Order Management

ERP vs Order Management Software: Which Is Right for Your Business?

The ERP vs order management debate goes well beyond features and costs. You should be looking for a solution that fits your unique workflows, growth intentions, and industry pressures. If you’re in an industry like e-commerce, retail, or third-party logistics, the choice stands between implementing an ERP (enterprise resource planning) system or choosing an order management system (OMS). Using these even for a single part of your operations can shape how efficient operations are and what the customer experience quality and bottom line look like in years to come.

But what distinguishes the two?

An ERP is a broader, centralised platform that combines multiple back-office functions ranging from finance and HR to purchasing, storage and marketing initiatives in a single digital platform.

On the other hand, an OMS is designed to help you deal with the entire order journey, delivering goods to homes, picking up goods from customers for returns, or handling multiple fulfilment partners.

The question remains: Should you go for an ERP or an OMS?

9 minutes

Written by Danielle Allen.

Updated 03/09/2025

Understanding ERP Systems

What is an ERP?

An enterprise resource planning tool integrates finance, HR, procurement, and inventory (sometimes even sales and customer service) to give you a holistic view and a single source of truth for your entire business.

Core Functionalities of ERP

At the core of any ERP is an array of interconnected applications focused on core business processes of the enterprise. This way, instead of working with different tools for finance, HR, stock and supply chain, the ERP unites all functions.

Besides data consolidation, ERP software supports:

Finance and accounting - Use an ERP to collect all financial data in one place, automate your billing, and oversee your accounts payable/receivable.
Inventory and materials management - It monitors inventory and procures goods while simultaneously maintaining the inventory balance in multiple locations.
Sales order and order management - Follows a standard sales process, from creating a quote to processing sales orders and invoicing customers.
Supply chain and procurement - Manages buys, supplier relationships, logistics, and demand planning.
CRM - Maintains customer data, manages prospects for leads, and helps you run targeted marketing campaigns.
Production and manufacturing (when applicable) - Schedules and oversees production schedules, work orders, and quality control for manufacturers.

For an ERP to be successful, your workforce will need to receive full training as the system can be difficult to use due to its size and complexity. Additionally, an ERP will only work if information is freely shared between departments, without resistance. Read more about ERP vs order management systems.

Benefits of Using ERP in Businesses

Company growth brings plenty of new things to manage: information, processes, people, and so much more. Below are some of the top benefits ERPs provide:

Centralised data - All teams use the same information, preventing silos, and duplicate data entry.
Consistency in operations - Maintains uniform operational processes between departments.
Cross-department visibility - Leadership can have an aerial view from cash flow to inventory.
Scalable - Suitable for multi-line or multi-site enterprises.

Common Challenges with ERP

Using an ERP won’t come without challenges. Rewards are significant, but it’s worth knowing the potential downsides before deciding:

Licensing, implementation, and continuing support can add up.
Setting up an ERP is usually a long process that can span several months or longer.
A lot of effort goes into training and change management.

Understanding OMS (Order Management Systems)

OMS tools were built to help you effectively manage orders across multiple sales channels, automate the fulfilment process, and keep your customers in the know from ‘Buy Now’ to ‘Order Delivered’.

Core Functionalities of OMS

Order Management Systems (OMS) are designed to accommodate the specific requirements of today’s e-commerce, retail, and fulfilment organisations. But instead of being a broader business platform, an OMS makes every stage of the order lifecycle more efficient, from the moment a customer clicks “buy” until their parcel arrives and they’ve had a chance to decide if they love it.

Here’s what you can expect from a strong OMS:

Multi-channel order capture - Automatically pulls orders from all sources (e.g. marketplaces, online stores, B2B portals) into one dashboard without manual entry, minimising the risk of missed sales.
Live inventory sync from multiple locations - Automatically update stocks across all sales channels and warehouses so you never oversell, and customers will get to see actual availability.
Automated warehouse picking and packing - Logistics are simplified by creating pick lists, directing staff along cost-efficient routes, and automating the packing process to expedite order dispatch.
Dispatch and courier integration - Integrates with a large number of courier partners so you don’t have to import waybills, contact the courier company, print labels, and more just to get tracking updates.
Returns and refund control - Speed up the returns process with automatic authorisations, store adjustments, and refund workflows for an improved customer experience.

