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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
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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
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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.
| 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. |
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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.
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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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