Expert advice: Where are the greatest problem areas in order management?

Rod Johnson, vice president and general manager, customer management practice, AMR Research tackles the question: Where are the greatest problem areas in order management?

This is a common problem. Order management – the range of activities that govern the capture of accurately specified, deliverable orders and dictate how enquiries or problems are handled – is supported by a large range of processes and is often endangered by fragmented order handling systems. AMR Research, for example, has identified 33 distinct business processes that play a significant part in order management, from product selection and credit checking to bill presentment and complaints handling.

So where are the greatest problem areas in order management? We recently reviewed user adoption of order management technologies in Europe, and found the following:

  • Poor visibility of entitlements agreed within long-term contracts (LTCs) offers a major area of potential improvement in business-to-business (B2B) trading;
  • Europe has the greatest scope for improvement in self-service management of reservations, automated production of quotations and proposals, auctions, reverse auctions, product substitution, returns, warranties, and loyalty schemes;
  • European businesses are running unnecessary risks with self-service systems that rarely apply common business rules across all customer channels;
  • Proactive customer order visibility and notification is limited in Europe, thus stifling the ability of companies to improve customer service levels;
  • Poor integration with manufacturing and product sourcing knowledge in advance of order capture continues to cause missed sales opportunities and shipment mistakes.

However, our research found a large range of benefits in deploying order management technology. First, many respondents report improvements to customer service, and in particular, reduced fulfillment timescales, improved performance against fulfillment promises, and faster response to customer enquiries. Second, many companies are able to introduce new customer services, such as 24×7 online, self-service operations. Third, those surveyed report improvements in order handling, leading to greater order specification accuracy (such as correct products, valid configurations, and correct pricing), reduction in enquiries to customer services, and more enquiries being resolved in the first conversation.

Finally, our respondents tell us that they are able to: integrate new sales and service channels without sacrificing uniformity in the standard of customer service; better handle global customer management; more efficiently aggregate purchase orders and distribution options and consolidate outbound shipments; and analyse customer behaviour across all communications channels, brands, organisational units and regions.

Our conclusion: European companies are needlessly accepting internal inefficiencies. The technology is there to support effective order management, but users should begin by reviewing the order management strengths of their current software providers.

Vendors with enterprise resource planning or supply chain backgrounds, such as Baan, i2 Technologies, IBS [International Business Systems], IFS [Industrial &Financial Systems], Intentia, Manugistics, Oracle, PeopleSoft, QAD, SAP and Yantra are particularly well placed to connect front-office order management processes to back-office information, such as product availability, pricing and order status, especially when it is held within their own systems. Such vendors often offer tools to unify the back ends and deliver common services like pricing and entitlement checking across orders from all communication channels.

A sell-side ecommerce background generally gives a vendor strength and focus on the web communication channel. Such vendors include ATG [Art Technology Group], Blue Martini, Comergent, HAHT and Ironside.

Connection to back-office systems will require integration [when using such software], and is also needed when driving order management through customer relationship management systems such as those from Amdocs and Siebel. Although the call centres from such vendors often handle order status enquiries, in practice, they are less involved in order capture.

Other vendors with strengths in particular order management niches include : Descartes for pricing, freight calculation, LTCs, billing, and more, with a special focus on transportation and logistics companies; Firepond and Selectica in configuration; the Sant Corporation for proposal generation; StreamServe for transmission of documents such as invoices using standard electronic formats; Enshield and Experian for credit checking.

In the light of our research, AMR Research recommends that users beware of confusion when talking to vendors that may themselves use a variety of order management definitions. Be clear about what you seek and describe it internally as well as to vendors without recourse to ambiguous terms. Users should also help customers find the right products through guided selling techniques and product configurators. This will also help to reduce order error rates.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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