to go straight to picking and packing, and automation ensures their smooth and steady movement.
An automated order management system can:
- Locate the correct items in your warehouse (even pick the right warehouse, if you have many)
- Recommend the most efficient picking route within the warehouse
- Suggest the most cost-effective packaging materials and sizes based on the item
Fewer mistakes at this stage mean fewer customer complaints and better use of resources.
Order shipping
When it’s time for the packaged item to begin its journey beyond the warehouse, you can rely on automation to:
- Generate and print shipping labels
- Create tracking links for customers
- Choose the best carrier for the delivery based on shipping cost, speed, or location
All these work together to create a seamless shipping experience for you and your customers.
Order returns
Returns are an inevitable part of business, but automation can make them far less of a headache.
A modern order management system can generate:
- Generate return labels
- Update stock records automatically,
- Streamline communication with the customer.
Simplifying these steps is a huge time-saver, and can really give customers some peace of mind. It increases the odds that they’ll buy from you again.
I’ve only outlined the most critical but basic tasks you can automate. Depending on your order management system, you can do a lot more.
But before we dive into that, I’ll highlight a few reasons automating order management should be a priority for your ecommerce business.
Why You Should Automate Order Management
Scaling operations is great news.
But it also means more throbbing headaches from pricing inefficiencies, sluggish manual processes, and software solutions that refuse to talk to each other.
Here’s how automated order management brings everything back in sync—and, in the process, stop you from raiding the medicine cabinet for a pain reliever all the time:
- Improve order accuracy. Human errors in order entry and inventory tracking can cause delays and costly returns. Retail returns are expected to hit $890 billion in 2024—automated order management can help protect your business from having a huge share of that costly pie.
- Elevate customer experience. Automated systems can use data insights to personalize service and anticipate customer needs. Considering 73% of customers prioritize experience when choosing what to buy, this is a major advantage.
- Boost time and cost efficiency. Automated systems expedite order processing to fulfill more orders in less time. According to Deloitte, once intelligent automation is up and running, companies see a 32% average drop in costs.
- Gain real-time inventory visibility. Integrating real-time data from sales channels and warehouses prevents overstocks and stockouts. Forrester’s study on IBM Sterling Order Management found that companies can increase profits by up to $4.2 million through improved visibility.
- Maximize operational scalability. Automated systems can help adjust your workflows and resources. You can allocate more resources during peak periods and scale back during slower times.
The next section discusses how you can transform your ecommerce order management to achieve these benefits.
Your competitors are automating orders while you're drowning in manual entry. Time to explore the best order entry tools and catch up.
How to Implement Automated Order Management
Automation makes order fulfillment run more efficiently, but setting it up requires guidance. Here are some industry-recognized tips to get you started:
1. Identify your biggest challenges
Where do things keep getting messy when fulfilling orders?
Take a hard look at your metrics to find the answer. They’ll point you straight to the friction points in your process.
If your undelivered order rate is climbing, it could mean your system is storing duplicate or incorrect addresses. Or maybe it’s time to rethink your carrier.
Beyond that, note down tasks that seem to trip you up often, like generating and printing shipping labels or matching orders to inventory.
Based upon the maturity of an organization, almost every task could be captured into an automated ordering process.
On the frontend, if there is any manual entry of orders or converting of orders from one system to another, that practice needs to stop.
After identifying what these are, don’t rush into a full system overhaul.
Focusing on each workflow—whether it’s order processing, routing, shipping, or returns—will help you better address the different steps involved.
Lastly, set clear goals. Do you want to cut processing time by 30%? Or perhaps, boost order accuracy by 15%?
Defining these targets gives you a clear direction moving forward.
2. Find the right tools for your goals
Automating your order process won’t work without the right order management software (OMS).
An OMS manages the entire order life cycle—from the moment a customer completes their purchase to when they receive their items.
When choosing an OMS, you need to set a few requirements. Make sure it…
…is the right fit for your business
Every OMS has its own specialty. Some are built for high-volume retailers. Others handle more particular business needs.
For example: BrightPearl is a great solution for multichannel sellers because it can sync sales and inventory both online and offline in real time.
On top of this, it has Automation Engine, which lets you define simple rules for picking to shipping for each channel you manage.
…solves the order processing issues plaguing your workflows
The main reason you need to meet with your team before jumping into automation is to make sure you end up with a tool that actually solves your pain points.
