Order Management Definition

Order management is the collection of processes and actions involved in the successful delivery of a product to a client. Though it is the oldest and most basic cycle of commerce, managing orders in a subscription economy can be a surprisingly complex challenge.

The Evolution of Order Management

In the early days of commerce a customer walked into a shop, selected an item on display, paid for it, and then carried it away. Order managed! But in today’s subscription economy things aren’t always so simple. A variety of players and factors stand between the customer’s selection experience and receipt of the item. These include but aren’t limited to:

Digital shopping windows. Websites are where many customers start shopping, so sites must be clean, fast, and simple to navigate. Website problems can derail order management before it begins.
Production and warehousing. Whether the product is widgets or intellectual services, physical space to store, ship from, and/or work in is key to any order management system. Production and warehousing frequently take place at different physical locations.
Revenue collection. Third party payment services are often used to receive payment, so it’s important to keep this process secure and easy. A cumbersome collection process will make some customers give up, and a security breach can devastate a business reputation and scare customers away.
Delivery. Customers have to get what they pay for, and get it quickly. Strong, transparent relationships with reliable shippers are essential for physical products. Fast and secure broadband connections to sectors of your order management divisions are must haves: if one of them goes offline, the whole process stops.
Customer service. Someday the perfect order management system will be created, and products will flow to consumers in one seamless, revenue-rich tidal cycle. Until then there will be glitches. Resolving bumps along the order management road quickly—and maintaining that road through constant analysis and improvement—is the real secret to satisfied customers. Successful businesses empower customer service personnel with instant access to all phases of the order management cycle, and the decision-making authority to fix problems while they are still small.

In a shrinking digital world, people need each other’s goods and services more than ever, and not all of those services will rely on the same order management system. Understanding how to streamline and simplify yours is the key to success for any modern business.

Get a copy of the IDC MaturityScape: Subscription Business Model Management to understand framework of stages, critical measures, outcomes, and actions required for the effective management of subscription approaches.