What are B2B order management systems?
A B2B order management system is a software solution that helps companies manage the entire process of receiving, tracking, and fulfilling B2B customer orders. It tracks and updates order statuses from the moment an order is placed until it is delivered.
Unlike standard order management systems that cater to business-to-consumer transactions, B2B systems are designed to provide advanced features like custom and complex pricing, large volume handling, multiple payment terms, contact management, and integration with other business systems like ERP and CRM.
80% of B2B customers expect a seamless experience similar to B2C transactions, with a focus on personalisation and real-time interaction.
By adopting advanced B2B order management solutions, you can improve operations, boost efficiency, and build stronger relationships with your clients by proactively resolving common customer problems.
Why is order management important for B2B?
Effective order management is important for B2B operations, not only for maintaining a customer-centred process but also to ensure efficiencies across the entire ordering system.
B2B order management is often a complex process.
With a B2B order management system, you can reduce manual errors, speed up the order processing time, and ensure that inventory levels are accurately tracked. This leads to faster fulfilment and fewer mistakes and improves overall customer loyalty by providing a more reliable and transparent ordering experience.
A survey in 2023 reported that nearly 66% of B2B buyers found order fulfilment and tracking to be one of the most challenging aspects of the B2B customer journey.
B2B order management systems can help you scale your business by automating repetitive tasks and integrating with other essential systems, helping to provide a seamless flow of information across the wider business.
The disadvantages of manual B2B order management systems:
- Order errors: Without a robust system, there is a higher chance of mistakes in processing orders, such as wrong quantities, incorrect items, or shipping to the wrong locations.
- Delays in fulfilment: An inefficient system can cause bottlenecks in the order processing workflow, leading to shipping delays.
- Poor inventory management: A weak order management system often lacks proper visibility into real-time inventory levels, resulting in issues like stockouts or overstocking.
- Manual processes: Without an automated system, businesses may rely on manual data entry, which is time-consuming and prone to errors.
- Limited scalability: As a business grows, an inadequate system will struggle to handle larger volumes of orders, more complicated customer demands, or additional sales channels.
- Lack of data for decision-making: Without accurate, real-time data, businesses cannot make informed decisions about sales trends, customer behaviour, or inventory management, leading to missed opportunities or inefficiencies.
- Customer dissatisfaction: Ultimately, the combination of errors, delays, and poor communication damages the customer experience, impacting negatively on relations and retention.
- Risk of non-compliance: Legalities and regulations play a crucial role in ensuring that businesses comply with various laws related to commerce, data security, and contract enforcement. These legal considerations impact how companies process, track, and manage orders, from individual industry regulations to data privacy, tax compliance, and anti-money laundering.
Benefits of an efficient B2B order management system
Order management is vital for B2B operations because it helps manage the unique demands of business transactions. A robust system simplifies B2B complexities by automating and optimising the order process from start to finish.
Improved order accuracy
B2B order management systems automate the order process, reducing the need for manual intervention and minimising errors. This leads to improved order accuracy and faster order fulfilment, enhanced with real-time checks on inventory and customer data, and products which are delivered as specified.
Faster order processing
Automated B2B order management streamlines workflows and simplifies tasks, speeding up the entire order-to-delivery cycle. As a result, customers receive goods faster and with greater order accuracy.
Cost savings
The IDC (International Data Corporation) has found that businesses using order management systems can reduce operational costs by up to 20%. B2B order management software reduces operational costs by eliminating inefficiencies, cutting down on manual labour, and reducing the risk of errors that can lead to costly returns or adjustments.
Scalability
An automated B2B order management system supports business growth by efficiently handling an increasing volume of orders and complicated transactions without a proportional increase in operational costs.
Enhanced inventory management
Real-time visibility into stock levels helps you optimise your inventory and avoid issues like overstocking or stockouts. This not only saves costs but also ensures that products are available when customers need them.
Better customer service and satisfaction
A B2B order management system can handle personalised pricing, discounts, and multiple payment terms, which are common in B2B transactions. This flexibility allows businesses to offer customised solutions to their clients, improving the overall customer experience.
Data-driven decision-making
The integration of the B2B order management system with other business tools – like ERP and CRM – provides a unified view of the entire order lifecycle, enabling better decision-making and allowing you to respond more swiftly to market changes and customer demands.
Key features of a good B2B order management system
The key features of a good B2B order management system include a variety of functions which allow a business to automate as many elements of the order process as possible, as well as benefiting client relationships and providing end-to-end visibility.
Order processing
Order processing automates the entire workflow, from order entry to invoicing and shipping, ensuring orders are handled quickly and accurately. This feature is particularly important for B2B customers who often deal with bulk orders, custom requirements, and specific shipping schedules.
Inventory management
B2B order management systems provide real-time tracking of stock levels, reordering alerts, and insights into inventory turnover, helping businesses maintain optimal inventory levels. For B2B, this is crucial due to the large quantities and demands involved.
Customer Relationship Management (CRM) integration
Seamlessly integration with CRM systems provides a complete view of customer interactions and order history, allowing for better relationship management and personalised service. This feature helps B2B businesses manage client relationships and cater to individual customer needs.
Reporting and analytics
Good B2B order management software offers detailed reports and insights into sales trends, order fulfilment times, and inventory performance, enabling data-driven decision-making. For B2B companies, this allows for strategic planning and optimising operations based on customer demand patterns.
