The Forrester Wave™: Order Management Systems, Q2 2023

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DOM vs. OMS: What’s The Difference Anyway?

And what could these technologies mean for your business?

A true logistics showdown

Reviewed By Michelle Soriano

Dec 22, 2023

Distributed Order Management System vs. Order Management System

Does your business rely on omnichannel sales? If so, you need order management software.

There are two broad classes of technology available: order management systems (OMS) and distributed order management (DOM) systems. Both of these aim to improve customer satisfaction and streamline the flow of information across commerce platforms. But there are some subtle differences you need to be aware of.

The right platform will help you exceed customer expectations. It will also help strengthen your brand image and make your business more efficient.

Here, we’ll talk through key differences, highlight real-world applications, and help you decide which order fulfillment technology will help you meet your organizational goals.

Understanding order management systems (OMS)

An order management system sits at the center or is the brains, of an operation. An OMS consumes information from the frontend and backend, including sales, pricing, inventory, and more, in order to give users the most accurate, real-time view of inventory. 

You can gain real-time visibility into the order management process when you utilize an OMS. You can also identify potential pain points that can harm the customer experience.

What is an order management system, and how does it work?

What is OMS software, exactly? In simple terms, it’s a technology that provides visibility and order optimization from before the buy button through to fulfillment. 

Here’s a basic rundown of how order management works if a brand or retailer is using a fulfillment center:

  • The customer searches for the product they want (via a search engine or the brand website).
  • The customer places an order once a product is found and they determine it is in stock
  • The order & data go to a fulfillment center
  • A warehouse employee confirms the order details (e.g., the shipping address and package contents)
  • Inventory levels are adjusted to reflect the sale once the item is picked, packed, and shipped

All these processes were traditionally tracked using separate processes and software. This disjointed approach often led to poor inventory visibility. It also increased the risk of stockouts or other shortages.

And keep in mind there are many ways to fulfill an order. This might be through a drop-ship vendor, 3PL, or even using store stock to fulfill.

Order management systems provide you with one view of this data in order to provide real-time visibility into stock availability.

OMS technology reduces the workload on your staff by reducing or eliminating certain manual processes. It also optimizes fulfillment, letting you get your products into the hands of your customers sooner.

Exploring distributed order management (DOM) systems

Distributed order management falls under the umbrella of OMS, but DOM is a smarter, more advanced sibling that allows for quick optimization of sourcing and fulfillment based on factors like inventory availability, proximity to the consumer, and estimated shipping costs.

Think of distributed order management as an efficiency multiplier. Order management systems are already more efficient than traditional fulfillment strategies. What is distributed order management, and why does it matter?

Distributed order management is the advanced process of orchestrating order sourcing and fulfillment. It uses rule-based procedures and order fulfillment logic (OFL).

A DOM reviews many factors when processing a customer order. Typically, distributed order management platforms look to do three main things:

  • Improve profits by choosing the best location to ship from
  • Lower the delivery timetable
  • Increase customer satisfaction

DOM can also reduce your transportation costs. How? By reducing the distance between fulfillment locations and customers. This technology improves your inventory management capabilities. They also help you make the most of your regional distribution network.

Distributed order management software can also help to reduce carbon emissions. They cut out wasteful shipping from the supply chain. DOM benefits everyone, including businesses, customers, and the environment.

Key differences between DOM and OMS

There are five key differences between traditional OMS and DOM technology. Here’s a brief overview of each.

1. Scalability and flexibility

Distributed order management solutions are more agile and flexible than a standard OMS. DOM can support vast, complex distribution and fulfillment networks. A traditional order management system is better suited for a linear distribution model.

Switching over to DOM technology can drive business growth and help you save money. DOM can also support multiple sales channels for scalability and organizational flexibility.

2. Multi-channel support

Distributed order management systems also support multi-channel purchasing options This enables you to better meet your customers’ needs.

Offering omnichannel support has been vital in the modern e-commerce ecosystem. Today’s consumers expect a seamless interaction with your brand, regardless of the channel they use. With distributed order management you can process orders on third-party platforms, your website, social media channels, and more.

3. Inventory visibility and management

DOM technology works together with your enterprise resource planning (ERP) solution and warehouse management system (WMS). This provides real-time inventory visibility. Keeping a close eye on stock levels can prevent outages and maintain as much business liquidity as possible.

4. Order routing and optimization

Leading DOM platforms allow for the ability for users to apply custom rules and advanced logic to find the ideal fulfillment location. In contrast, a standard OMS simply routes the order to a fulfillment center. They don’t consider distance to the customer, stock levels, or delivery times.

DOM platforms speed up order entry and fulfillment can lower your operating costs and speed up your delivery times. The results? Streamlined fulfillment processes and happier customers.

5. Integration capabilities

An OMS can integrate with other platforms. But modern DOM technology is more versatile and nimble than ever before.

With application programming interfaces (APIs), you can connect your distributed order management system to any other technology or platform using APIs—such as your ERP, WMS, and other key business platforms.

Bringing your foundational tech together reduces the risk of human errors during data intake. It also speeds up the flow of information across your organization.

Real-world applications

Adding an order management system to the mix can yield significant benefits. But distributed order management systems benefit businesses and their customers even more. Let’s look at a few Fluent Commerce clients as an example.

First, there’s Psycho Bunny. This clothing brand has gained traction among an international audience.

Since 2005, Psycho Bunny has enjoyed stable growth. However, order management limitations prevented the brand from taking its next leap forward. To solve this problem, the company adopted Fluent Order Management, a distributed order management system.

After implementing Fluent Order Management, Psycho Bunny experienced:

  • A 33% reduction in average time to deliver
  • A 50% reduction in split shipments
  • A 93% reduction in short shipments

These sorts of impressive results aren’t the exception. They’re the rule.

Another Fluent Commerce client, Breitling, is a historic brand founded in 1884. The company’s staying power is due to its ability to adapt to changing market conditions.

As part of this long-standing tradition, Breitling also adopted Fluent Order Management. In doing so, it increased online sales by 20% in just a few short months and elevated the customer experience.

Challenges and considerations

Starting to use any new technology can be challenging. That’s especially true if you’re unfamiliar with order management systems. Where do you begin?

You can reduce your challenges by choosing the right type of platform. Partnering with the right vendor makes things even easier. You must check both of these boxes to feel confident in your decision.

When choosing between OMS and DOM, consider the following factors:

  • Budget
  • Business size
  • Complexity

Generally speaking, DOM will be a bit more costly than a standard OMS. But you’ll enjoy significant short- and long-term returns that offset this initial investment. 

Next, invest some time in selecting a vendor that aligns with your business needs. We suggest creating a pros and cons list for potential vendors, reading testimonials, and engaging with them for more information before reaching a final decision.”

Distributed Order Management from Fluent Commerce

A distributed order management system can deliver long-term value to your organization. It can also insulate it from challenges in the future.

As you start your search, consider factors like short and long-term costs. Think about how easy or hard it will be to integrate a new system. What support do you need internally in your organization? 

Take advantage of demos so you can see a solution in action before you make a commitment. Want to explore distributed order management systems in greater depth? Book a free demo of Fluent Order Management, a best-in-class DOM solution.


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