Let’s say you’ve noticed a spike in packaging material expenses and want to cut costs by 10%.
Linnworks can help keep items secure during delivery without wasting unnecessary resources. It allows you to set predefined packaging material criteria, so packers always use the right size and type of packaging.
…integrates well with your tech stack
Your OMS should get along well with your other tools like:
- sales channels like your ecommerce platform,
- customer relationship management software (CRM),
- enterprise resource planning software (ERP),
- inventory management software (IMS),
- and warehouse management software.
Tools like BigCommerce and Shopify have robust APIs and wide-ranging app marketplace to easily connect your OMS with the rest of your operations. (We’ll dig into this further in a jiffy.)
If you’re looking for more OMS recommendations, check out our top 10 picks:
Another tool you might need to improve automation? An inventory management solution (IMS).
Some brands face unique challenges when automating order management.
Take 123 Baby Box, for example.
Founder Zarina Bahadur shares, “Our biggest issue was ensuring inventory synchronization across sales platforms. This problem led to overselling—we were selling more products than we had available.”
You need better stock visibility to keep your order management process running flawlessly.
While IMS solutions primarily focus on real-time inventory movement pre-purchase, they also help you track how products flow through your business from stocking to shipping.
Using an IMS in conjunction with an OMS prevents overselling and stockouts.
Great news, though: Powerful platforms like Linnworks and Cin7 Core combine OMS and IMS functionalities, giving you a seamless way to manage orders and inventory in one place.
For a complete list of top-tier IMS solutions, see below:
3. Connect your systems and channels
Eighty-two percent of leaders say that a lack of end-to-end visibility is the biggest roadblock to reliable data. Integration is important because you need to form a complete picture of your data.
Especially for a process like order management, which combines the trifecta: order information, stock availability, and customer data.
As I’ve said earlier, your OMS can house all this information, so it needs to connect with your most important tools that gather and store these details.
If not, you’ll have to resort to manual data entry to fix the issue, which completely defeats the point of automation.
You need real-time data for automation to work.
For example: If your systems only update inventory in scheduled batches, there’s a risk that multiple orders will be placed for the same limited stock (very likely to happen during flash sales and big promos!)
Integration is so important to avoid such a costly mistake that also negatively impacts customer experience.
Even better, it can lead to a huge amount of savings for your brand.
Case in point:
A Canadian industrial flooring company fixed their sync issues by linking Salesforce and QuickBooks Online.
They saved $25,000 on manual data entry costs, and were able to automate over $5 million worth of transactions and cut maintenance costs by 90%.
To avoid data silos, you can:
- Choose platforms with a wide range of integrations, like those I mentioned in the above tip.
- Rely on third-party connectors like Zapier which work like universal translators for your tools.
- Go the custom route, but this can be costly. With the help of developers, you can create custom APIs or connections to ensure everything works in concert.
Seamless integration is necessary for creating an automated order management system with minimal disruptions.
4. Build a strong foundation for your workflows
Since you already know your key challenges—if you completed the first tip, that is—you already know which tasks to optimize.
Automation is a time-saver but requires some upfront manual work.
First, you need to set up workflows to get your new system up and running.
Your software will do the heavy-lifting, but you need to set pre-defined rules or criteria for it to follow.
Choosing the right criteria will depend on your business and current pain points. For example, for order routing, you can choose stock levels and customer location as order routing parameters.
Once you’ve defined your rules, feeding them into your OMS varies by platform. Generally, you’ll access the automation settings, which you’ll likely find in your tool’s workflow automation.
You then input the triggers and conditions.
For parcel optimization, it can look like:
“If order weight exceeds X, use Y shipping method.”
Clear, well-thought-out automation rules help your OMS handle these repetitive tasks according to your standards.
As far as keeping inventory data fresh and accurate, you need to invest in technologies like barcode scanners and RFIDs.
Barcodes save your team from data entry, while RFID helps with efficient item detection when picking and packing.
(I'll cover more of this technology in the smart warehousing section under automated OMS trends.)
5. Guide your team to embrace automation
Digital transformation—like migrating to automated order management—often faces barriers. A recent study pinpoints four main factors that cause this resistance:
- Personal barriers. Staff may fear job displacement or feel uncomfortable learning new systems.