Custom pricing and discount management
75% of B2B customers prefer sales processes that do not require talking to sales reps. B2B order management systems support flexible pricing structures, bulk discounts, and customer-specific pricing agreements, which are essential for B2B transactions that often involve negotiated rates and complex pricing tiers.
Multichannel order management
Many B2B order systems are capable of managing orders from various sales channels, such as online platforms, sales reps, and EDI (Electronic Data Interchange), consolidating them into a single system for efficient processing. This is critical for B2B businesses that operate across multiple sales avenues.
Advanced payment handling
You can use B2B order management software to manage various payment methods and terms, including credit, purchase orders, and delayed payment options, which are typical in B2B environments where transactions are often based on agreed payment schedules.
Compliance and security features
B2B order management systems ensure that all orders comply with industry regulations and standards, providing secure data handling and maintaining customer trust. This is especially important for B2B customers who need to adhere to specific legal and industry requirements.
How to choose the right B2B order management system
Choosing the right B2B order management system involves several key considerations to ensure it meets the unique needs of your business. These include:
- Scalability: Choose a system that can grow with your business. It should handle increased order volumes and expand its capabilities as your company evolves. Scalability is especially important in B2B, where business growth can lead to significantly more complex order management needs.
- Integration capabilities: Ensure the system can easily integrate with your existing software, like ERP, CRM, accounting, and logistics platforms.
- User-friendliness: The system should be easy to use for your team, with intuitive interfaces and minimal training required. A user-friendly system reduces errors and improves adoption rates among employees.
- Cost: Compare the cost of the system against the benefits it provides. Look for a solution that offers the best value by reducing operational costs, improving efficiency, and supporting your business’s growth objectives.
- Customisation: Look for a system that offers flexibility to customise workflows, pricing models, and reports. In B2B, where each customer may have different terms and conditions, the ability to tailor the system to your specific needs is a major advantage.
- Customer support: Choose a system from a reputable provider with strong customer support. Reliable support is essential for quick resolutions to any issues that may arise, ensuring minimal disruption to your business operations.
- Reporting and analytics: A good B2B order management system should provide comprehensive reporting and analytics to help you make informed decisions. Look for features that offer insights into sales trends, order fulfilment performance, and customer behaviour.
B2B order management glossary
- B2B Order Management System (OMS): A software platform used to manage and track orders from inception to fulfilment specifically designed for B2Bs.
- ERP integration: The process of connecting the order management system with enterprise resource planning software.
- Order fulfilment: The complete process from receiving an order to delivering the product to the customer.
- Inventory management: The supervision of non-capitalized assets (inventory) and stock items.
- CRM integration: Connecting the order management system with customer relationship management software.
- EDI (Electronic Data Interchange): A standardised method for transferring data between different companies electronically, commonly used in B2B transactions to streamline order processing and reduce manual entry.
- Purchase Order (PO): A formal document issued by a buyer to a seller specifying the types, quantities, and agreed prices for products or services to be purchased.
- Order Lifecycle: The complete journey of an order from creation to fulfilment and, if necessary, returns and refunds, encompassing all touchpoints and processes involved.
- MOQ (Minimum Order Quantity): The smallest amount of a product that a supplier is willing to sell, is often seen in B2B settings where bulk buying is common.
- SKU (Stock Keeping Unit): A unique identifier for each distinct product and service that can be purchased, and used for inventory management and order tracking.
- Net Terms: A type of payment arrangement in B2B transactions where the buyer has a set number of days (e.g., Net 30) after the invoice date to pay the seller.
- RMA (Return Merchandise Authorisation): A process for managing product returns, providing a way for businesses to authorise, track, and process returned items.
- Dynamic pricing: Adjusting prices in real-time based on factors like demand, stock levels, or customer-specific agreements, which is a valuable feature in B2B where prices are often negotiable.
B2B order management FAQs
What is the order management process?
The order management process is the series of steps from receiving and processing a customer’s order to delivering the product or service and managing post-delivery tasks like invoicing and returns.
Is order management part of procurement?
Order management is not typically part of procurement, instead, it focuses on processing and fulfilling customer orders, whereas procurement deals with acquiring goods and services for the company.
What is the difference between CRM and order management systems?
CRM manages customer relationships and interactions, while order management systems handle the processing and fulfilment of customer orders.
What is the difference between B2B and B2C order management?
The difference between B2B and B2C order management lies in the complexity of transactions, where B2B involves handling larger volumes, custom pricing, and multiple payment terms for business clients, while B2C typically deals with simpler, direct-to-consumer sales.
What are the key features of a B2B order management system?
Key features include automated order processing, real-time inventory management, integration with ERP and CRM systems, customisable pricing, multi-channel support, and detailed reporting and analytics.
How does a B2B order management system integrate with other business applications?
It integrates with other applications like ERP and CRM through APIs and data connectors, enabling seamless data flow and consistent information across different platforms.
Can it handle custom pricing and special terms?
Yes, most B2B order management systems can manage custom pricing, volume discounts, and specific payment terms tailored to different clients or orders, allowing for flexible and personalised transactions.
How do B2B order management systems improve order accuracy and reduce errors?
B2B order management systems improve order accuracy by automating workflows, implementing validation checks, and providing real-time updates, the system minimises manual errors and ensures that orders are processed correctly.