using arrows to make stars of your customer facing teams

Is it really possible to deliver superior customer service and transactional excellence at the same time?

OmPrompt Executive Briefing

Using arrows to make stars of your customer facing teams.

Summary 2

Introduction 3

The stars and arrows metaphor 5

Aligning stars and arrows 6

The rise of customer automation management 7

Customer automation management and 8 order-to-cash processes

Customer automation management, EDI 9 and business-ready networks

ContentsPolishing stars and mending broken arrows with customer automation managementIn today’s economic climate, organisa-tions face three choices when seeking to balance superior customer service with transactional excellence:

1. Stick with the status quo, and suffer increasing pressures on customer satisfaction and operational cost effectiveness.

2. Attempt to improve efficiency by imposing standards on customers – and running the real risk of alienating them.

3. Do what a growing number of today’s leading order-to-cash operations have chosen to do, and implement customer automation management.

Adopting customer automation management enables organisations to consistently deliver a superior customer service level by ‘polishing up their star resources’ whilst at the same time driving operational efficiency by mending the ‘broken arrows’ in their processes.

Summary

2. OmPrompt. Using arrows to make stars of your customer facing team.

Many organisations have already achieved dramatic efficiency improve-ments in their procure-to-pay cycles by driving their suppliers to adopt standardised processes and technol-ogy solutions such as eInvoicing. At first glance, we may think that the same gains can be achieved by implementing a similarly standardised approach to the processes within the order-to-cash cycle.

But here’s the challenge: the standard-ised, simplifying mind-set that has worked so effectively in increasing procure-to-pay efficiencies will struggle to cope with the diverse range of customer message formats and business processes that are inevitable in any complex business environment.

In fact, insisting on a rigid, stan-dardised approach to processing orders runs a real risk of alienating the customers your sales force has worked so hard to acquire. In most competitive

Introduction


business environments, suppliers have to find ways of accommodating the many diverse ways with which their customers choose to place orders.

This is why, in most markets, EDI has only succeeded in automating part of the order processing workload – the generally accepted figures lie somewhere between 30–70%. The remaining orders are received in a variety of formats that typically involve some form of manual intervention at one or more stages in the order-to-cash cycle.

This diversity is not just restricted to order formats: increasingly, customers have specific requirements and expectations in other areas. They may, for example, want consignment stock, vendor-managed inventory or call-off orders managed and reported on in a certain way. Or they may expect any returns to be managed according to their own defined process.

Accommodating these customer- specific process requirements can become a condition of doing business with their organisation – and assuming that we do not wish to turn their business away, we need to find ways of dealing with the customer’s expecta-tions. All-too-often, this creates yet another set of customer-specific workarounds.

Trying to impose standards on their operational diversity can easily alienate your hard-won customers.

Customer contact resources that should be focused on delivering a superior customer experience are being repeatedly redirected to bridging the gaps in back office processes.

In practice, this means that front-office resources that should be focused on delivering a superior customer experi-ence are being repeatedly redirected to bridging the gaps in back office processes. And in a world where every vendor is striving to improve efficiency and release resources to work on higher value revenue generating tasks, the cost and consequences of this patchwork approach are increasingly unsustainable.

Will diversity disappear?There are some who hold the view that a rising tide of industry standards will eventually start to do away with this diversity, and that all they need to do is to wait for this to happen. But – despite the rise of EDI and industry-specific business-ready networks – there remain, and are likely to remain, a large number of exceptions that have to be dealt with. It’s interesting to note that most of the people advocating a ‘wait for the standards to catch up’ approach are typically not those that have to deal with the problem on a day-to-day basis.

That’s not to say that EDI and business-ready networks haven’t got a role to play – just that they are unlikely to deliver anything like a complete solution either now or in the future. Both approaches tend to struggle when required to scale out beyond a core of committed, relatively high volume users because of the challenges associated with getting anywhere close to 100% connectivity across the order-to-cash process. We’ll return to this topic later, but the obvious conclu-sion is that diversity isn’t going to disappear in the foreseeable future, and attempting to impose standards on customers is never going to offer a complete answer.

Walking on eggshellsUnless organisations choose to turn business away, there’s no getting away from the need to manage the diversity of customer behaviours and expectations. But is relying on these repetitive manual interventions really the only option to filling the gaps in the order-to-cash cycle?

