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A few weeks ago Prashant Dube (SAP CRM Product Manager) published a very interesting Order Management Trends regarding a study about order management trends and it’s driving keys.

They identified three benefits that companies expect to derive from their order processes.

  • Achieve operational excellence;
  • Enhance customer experience;
  • Drive revenue growth.

Order Management Trends

Even though they are resumed to this 3 benefits, I would like to go a little bit deeper in each one of them.

First of all I think we cannot speak of any of these benefits in separate. Why ?

Operational excellence

All the customers after a clean SAP installation try to improve and optimize their own processes, starting by the core processes, starting by those where the systems can cause some entropy instead of a clear benefit into the process workflow and people productivity.

And here it comes the first big problem. To identify the core business processes, where the system is taking down the productivity. Why ? Because according to the system users …..all of the implemented processes should be changed. So it’s up to the management and the senior consultants to identify where to improve the processes or to change the normal workflow, reduce process timings, or even to change the core way of working.

To achieve this in the correct way the management must take into consideration the following steps:

  • Visibility and Empowerment – Make sure that the right key figures are shown in a easy and understandable way for all the process responsible;
  • Business response and agility – Nowadays business managers must take the right decisions in less time in order to follow the market and development rules. Having ”open” processes will help the response time when ”adapt” is the keyword;
  • Integration and standards – Often you find the same process made in different plants or different countries and they are made in different ways due to local realities. Management must try as possible to implement process standards cross countries and sometimes cross companies. These is even more critical when we have inside a company many systems – the total integration with the process standards is crucial to achieve operational excellence;
  • Business and Operational alignment with corporate official strategy– To have a clear visibility of the corporate strategy cross company (right KPI etc) is crucial on the performance of operational results.

The second big problem is to build / change the processes (either in the system either in the normal workday functions). This process takes time and financial efforts to the customer. Meaning that, having the right ROI calculation of such change is also critical for the success of this kind of improvements

But all this study and analysis has a reason. To improve productivity and reduce operational costs. And obviously improving productivity has a direct reflect on customer experience.

Enhancement of customer experience

There are two different ways of enhancing customer experience. The first one is a direct result of the above point.

Normally improving operational excellence drives to a natural and effective enhancement of customer experience. How ?

When improving for example a manufacturing process, we will have better deliver timings, or better warehouse management loading timings, better optimization of working times and consequently this will bring us to what our customers want:  Better and more precise timings on deliver schedules and better and more rational prices.

Operational excellence result into faster and more precise timings, better prices and more quality on delivered products, and this lead us (companies) to the second way of enhancing customer experience.

IT and system solutions to improve customer experience. What is this means ? we already have SAP !! what shall we buy this time ?

Today’s consumers demand more than the standard supply-driven service bundles based solely on their service provider’s internal perspectives. They expect their provider to interact with them in real time to offer highly targeted relevant products and promotions, based on a deep understanding of each individual customer taking into account the timing, context and format of each individual transaction.

Implementing tools such as CRM (Customer relationship management) will bring you key figures, customer loyalty program expectations, membership management and multi-channel analysis. There are some very specific solutions and methodologies to implement this.

According to Frost & Sullivan about vertical market of telecommunications, CVE (Customer value enhancement) can be a solution.

Customer Value Enhancement (CVE) is the end point along an evolutionary scale begun nearly 20 years ago with Customer Relationship Management (CRM) and fostered by more recent developments in Customer Experience Management (CEM) as shown in figure below. It is an approach to business that has, as its goal, long-term profitable relationships that are valued by both customer and provider.

 

 

According to Frost & Sullivan the evolution to customer enhancement comes trough the understanding of the historical context: when communications services were fully regulated, one placed an order for service via a business office, and service was turned up at a future date. Similarly, customers interacted with service and billing departments, with each department operating in its own realm. By the 1980s, Telecom operators embraced CRM (Customer Relationship Management) systems to mechanize order taking, and later, multiple processes were added to the scope, including technician scheduling, trouble reporting, billing and collections, to name a few. Still, the motivation was internal cost efficiency, as evidenced by the metrics used to judge CRM success, including error rate decreases and calls handled per hour, leaving the customer identity to little more than a revenue figure.
More recently, CSPs have begun to consider Customer Experience Management (CEM) as the next step beyond CRM. CEM seeks to facilitate better overall understanding of the customer’s perceptions of the end-to-end experience. It does so by gathering data from multiple touch points, including CRM, billing, and marketing systems and correlating that with fulfilment, inventory, network/signalling and service assurance systems to ensure up-to-the-minute status of the complete customer-affecting environment. This is still a bit new, but it holds the promise of making providers better “listeners” to the needs of their customers, and presumably, better suppliers as a result. CRM and CEM both add to the communications service provider environment in a positive way and well-run companies gain measurable market value from these functions. The orientation, however, is largely supply-driven (“Here’s what we have to sell today”) and focused on prevention of loss (“If I have data on how well we do, I can understand your behaviours better and compensate you if we fail.”).

Instead, CVE is oriented toward anticipating customer demand and building a relationship with the customer to satisfy that demand for the long-term.

Well at last but not the least…

Drive revenue growth

What all corporations want in medium-long term is for sure revenue growth.

This is achieved directly by operational excellence, reducing production costs, warehouse management timings and transportation optimization. Optimizing production lines will lead us in mid-term to improve product quality and obviously customer satisfaction.

Improving customer experience will make our customer more loyal and we’ll be able to anticipate our customer needs, delivering faster and better, make better prices and follow the market trends and innovate either on product range, but also on production execution.

Conclusion

This is a very dedicated issue and it’s good to know that a team of SAP experts is always analysing our customers data, experience and best practices. 😉

Congratulations Parshant ! Keep going with the good work….

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