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The Order Management Cycle in 2006

The technology to support order hubs will emerge, say R Wang, John Ragsdale and Ian Schuler of Forrester Research in their analysis of order management cycle trends for 2006-07


R Wang

For most enterprises and their vendors, Order Management Cycle (OMC) functionality resides in the ERP, CRM and SCM functional domains. However, the requirements of the OMC focus on order processes. Business process frameworks and related business process repositories transcend functional silos and will enable enterprises to address order management challenges across all stakeholders in a hub-like manner.

Enterprises Seek Technologies To Support A Process-Focussed World

Leading organisations adapt and modify business processes in response to market conditions. However, most of them manually adjust these processes, so they now seek an automated systems approach to creating re-usable processes

Today, key business drivers are shaping the future of the OMC. These include the following:

  • Emphasis on processes. As process trumps functional views of business, enterprises are redefining their operational and strategic plans around key business processes including the OMC. Leading organisations adapt and modify these business processes in response to market conditions. However, most organisations manually adjust these processes and seek an automated systems approach to creating re-usable processes.
  • Increasing importance of service orders. Lower profit-product sales continue to take a back seat to higher-margin service orders. Expect enterprises to continue to grow warranty, installation and support revenues. As a result, service order requirements like project accounting, dispatch availability and asset scheduling will increase in importance.
  • Requirements for multiple party access. The number of access points to order systems increases as processes encompass all stakeholders. Customers, employees, suppliers, partners and distributors expect to place orders, access order status, and review account balances. More importantly, these stakeholders expect to have the ability to change order attributes at various points throughout the order process.
  • Maturation of middleware platforms. As four dominant middleware platforms emerge, important components in the OMC are standardised. Functionality such as process repositories, workflow, business intelligence, alerts, events, notifications, role-based security, portals, auditing and interaction histories will increasingly be provided by IBM’s WebSphere, Microsoft’s .NET, Oracle’s Fusion Middleware, and SAP’s NetWeaver. Meanwhile, BEA’s WebLogic plays a role for some vendors, though that influence is waning. In any case, increasing commoditisation of middleware enables vendors to focus on process expertise as opposed to infrastructure around SOA and Web services.
Executive Summary
Focus on business processes, requirements for multiple stakeholder access, and maturation of middleware platforms in the order management cycle drives enterprises towards the concept of an order hub. Vendors will be challenged to deliver functional components of the order hub that include visual business process management (BPM) tools, business process repositories, order line independence, and robust order routing and tracking. In 2006, enterprises expect vendors to improve process administration, support bundled product and service orders, increase granularity in order status, and transcend basic reverse logistics. By the end of 2006, leading vendors will deliver on many components of a complete order hub, though only a few will be able to claim order hub status while master data and visual BPM tools become a critical component.

What it means

Order hubs emerge to manage the Order Management Cycle

As process proliferation increases around the order management cycle, standards for core and reusable processes will emerge. Together with advances in BPM tools and Web services repositories, organisations are seeking centralised management of these order processes. Growing acceptance of data hubs—such as customer, product, and supplier—is leading to this new notion of process hubs. The pairing of master data with reusable order processes will complete the OMC equation resulting in the prominence of the order hub.

Trends To Watch For In 2006

We anticipate the following vendor trends to continue in the OMC market during 2006-07.

  • Improvement of BPM tools. Leading OMC vendors will deliver tools to create, model, test and modify business processes. Improved BPM tools on top of business process repositories will enable enterprises to administer and maintain critical intellectual property without expensive customisation. More importantly, leading vendors who deliver visual BPM tools will enable operational managers to modify OMC flows without direct IT support.
  • Unification of products and service orders on one system through availability-to-deliver (ATD) capabilities. OMC vendors traditionally have either had strong sales order management or strong service delivery/project capabilities, depending on heritage. But because the morphing of service and product orders is resulting in service installations and support orders, leading vendors have developed or will develop OMC engines that are in sync with forecasting and demand planning systems.
  • The result. ATD capabilities that allow for the order and installation to occur on one order, the ability to access one OMC system, and the ability to route through a complex maze of customer channels and supply chains.
  • Emergence of order line independence as a de facto industry standard. Strong order engines will allow users to take most actions at an order line level. Enterprises will expect their vendors to provide changes at the order line level for substitutions, change in ‘ship-to’ and ‘bill-to’ fields, holds, partial completion, and other line-level independence capabilities. To meet this level of complexity, expect many vendors to re-engineer their existing order engines.
  • Improved insight in order status driven by order tracking granularity. Because of customers’ and trading partners’ increasing number of inquiries on order status, self-service options, and automated status, tracking requirements are increasing in importance. Further, integration with customer care processes and demand planning systems require a deeper level of status granularity. Leading vendors who deliver detailed status information will then couple this with deeper analytical and business activity monitoring tools.
  • Reverse logistics move beyond basic returns. Traditional returns covered the return merchandise authorisation to customer credit processes. Thus, enterprises are seeking complete reverse logistics including inventory replenishment, supplier credit, and quality of service information. In addition, leading vendors will have to support capabilities across multiple channels, including in-person, call centre, and Web. Ultimately, enterprises expect vendors to update related demand planning and forecasting systems.

For more information contact Sudin Apte, Forrester India Country Manager, at sapte@forrester.com, or phone 020 2567 4390/91

 
     
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