Many suppliers have told us that they feel as if they are ‘walking on eggshells’ – and that’s not just because of their desire to accommodate their custom-ers’ expectations. They are also increasingly nervous about having to rely on ‘special processes’ that are held in the heads of a handful of customer service representatives that are familiar with each customer’s special requirements.

What happens if these experts go on holiday, go sick, or leave and have to be replaced? Often, their colleagues have to go through a fast and steep learning curve to understand the poorly documented customer-specific business processes – putting quality of customer experience at risk meanwhile.

This undocumented ‘local knowledge’ can also prove a significant constraint in the drive towards shared service centres, whether they are insourced or outsourced. It’s perhaps no wonder that many companies have recognised the need to clearly separate the customer experience process from the operational excellence process, whilst recognising the interdependence of the two functions.


This reliance on manual interventions can be both expensive and time-con-suming. Perhaps worse, many of these manual interventions (often the majority) are not one-off responses to a unique customer situation, but a process that has to be repeatedly applied to every order of the same type.

Gaps start to appear whenever these process exceptions have not been systemised and automated. Where technology cannot cope, local manual workarounds are created. These interventions are often creative and ingenious, but they have a habit of proliferating and are often invisible to senior management.

Although they appear to fix the problem – at least for the moment – they are not without risk. They increase the potential for error, create backlogs, make it hard to achieve processing time targets, divert cus-tomer service staff from their primary responsibilities, and leave the organ-isation vulnerable when key personnel are sick, on vacation, or decide to leave.

Critical risks to key business processes are not just restricted to day-to-day operations. Unless the underlying issues are identified and systematically addressed, it becomes challenging at best and often impossible to success-fully restructure and consolidate customer-facing operations to improve efficiency, flexibility and service levels.

Customer diversity isn’t going to disappear. EDI and business-ready networks are unlikely to deliver anything like a complete solution either now or in the future.

This is where the idea of stars and arrows is such a useful metaphor. Stars represent the opportunities for delivering a superior individual customer experience, whilst arrows represent the underlying processes that support the critical combination of on-going superior customer service and transactional excellence without having to trade-off between the two.

Of course, the last thing you want is for your valuable front-office star resources to be used to fill gaps caused by broken back-office arrows – yet that’s exactly what ends up happening on a regular basis in far too many organisations. Perhaps more seriously, the scale of the intervention is often invisible to senior managers.

Studies have suggested that as much as 65% of an organisation’s front-office resources – the people that should be focused on delivering star quality customer service – are instead reduced to filling the gaps in back office processes.

The stars and arrows metaphor

The foundations of superior customer experience (stars)So – what’s involved in delivering superior customer service? What should our ‘star’ resources be focused on?

The obvious answer is that they should be dedicated to creating genuine value – for both the customer and their employer. This may involve stepping in and getting involved whenever exceptional one-off situations arise – for example when a clarification is required before an order can be placed. It may involve up-selling or cross-selling. Or it may mean resolving a query in a way that both solves the immediate issue and opens the scope to do incremental business, now or in the future.

You want your smartest customer- facing people focused on delivering superior customer service – rather than distracted by having to fill gaps caused by process issues. And front line employees find it very frustrating having to keep filling gaps when a recurring problem that could be solved permanently through better adher-ence to transactional excellence is not addressed.

The foundations of transactional excellence (arrows)Filling gaps and eliminating recurring process issues is, of course where transactional excellence has such an important role to play. The foundations of transactional excellence involve eliminating all those avoidable manual interventions and progres-sively engineering-out all those potential points of failure where customer service could be compromised.

It means avoiding any unnecessary re-keying that could increase error rate. It involves capturing all the information that is required to success-fully and smoothly process transactions in the order-to-cash cycle from the moment the order enters the system.

It requires organisations to offer a single, consistent and easily accessible version of the truth to every function that touches customer transactions from the start to the end of the order-to-cash cycle. And, of course, it involves connecting sales, customer service, the warehouse, logistics, finance and accounts receivable departments.

In theory

A seamless process

Order Fulfilment Cash

Back office Customer contact


Superior customer experience can be achieved through value-added interactions between your customer contact staff and your customers together with transactional excellence in your back-office.


