The great unraveling: ERP vs Order Management Systems

Enterprise businesses live and die by their ability to operate efficiently, adapt quickly and deliver exceptional customer experiences. At the heart of those efforts lies the technology stack - especially when it comes to managing business operations and order fulfillment. 

Two tools often caught in the same conversation but built for different purposes are Enterprise Resource Planning (ERP) systems and Order Management Systems (OMS). Understanding where they overlap, where they diverge and when to use each is critical to scaling your operations without friction. 

Not sure whether to stick with your ERP or invest in a dedicated OMS? 

This guide breaks down the key differences, use cases and decision criteria to help you choose the right path. 

ERP vs. OMS: What they are and why it matters 

What is an ERP?  

An Enterprise Resource Planning (ERP) system is essentially the backbone of business operations. It integrates a company’s various functions, such as finance, procurement, inventory accounting and manufacturing, into a single source of truth.  

ERPs were originally designed to manage production planning and raw material inventory but have since evolved into comprehensive platforms for overseeing operational workflows. 

 
Key ERP capabilities: 

• Comprehensive business management: 

ERPs allow businesses to publish inventory data and manage financial accounting, procurement and integrated reporting. However, real-time inventory optimization is not their core strength.  

• Manufacturing operations: 

Designed to orchestrate the plan, make and build processes, ERPs track raw materials through bills of materials (BOMs) and convert them into finished goods.  

• Financial management: 

ERP systems unify financial data across departments, making them ideal for companies managing complex financial transactions.  

• Cross-functional coordination: 

With one source of truth, ERPs excel in resource allocation, procurement and interdepartmental collaboration.  

What is an OMS?  

An Order Management System (OMS), on the other hand, is narrowly focused on the order lifecycle.  

Order Management is designed to manage multi-channel inventory, streamline order orchestration and improve customer satisfaction through real-time data and omnichannel fulfillment capabilities.  

Key OMS capabilities: 

• Multi-channel inventory segmentation: 

Provides real-time visibility across warehouses and distribution channels, ensuring accurate availability and tracking.  

• Order orchestration: 

Facilitates advanced routing based on variables like cost efficiency, delivery time and customer location, optimizing order fulfillment across multiple sources.  

• Customer experience enhancement: 

Connects sales channels to the backend and provides capabilities like Buy Online Pickup in Store (BOPIS), curbside delivery and real-time availability promises.  

• Store operations: 

Empowers retail associates with tools to manage omnichannel workflows, turn brick-and-mortar locations into mini fulfillment hubs and enhance the shopping experience.  

ERP vs OMS: A side-by-side comparison

Though ERPs and OMS systems can overlap in their functionality, their scopes diverge significantly. Here's an at-a-glance comparison of how they measure up in different areas of business operation:

When does ERP alone work?

For small or early-stage businesses with simple workflows, an ERP’s bundled order management module may suffice. You’ll benefit from:

• Lower initial costs with bundled features
• Fewer integrations and system vendors to manage
• A centralized view of financials and basic inventory

But as complexity increases with more channels, more fulfillment nodes, more customer expectations, the cracks begin to show.

Challenges of using ERP for order management

1. Costly customization

ERPs require extensive (and expensive) customization to support complex order workflows. Data from Deloitte Research shows that custom projects to implement order management functions cost anywhere from $250k - $3M depending on complexity.

2. Lack of real-time visibility

Most ERPs don’t update inventory in real time, leading to overselling, mismanaged stock levels and frustrated customers.

3. Limited scalability and flexibility

Advanced workflows like curbside pick-ups, multi-warehouse routing or seamless returns usually require dedicated logic not native to ERPs.

4. Poor customer experience

Modern customer expectations demand personalized experiences, from real-time delivery promises to payment flexibility. These advanced capabilities often fall short in ERP configurations.

When to invest in an OMS

For fast-growing, high-volume or omnichannel businesses, a dedicated OMS delivers significant ROI through smarter fulfillment, better customer experience and increased scalability.

OMS use cases that deliver:

1. Dynamic order routing

Imagine managing stock levels and route optimization across multiple warehouses. An OMS Adjusts fulfillment in real time based on stock levels, demand and delivery windows.

2. Enhanced customer experience

With features like BOPIS, ship-from-store, delayed payments and real-time stock promises, an OMS makes it easier to attract and retain customers.

3. Faster and smarter fulfillment

Order orchestration powered by AI minimizes errors, meets aggressive delivery timelines and reduces the cost of fulfillment by optimizing warehouse utilization.

4. Seamless scalability

OMS platforms are modular and cloud-native, allowing businesses to scale without overhauling their systems. Modules from an OMS that allows scalability cost far less than ERP customization or ripping and replacing a new OMS

5. Integrated insights

Advanced analytics allow businesses to draw actionable insights into customer behavior, inventory patterns and channel performance. 

Forrester Research notes that modular OMS tools scale faster and more cost-effectively than ERP-based alternatives.  

ERP + OMS: better together

The good news is you don’t have to choose only ERP or OMS. The two systems complement each other when seamlessly integrated.

• ERPs continue to act as the backbone for financial, HR and inventory tracking
• OMS systems handle specialized, real-time workflows for order fulfillment and customer-facing operations. 

By leveraging ERP and OMS together, businesses can achieve:

• Unified data flow for reduced silos.
• Faster time to deliver with optimized orchestration and fulfillment.
• Improved revenue orchestration through better customer retention and reduced fulfillment errors.

How to Choose: ERP, OMS or both?

Here are some guiding questions to determine which system (or combination of both) is right for your business:

1. How complex is your order lifecycle?

If your operations span multiple warehouses, sales channels or fulfillment methods, OMS is a better fit.

2. Do you need real-time visibility?

For dynamic routing and stock accuracy, OMS is essential.

3. Are you planning to scale?

If scaling globally or omnichannel workflows are part of your strategy, start with a foundation that supports modular growth.

4. Is customer experience a competitive advantage for you? 

For brands where loyalty depends on seamless post-purchase experiences, OMS offers advanced tools to meet customer expectations better than ERP systems. 

Ready to modernize your fulfillment?

Adopting new systems may seem daunting, but laying the right foundation can make all the difference. By adopting both ERP and OMS, businesses can streamline operations while delivering exceptional end-to-end experiences.  

If you're ready to transform your fulfillment strategy, start by exploring your business needs with a free OMS assessment.

Your ERP isn’t broken. It’s just not built for everything. 
Pair it with an OMS and you’ll finally get the speed, scalability and satisfaction your customers are looking for.