In wholesale manufacturing and distribution, the order-to-cash (O2C, or OTC) process is a vital ingredient for success. B2B and B2C customers not only expect but demand a highly personalized, smooth, consistent, and efficient buying experience at every stage of their journey; failure to deliver this optimal customer experience presents a significant, potentially business-critical gap in your O2C process.
A seamless customer experience is no longer a nice-to-have; in modern business, it’s essential. As part of the State of the Connected Customer report, Salesforce research found that for 89% of buyers, a positive purchasing experience will lead to continued business and that 78% of customers will stick with a company – even after a mistake – provided they receive excellent service.
For an organization faced with even a moderate volume of orders, attempting to reconcile these new customer expectations with legacy, manual processes mean a considerable amount of resources are under-utilized on inefficient processes. This can significantly damage customer relationships, purchasing experiences, and operational effectiveness.
But by streamlining the O2C process flow, you can create seamless and consistent customer experiences, create resilient operations that scale, and cut order-processing costs by reducing errors and automating manual entry. Purpose-built automation software to optimize the order-to-cash cycle has the potential to deliver that streamlined process flow.
In short, order-to-cash (O2C) refers to an organization’s sales process, from the point of sending a quote to receiving payment for an order. O2C encompasses all steps involved in the process, including order management and fulfillment, the order processing system, credit management, and payment collection.
The O2C process also refers to various channels a buyer could use to purchase goods from a seller. For example, some businesses run an eCommerce site in addition to a direct sales force, while other companies use EDI or an online portal.
Every business’ O2C process looks different, depending on its level of technology investment and adoption and its industry. Some industries are subject to more stringent regulatory conditions, for instance. With that said, the order-to-cash process is inextricably linked to the supply of goods and services; in that way, an optimized O2C process is best complemented by a streamlined and visible supply chain management infrastructure.
In wholesale distribution and manufacturing, about 50% of O2C documents are still sent via email regardless of the company’s technology investments. Despite your investments in EDI and a state-of-the-art website, for example, one thing is clear: Customers prefer to shop online but buy manually. And this trend is only increasing.
If you are still using analog processes to manage order intake, you’re setting your business up for failure in several critical ways.
With your human workforce aligned to repetitive, often laborious, and mundane activities (such as manually keying in sales data), job satisfaction and workplace fulfillment decrease sharply. It’s well documented that employees who feel engaged and valued in their work, with a clear understanding of their role in the overall company mission, invariably stay with the company long-term.
On the other hand, employees assigned laborious, time-consuming tasks are far more challenging to retain. With employee retention carrying such significant potential for opportunity or loss, increasing job satisfaction can be a surefire way for an organization to improve revenue and productivity.
Another disadvantage of aligning your employee base to repetitive, analog tasks is that their time and energy become effectively tied up. Faced with large amounts of data, information, and documentation to work through, your staff will not have the capacity to execute customer-centric activities, which are drastically more profitable in a business sense. It will contribute significantly to the operational value of each employee.
It’s also worth noting that, under a manual processing system, order-processing speeds are inextricably linked with and dependent on headcount, making it difficult to scale operations during a sales spike.
The automated order management software could drastically streamline these business processes. Because the software takes control of the repetitive and data-centric processes, the sales team can be realigned to more value-adding activities, such as providing personalized interactions with customers; moreover, they’ll experience a greatly enhanced sense of job satisfaction, which will improve employee retention and productivity levels.
It is an unavoidable business reality that, when presented with mundane and laborious activities to perform, the risk of an employee eventually executing a task erroneously becomes probable or even a near-certainty.
This says less about the skill or abilities of your human workforce and more about human nature in general; however, the operational consequences are the same. Errors in sales order processing must be remediated (once they have been flagged, which is not necessarily guaranteed to happen in good time). Remediation of errors is costly, both in terms of time and revenue, and this has the knock-on effect of increasing order processing costs.
Inaccuracies significantly damage customer satisfaction in orders and processing. These days, irrespective of industry, all buyers expect to be serviced to an excellent standard and to have their order fulfilled correctly and in good time. Errors in order processing are a barrier to an organization’s ability to deliver on those expectations. But when the organization provides reliable and accurate order fulfillment, customer satisfaction rates improve, which paves the way for continued business and an improved lifetime customer value.
However, it should be said that the impact of high error rates is not limited to customer experience and can affect costly inefficiencies across business operations. Inventory management, for example, becomes more challenging to handle with the risk of errors or inaccuracies in the company records.
Lengthy and potentially-incorrect processing puts effective order fulfillment at risk. A high rate of on-time, in-full order delivery is a standard that all businesses must strive to achieve. However, doing so is tremendously difficult without effective and streamlined order processing – something that purpose-built automation software can facilitate. If that automation gap is left unbridged, order processing becomes a lengthy procedure, which can only damage the back-end customer experience.
In other words, time-inefficient processing leaves a high number of invoices outstanding, preventing a company from finalizing orders in a prompt and timely, experience-enhancing fashion. With lower customer satisfaction rates leading directly to an increase in customer churn, the time it takes to process an order is an area all organizations should aim to make a competitive advantage.
Additionally, lengthy order processing hurts payment collection. Laborious manual processes damage the day sales outstanding (DSO) rate, leaving your accounts receivable department waiting for an extended – and costly – the period before payment can be collected.
Improving customer experience is undoubtedly a significant area of opportunity and something businesses can look to capitalize on with streamlined and automated processes. But it is not the only advantage yielded by efficient processing.
An optimized sales process – from purchase and fulfillment to quick and correct invoicing and convenience of payment – creates the conditions for increased revenue and generation of new profit because existing customers are far more likely to return for repeat business, as well as recommend your organization to their contacts.
Khoros reports that for 86% of customers, outstanding service turns one-off buyers into long-term brand champions. Qualtrics XM Institute found that clients who experience ‘good’ service levels are 38% more likely to recommend the business that provided it. This increase in recommendations and improvement in customer loyalty can work in tandem to increase revenue.
Conversely, by taking better control of the O2C process, an organization opens the possibility of making significant cost savings.
An automated processing system can eliminate mistakes and dramatically improve order turnaround time. This allows the organization to decrease operational overheads, which will significantly reduce costs.
A successfully managed and optimized O2C process, coupled with the right technology, helps businesses efficiently deliver value to their customers.
The technology eliminates mundane data-entry tasks, drives costs, creates resource efficiencies, scales with your business, and improves the customer experience. By implementing automation, everything moves faster, with fewer errors.
Getting ideal results from your O2C process requires a fusion of process management, interdepartmental collaboration, and technology. Employing the right solution streamlines the entire process and ensures smooth transitions from one step to another.
Moreover, this frees up resources and personnel to focus on what matters most: meeting the customer where they’re at and delivering on time, regardless of how they order.
The Conexiom Platform for Sales automates the processing of O2C documents, such as purchase orders and special pricing agreements, with sub-2 minute speed and 100% data accuracy.
The Conexiom Platform is purpose-built for automating trade documents, which represent the most critical processes in business operations; closing that automation gap yields significant operational benefits, as seen in a study of our partnership with Genpak. Darlene Bardin, Director of Customer Service, had this to say:
“Our CSR team used to spend 80% of their time on order entry and 20% of their time on customers. Now, it’s 80% on customers and 20% on order entry. And there’s no need to backfill former employees.”
Darlene Bardin, Director of Customer Service
Genpak
Post-implementation, the company gained 75 customer-dedicated CSR hours per week and more effectively managed spikes in demand.
View and download the full Genpak case study here.
Get in touch with Conexiom today to book a free demo and discover how you can transform your company’s sales order process with purpose-engineered automation software.