- Organizational challenges. Existing company culture and lack of leadership buy-in can slow down the adoption.
- Social influences. Key team members or departments may push back against the change due to power dynamics or office politics.
- Financial factors. Big financial commitments can scare off decision-makers despite future efficiency gains.
With all these concerns flooding your employees’ minds, reassuring and guiding them should be part of your game plan.
Here are some ways you can break their resistance to this change:
- Run pilot tests with a partial rollout to identify potential issues before launching the full system.
- Conduct hands-on staff training and workshops to facilitate the transition.
- Assign a champion or an automation taskforce and create guides to provide ongoing support.
- Involve all stakeholders and gather feedback as you move forward.
- Celebrate success and milestones along the way.
The goal is to make automation feel like an upgrade, not an inconvenience. Showing your team the benefits and guiding them throughout the process will make them more receptive.
6. Measure success and optimize workflows
We’ve come full circle. Just like in the first step, where you pinpointed your biggest challenges, now it’s time to check if automation is actually fixing them.
Here are some key KPIs to track, depending on your goals—according to experts:
If you want to measure order management efficiency, these KPIs are a must:
Undelivered Order Rate to track failed deliveries and their causes.
Order Fulfillment Time to measure how fast orders are processed and shipped.
On-Time Processing Rate to ensure orders go out within the promised timeframe.
Order Accuracy to keep errors in check.
Packaging Safety to track the percentage of orders arriving undamaged.
On-Time Delivery Rate to measure the reliability of deliveries.
Return Rate to help identify why customers send products back.
Inventory Accuracy to flag stock discrepancies.
Packing Team Productivity to monitor efficiency in order processing
With so many moving parts, tracking these KPIs across channels is tough.
But with an OMS, retailers can automate the process and have more time to focus on creating a seamless customer experience.
Average Order Process Time: Depending on the nature of the business, retailers will have different levels of control over the processing time.
Rate of Return: Buyers return one out of five online retail orders, so it’s essential to track this KPI.
Time to Process Refund: It’s essential to have a best-in-class ecommerce return policy that lets customers receive their funds right away.
Perfect Order Rate: Every retailer should achieve a high perfect order rate (at least 90%), indicating efficiency and higher customer satisfaction.
OMS helps you monitor the numbers, but you need a clear strategy for choosing, interpreting, and acting on them.
Pick KPIs that align with your business goals—whether that’s reducing shipping errors, improving fulfillment speed, or cutting down return rates.
Metrics can help identify slow points so you can switch up your automation rules.
Also, look beyond surface-level success—sometimes the real issue is hidden beneath seemingly good numbers.
If, for example, order accuracy looks fine, but your return rate is high, something else might be off.
Your eyes shouldn’t only fall on the latter. You can take a look at your product descriptions and sizing information to see if they’re correct. Maybe your shoppers received items that didn’t meet their expectations.
Automation isn’t one-and-done, so test and adjust regularly to continuously optimize your workflow.
4 Challenges of Automating Order Management (+ Solutions)
Setting up a new system, integrating it with existing tools, or training your team is a lot to take in at first.
There’s bound to be a bit of friction.
Let’s break down the initial hurdles most businesses encounter and streamline your order processing.
1. Uprooting legacy systems
Two-thirds of businesses still run on legacy systems due to security concerns (44%), operational disruptions (37%), and reliability (33%).
Yes, your outdated infrastructure can still fulfill customer orders. However, it’s slow, clunky, and vulnerable to errors and breaches.
Even worse, legacy systems often can’t communicate well with modern tech.
Trying to force automation into an outdated system can result in data silos and frequent crashes. That defeats the purpose of automating in the first place.
solution:
Centralize your tech stack with OMS with purpose-built integration like Linnworks, Cin7 Core, or CRM Creatio.
When Aspire Furniture, a furniture wholesaler, migrated its outdated system to Linnworks, they gained better control over inventory management.
The new system introduced advanced container tracking, forecasting tools, automated label printing, and seamless integration with marketplaces like Debenhams and B&Q.Integration ensures your entire tech stack plays well together.
Opt for cloud-based providers or those with robust API connectivity for smooth communication between platforms.
2. Managing high upfront costs
Implementing OMS for ecommerce platforms can range from around $30 to over $1,000 monthly. Costs climb even higher if you plan to adopt and connect CRM and ERP systems to your OMS.