Advantages of Specialised OMS Solutions

Some of the reasons why many sellers opt for a dedicated OMS solution include:

Order fulfilment accuracy - Automated processes and instant inventory updates eliminate errors, meaning your clients receive the right products, exactly when they expect them.
Flexibility - Quickly onboard new sales channels and fulfilment partners or simply change the way things are done as your business grows without worrying about unexpected effects.
Integrated connectivity - Ready-made integrations
to e‐commerce platforms, courier services, and accounting systems allow you to piece together the technology you need.
Designed for scale - Manage order volume (like on Black Friday or during peak season) without slowing down and without mistakes.

Common Challenges with OMS

OMS platforms make great order and fulfilment managers but there are a few aspects to be aware of:

They tend to have a narrow focus - OMS solutions don't handle wider B2B business tasks such as finance, HR, or procurement, so you’ll likely have to invest in other systems for those functions.
Integrations with other third-party tools will always be needed - If you want to access the full picture of your business, you’ll want to integrate your OMS with existing accounting, CRM, or ERP systems. This can come with an extra requirement for time and resources spent on technical work and some ongoing management.

Key Differences Between ERP and OMS

Here’s a clear, side-by-side comparison table that visually summarises the key differences between ERP and OMS, based on the most relevant and up-to-date sources:

Feature	Enterprise Resource Planning	Order Management System
Core focus	Integrates and manages broad business functions (finance, HR, supply chain, inventory, etc.)	Specialises in managing the entire order lifecycle, from order capture to fulfilment and returns
Implementation time	Longer, requiring months or years due to complexity and scope	Shorter, typically spread across weeks to a few months, with a stronger focus on deployment
Scalability	Easy to scale as it supports multi-location, multi-brand, and complex organisations	High for order volume and channels, but less suited for broad business expansion
Industry fit	Manufacturing, wholesale, large/multi-department businesses	E-commerce, retail, 3PL, D2C, businesses with complex fulfilment
Cost	Higher upfront and ongoing costs (licensing, implementation, training)	Lower, subscription-based costs with a potential for faster ROI and fewer resources needed
Customisability	High, but complex and time-consuming, covering multiple business areas	High for order workflows, but narrower in business scope
Integration ease	Can be complex, especially with legacy systems	Designed for plug-and-play with e-commerce, couriers, and other tools
Real-time inventory capabilities	Often batch-updated or delayed, not always real-time	Real-time, multi-location inventory sync and visibility
Order fulfilment features	Basic order management, limited fulfilment automation	Advanced capabilities like multi-channel capture, automated picking/packing, dispatch, returns

When to Choose ERP or OMS

Choosing between an ERP and OMS is a strategic decision which should be made based on your business size, operation complexity, industry needs, and existing resources. Here’s an approach to clarify your choice:

Business Size and Operational Complexity

An ERP is ideal for major companies or those with multi-departmental requirements. If you’re one of these or if your operations reunite finance, HR, procurement, and supply chain, an ERP system brings the holistic integration necessary to handle complexity at scale.

An OMS is a better fit for e-commerce, retail, and fulfilment-driven SMEs that need efficient order processing, stock level synchronisation, and multi-channel fulfilment. Finding and integrating separate fulfilment and order management solutions for a business that services thousands of orders is still challenging. But for businesses where order management is mission-critical, order management systems reunite daily operations, customer focus, and quicker time to market.

Industry-Specific Considerations

Enterprise resource planning solutions are popular in sectors like manufacturing, wholesale, and distribution where deep back-office process integration (including production scheduling, resource planning, and compliance) is fundamental.

Order management systems are critical for verticals like logistics and delivery, e-commerce, retail, and subscription services. In this case, complex networks covering large geographic areas, multiple sales channels, and real-time visibility of the inventory are musts. They’re also particularly good at dynamic order scenarios, split shipments, and fast returns processing—all of which aren’t features of a regular ERP.

Budget and Resource Implications

An ERP can amount to a higher total cost of ownership with considerable licensing costs, implementation services, customisation, training costs, and continued support.

OMS solutions ask for a lower upfront investment, quicker implementation, and less training. This means you’ll get a shorter time to value out of an order management system by taking out the 'middleman' processes between order accuracy and fulfilment. But do note that OMS integration with other systems, like accounting or CRM systems, can require additional resources.

Integrating ERP and OMS

As companies expand, they’ve also started to blend the two systems.

