Sales order automation is a technology that can help companies drive much-needed digital transformation in a post-COVID world.
The efficiency gains created by the automation of business processes are well-known. Bain & Company reports that companies enjoy average cost savings from automation of around 20%. For years, digital transformation projects have aimed to achieve such cost savings.
As distributors and manufacturers aim to rebound strongly from the extreme disruptions of the COVID-19 pandemic, the automation pressures are greater than ever. Modernized business processes are no longer a nice-to-have. They are a key part of ensuring business resiliency – now, amid the aftershocks of this crisis, and ahead of future disruptions.
Automation takes many forms. As executives push to implement DT initiatives with more urgency than ever, where should they begin? The options are numerous, but a good grounding principle is this: start with a low-risk, fast time-to-value process that is tied directly to revenue. Many such processes can be found in the supply chain, and optimizing them should be a key goal of a modern supply chain strategy.
Exhibit A: sales order management.
The Price of Manual Sales Order Processing
Despite tremendous advances in technology, many business owners are still running manual supply chains. In North America, every single year, over $7.5 trillion worth of B2B orders are processed manually. With manual order processing, the conversion of purchase orders into sales orders takes place by hand. Customer service representatives take a purchase order, and manually key it in, doing their best not to make a mistake – the very same way they were doing things in the 1990s.
This is an enormous waste of time, and produces the opposite of a lean supply chain. The outcomes are far from optimal:
- 20-30 minutes of manual entry time per order
- An average cost per order of $9.05
- An average order to cash cycle time of 45 days
- CSRs spend 2 to 3 hours a day re-entering orders with errors
Moreover, with the pandemic forcing companies to adopt Work-From-Home policies, customer service representatives don’t have access to their usual work tools. At a moment when they are swamped with customer orders and queries, they are less equipped than ever to manually process orders.
Many businesses have long known that the sales order management process needs to be improved, if they are to execute an optimal supply chain strategy. Some have tried to rectify the situation through robotic process automation. However, RPA is a hit and miss technology; according to Gartner, over half of RPA implementations fail to deliver a sustainable ROI.
The key to effective sales order management is fully touchless automation.
True Automation is Touchless
Automation is most powerful when it doesn’t require human oversight. The benefits of automation – hours of labor saved, processes being completed faster, and so on – are undercut if human members of staff have to constantly check, validate, or correct errors.
With touchless automation, a company can automatically convert customer purchase orders into sales orders, and directly enters those sales orders into their clients’ ERP systems. Unlike OCR, the text is lifted directly out of the document as raw data with 100% accuracy, removing the need for anyone to perform a review.
With a sales order automation solution, more than 80% of orders can be processed in a “touchless” fashion. Purchase orders are turned into error-free sales orders without requiring any human touch (intervention or oversight).
This touchless tier of automation massively increases an organization’s capacity to process their customer orders, while shortening fulfilment time. Enterprises can move from order emailed to shipment in under 15 minutes. Cost per order falls to under a dollar per order. And FTEs who were previously spending hours of their day manually keying in orders can be freed up to focus on real customer service and selling.
The Future is Automated
Executed correctly, automation nearly always delivers efficiency gains. However, automating order processing offers particularly impressive gains. Because there are typically whole teams of customer service representatives manually processing orders, order automation can deliver cost savings of as much as 80%.
Looking to the near future, Sandy Shen, Senior Director Analyst at Gartner, said it best:
“This is a wake-up call for organizations that have placed too much focus on daily operational needs at the expense of investing in digital business and long-term resilience. Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly now, and over the long term.”
In a variety of areas, automation is the key to long-term resilience. Sales order management is one of those areas – which is why sales order automation has been implemented by leading distributors and manufacturers such Grainger, Genpak, Diversey, Prysmian and Compugen.
To emerge strongly from a turbulent 2020 requires establishing modernized processes tied directly to measurable business value. These processes are what will drive a lean supply chain, and are the key to executing forms of digital transformation that will establish both future and present resiliency.
 Hackett Group internal Conexiom report, Hackett World-Class Overview.