Training, support, and long-term maintenance costs can also add up.
These expenditures can be slippery slopes for small to medium-sized businesses operating on tighter budgets.
solution:
Invest in an OMS platform that offers scalable solutions and flexible pricing models.
Quickbooks Online’s pay-as-you-go or tiered pricing is perfect if you plan to start small. For a more tailored solution, get a quote from providers like Acumatica or Brightpearl.
Compare the full cost breakdown when comparing different vendors. Don’t forget to ask about any ongoing maintenance costs for fixing bugs, feature add-ons, and updates.
3. Weeding out inaccurate data
As cool as automation is, it isn’t faultless. If you feed it the wrong info, it will skew your process even more.
When that happens, you can’t blame the system.
The finger should point to bad data. It’s a serious problem that affects various industries, including retail.
This culprit always lurks around the corner, costing organizations up to $12.9 million annually.
Solution:
First things first, standardize naming conventions, date formats, SKUs, and measurement units across your systems. Make sure to train your staff on these best practices.
It’s also necessary to monitor data quality metrics (namely: accuracy, consistency, completeness, timeliness, and validity) going forward, so nothing goes astray.
4. Minimizing system downtime and errors
It’s not a matter of if but when—88% of executives expect a major IT incident to occur.
Worse, it’s costly if you’re not prepared. Sixty percent of system failures cost businesses $100,000 and 15%, over $1 million losses.
System crashes happen due to overloads, outdated software, or poor integration between systems.
For your order management system, that translates to order delays, missed inventory updates, or customers being unable to track their shipments.
solution:
Cloud-based solutions with reliable uptime and integration can minimize the risk of downtime and errors. Cin7Core’s OMS and IMS are prime examples.
They integrate inventory management, order routing, and shipping, reducing system failures caused by disconnected systems.
The cloud-based infrastructure offers real-time syncing, high uptime, and scalable performance to handle growing data volumes without crashes.
Of course, regular maintenance (e.g., software updates and data backups) is still key to preventing disruptions.
What worked before might not cut it anymore as your business grows.
Future-proofing order processing automation helps avoid slowdowns, costly errors, and missed opportunities as order volume increases.
Equip yourself with scalable solutions that evolve with future trends in the next section.
Future Trends in Order Management Automation
Even with automated order management, delays, and backlogs can still creep up if your systems don’t grow with you.
The latest tools and tech can help you better predict demand, expedite warehouse operations, and track stock levels across channels.
Here’s the future of order fulfillment processes and why you can’t afford to ignore it.
Increasing adoption of AI and ML
Seventy-one percent of retail businesses today leverage AI (artificial intelligence) to overhaul their operations. And, 25% specifically employ it to predict customer demand and avoid stockouts and overstock situations.
AI and machine learning (ML) allow systems to learn from data, so they can quickly spot order fulfillment patterns with minimal human intervention.
AI and ML in action: Pipe17 and fabric
Order management vendor Pipe17 raised $15.5 million to expand its suite of AI-powered tools across systems.
One of these tools is “Pippen”, the order operations agent that automates order routing and exception handling.
In December 2024, fabric unveiled the AI Order Cloud, an AI-powered Order Management System (OMS) designed to enhance multichannel retail operations.
Some features include an AI assistant, trend detection, and intelligent recommendations.
Smart warehousing through IoT and robotics
The smart warehousing market is set to grow from $22.7 billion in 2023 to $75.7 billion by 2032. Its two main components: Internet of Things (IoT) devices and robotics.
IoT sensors like RFID tags and barcode scanners monitor inventory movement and warehouse machinery conditions.
They notify unusual activities or fluctuating temperatures that could compromise product quality.
On the robotics side, machines do the heavy lifting—literally. They pick, pack, and sort orders, use smart mapping to zip around the warehouse, and optimize picking routes.
Smart warehousing in action: Ocado Group
Ocado Group launches their On-Grid Robotic Pick (OGRP) tech for online grocery and logistics industries.
OGRP robots leverage machine vision and intelligent sensors to identify the right grasp points to pick and pack items without damaging them.
Through behavior cloning, humans can teach these robots to handle specific tasks. The robots get better by learning from their experiences and those of other robots in the system.
Predictive analytics for demand forecasting
AI-driven demand forecasting means fewer stockpiles and lower warehouse costs.