This hybrid OMS/ERP method gives you the best of both worlds: A mix of the all-encompassing back-office management that an ERP provides, along with the specialised, customer-focused order and fulfilment capabilities of an OMS.

Advantages of Integration

Integrating an ERP with OMS systems offers several strong benefits. In particular:

Best-of-both-worlds operations - Get the best out of the ERP for finance, HR, and supply chain, and the OMS for complex order capture, real-time inventory, and fulfilment.
Smoother data flow - The data exchange is semi-automated and dual-directional, avoiding duplicate entries and errors for greater consistency between the tools.
Better decision making - When it comes to decision-making in businesses, accurate, centralised data translates into better business insights, forecasting, and reporting.

Potential Integration Challenges

However, as with all things, there are some challenges associated with integration projects:

Data duplication and inconsistencies - Duplicate or conflicting records can wreak havoc on processes and reporting, if not mapped and validated properly.
System mismatches - Data structures, business logic, or how often updates are made can be varied to the point of making integration difficult and custom for ERP and OMS.
Heightened technical complexity - The connection between two complex systems could demand specialised IT know-how, as well as ongoing maintenance and strong change control.

Strategies for Successful Integration

For the best value and lowest risk in integrating your ERP and OMS systems, know and follow these steps:

Use APIs and out-of-the-box connectors - Ditch the clunky schedule-based integrations and opt for either modern APIs or pre-built connectors to support easy data transfer in real-time between systems, and say goodbye to manual work and human errors.
Choose platforms with native integrations - Pick ERP and OMS platforms that are made to integrate or work well with each other, including ones with a good history of integration in your sector.
Get experienced solution partners on board - Work with consultants or service providers with a strong understanding of ERP and OMS integration to support planning, execution, and issue tracing.

Navigating Order Management Systems

Let’s quickly compare the two against each other:

ERP	Pros	Cons
	Centralises processes across the business, including finance, HR, inventory, purchasing and more, bringing added visibility and data accuracy.	High direct and indirect costs up front and continuing, such as licensing, deployment and training.
	Optimises workflow, streamlines routine processes, and improves productivity and decision-making over the long term.	It can be a long and complicated rollout, and change management and staff training may be needed.
	Minimises data redundancy and silos to ensure data accuracy and real time access from all departments.	It isn’t particularly user-friendly or flexible, especially for smaller businesses or teams that lack support from their IT department.
	Minimises data redundancy and silos to ensure data accuracy and real time access from all departments.	May lack the sophistication or versatility for advanced, multi-channel order management and fulfilment.

OMS	Pros	Cons
	Dedicated attention to order capture, inventory synchronisation, fulfilment, and returns through various sales channels.	Limited business coverage as they come with no finance, HR, or procurement control.
	Facilitates the process of order fulfilment while reducing errors, improving speed, and boosting customer satisfaction.	You may need to tie it into other platforms, like accounting or CRM, to prevent data silos and gain complete visibility into all processes.
	Easier and less costly to set up and manage.	Certain OMS systems may have higher up-front costs or integration requirements, but these are typically lower than those required by an ERP installation.
	Built for flexibility so you can quickly adjust to new sales channels, couriers, or fulfilment partners.	You may need to connect it to other platforms, like accounting or CRM, to prevent data siloes and get the full picture into your data.

Tip: Evaluate your current pain points, growth plans, and resources before deciding on a pick.

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Frequently Asked Questions

Is OMS part of ERP?

Sometimes an OMS can be a module in an ERP system. That’s when it reunites basic order management along with other business features. But a standalone OMS solution offers more specialised order handling capabilities with real-time inventory tracking and fulfilment capabilities.

What is ERP order management?

ERP order management refers to the basic functionality within ERP software that manages order entry, invoicing, and fulfilment, often limited compared to dedicated OMS platforms. Although this might be enough for some businesses, for others, ERP-based order management isn’t as configurable or feature-rich as OMS dedicated solutions (especially if you need advanced fulfilment).

What are the three types of ERP?

ERP systems come in three shapes: on-premise, cloud, and hybrid. On-premise ERPs let a company host the system in-house on its servers. This offers complete control but requires dedicated IT support. Cloud ERPs are hosted online so employees can access them remotely. Hybrid ERPs combine both to maintain some applications on-premises while accessing others in the cloud.