Deloitte found a hypermarket chain reduced store stock by 14% with AI. AI looked at previous sales and trends to know what products to stock up on.
This kept the chain from stocking up on too much and only had what they actually needed. If their inventory is worth $100,000, they could put $14,000 to better use.
AI demand forecasting in action: Inventoro
Cin7 Core capitalizes on this trend by acquiring Inventoro, an AI-powered inventory and order management software.
Inventoro’s AI-driven tools can forecast sales, clear out slow sellers, and automate replenishment in real-time. They all work together to help fulfillment teams avoid last-minute supplier rushes.
Rise of omnichannel order management solutions
Ninety percent of retailers now have an omnichannel strategy compared to less than half four years ago.
Omnichannel solutions blur the line between online and offline shopping by automating parts of the order management process.
No matter where or how customers shop, they receive the same level of service and access to inventory.
Omnichannel order management in action: SmartAction’s Omni-Bot™
SmartAction’s Omni-Bot™ takes omnichannel order management further with virtual agents.
Customers can inquire about order status, place orders, or request returns. It uses 100% natural language processing (NLP) to understand and respond to customer inquiries through voice, text, or chat.
Omni-bot™ can validate multiple data points at once, so self-service support is more efficient and time-saving.
This frees up time for live agents to concentrate more on higher-value tasks like coordinating rush orders or resolving product defects.
Blockchain integration for secure, transparent supply chains
Blockchain solutions spending is expected to come close to $19 billion in 2024.
For ecommerce, blockchain technology automates and secures order management by recording every transaction on a decentralized ledger.
Everyone in the supply chain shares a single, transparent data source, cutting down on misinformation and human error.
Even better, blockchain solutions integrate with emerging technologies like IoT, smart contracts, and AI.
Blockchain integration in action: Deloitte
Deloitte led a blockchain project using IoT (i.e., a real-time positioning tracker) and AWS technology to enhance shipment tracking.
All stakeholders—senders, shippers, and receivers—get access to trustworthy, tamper-proof shipment records. This helped increase transparency and enhance collaboration across supply chain partners.
Final Thoughts
Order management automation frees up your fulfillment team to handle higher-value tasks, like quality control, vendor management, and process optimization.
Start by choosing the right tools, integrating them properly, and setting well-defined rules. Over time, you'll see a smoother, more efficient fulfillment process with fewer errors.
Here are a few more resources to help you optimize your order fulfillment process:
Stay on top of ecommerce trends, tips, and tools by subscribing to The Ecomm Manager newsletter.
Automated Order Management FAQs
Here are some automated order management FAQs to guide you through everything from initial planning to the post-implementation phase.
How long does it take to see ROI from order management automation?
On average, businesses recoup their investment within one to two years through lower overhead costs, fewer errors, and faster order fulfillment.
However, how soon you see ROI from automated order management depends on the scale of implementation.
Are there specific industries where automated order management is more beneficial?
Automation streamlines tedious tasks that otherwise require painstaking manual effort.
Industries that juggle numerous SKUs and heavy order traffic, such as ecommerce, retail, manufacturing, and distribution, benefit greatly from automated order management.
What’s the difference between OMS and ERP, and do I need both?
OMS handle everything related to orders—entry, processing, fulfillment, delivery. ERP systems manage broader business processes like finance, inventory, and supply chain management.
It’s best to invest in both if you want efficient order handling and complete visibility across your business. All-in-one systems like Acumatica offer a full-featured ERP + OMS solution with modules for managing financials, inventory, order processing, and more.
How do I ensure my data stays secure with automated systems?
Order management systems employ built-in security measures.
Cin7 Core, for instance, features two-factor authentication and Transparent Data Encryption (TDE) to protect order information and customer data.
Linnworks has a Vulnerability Disclosure Program that encourages ethical hackers and security researchers to report potential vulnerabilities.
This helps tighten up the safety of their systems and data.
But it’s also on you to set up access controls, run audits, and monitor user access and system logs regularly to maintain top-notch security.
How do automated systems handle peak order volumes during holidays?
Automated OMS streamlines fulfillment during peak holiday times by routing orders to the nearest warehouse with available stock.
The system tracks your inventory across multiple channels and warehouse processes and triggers reorders when stock levels drop below the set threshold.
You won’t have to lose sleep over selling out or flooding your shelves with overstocks during the holidays.