A chaotic process

What actually happens


One of the common barriers to achiev-ing both superior customer service and transactional excellence is the blurring of the two functions, to the point where it’s hard to clearly separate the differ-ent roles, priorities and metrics. So one of the first things to do when seeking to better align stars and arrows is to clearly differentiate between the two, defining and documenting the stan-dards to which the respective functions will be held.

This exercise will often flush out the undocumented workarounds that have been sustaining the order-to-cash functions. Some of these workarounds will be responses to truly unique or hard-to-predict customer situations – in which case they need to be made the clear responsibility of the customer service team. But the vast majority of the workarounds will actually be dealing with repeatable and predict-able customer situations – gap filling. Some may be specific to an individual customer. Others may be applied across a range of different customers. But most of them will lend themselves to a systems solution. Identifying, documenting and dealing with these avoidable manual interventions isn’t just good practice – it’s the necessary foundation for delivering sustainably high levels of customer service in the most cost effective manner.

For many organisations, the stars and arrows process may involve the creation of shared services centres.

Aligning stars and arrows

For others, it may involve outsourcing processes to an expert services provider. But in all cases, if you haven’t fully understood your underlying processes the move to a new structure can create more problems than it solves.

Process precedes technologyJust as with any other business func-tion, it’s hard to successfully automate (or outsource) any process that isn’t fully understood.

We’ve worked with a growing number of organisations to support them on their path to combining superior customer service with transactional excellence, and our advice is always the same: make sure you understand the realities of your current processes – in particular all the institutionalised workarounds – before you apply any changes.

We know what to look for. Our discov-ery process can often help reveal undocumented workarounds that had been invisible to senior management. Interview your customer service staff. Observe their behaviours. Ask them to describe and document the work-arounds they find themselves implementing on a regular basis and why they feel they are necessary. Try and dig in to uncover the real underly-ing causes – and ask them for their ideas on how the workarounds could be eliminated. Look at how other similar organisations deal with these

issues. And it’s not just the customer service team. The order-to-cash process involves other teams from supply chain, logistics and accounts receiv-able – that are frequently engaged in workarounds to keep the orders moving and the payments flowing sometimes due to undocumented workarounds early in the process.

Many organisations have derived great benefit from applying lean thinking to processes, and we have helped many clients map and model what good manual processes should look like before investing in a customer automation management solution.

Profile the processes into stars and arrows. Within the arrows, rank the opportunities to improve transactional excellence, prioritising the ones that offer the greatest payback – as mea-sured by a combination of value added to the customer, cost and complexity eliminated from your operations. You’ll also want to focus on processes that can help your ‘star’ resources deliver a superior and sustained customer service level.

With solid processes now in place a platform for effective automation is provided- but as you’ve probably already identified, traditional, stan-dards-based technologies lack the flexibility and adaptability to enable automation of the diversity of customer behaviours and expectations that you will have documented.


When IT systems are unable to cope with customer diversity, customer contact staff are pulled away from value-added interactions with customers to perform repetitive and automatable tasks in the back office.

The need for a more adaptable approach to automation has led to the rise of customer automation management. Unlike traditional, imposition-of-standards -based automation, customer automation management solutions are designed from the ground up to support the technological challenge of an inher-ently diverse customer environment.

Unlike EDI and other related technologies, customer automation management does not rely on the customer investing in technology, or adopting processes that are alien to their natural behaviours.

Instead, this new generation of solu-tions are designed to adapt to diverse customer behaviours. This requires four key building blocks:

n First, these solutions must be capable of accommodating a wide range of data formats without the need for any changes on the customer side, or the need for repetitive manual intervention on the supplier side. We refer to this block as adaptive multi-format sup-port. Whatever form or format the order comes in – fax, email, EDI, and so on – the system must be capable of transforming the data where necessary and process it.

The rise of customer automation management

n Next, customer automation manage-ment solutions must be capable of capturing and implementing business rules that are sometimes complex and often unique to a specific customer situation – and it should be possible to add to or amend these rules without the need for any IT-related interventions or delays. We refer to this block as intel-ligent business rules. For example, if customer orders are tax exempt, or if special handling or shipping is required, the system must be capable of automatically recognising this and taking the appropriate action.

n Third, these solutions must be able to validate the customer master data stored in the ERP system against order, claim, or POD data. We refer to this block as customer master data valida-tion. For example, when an order is received which references an obsolete or out of date product name or part number customer automation man-agement will replace it with the correct name or number.

n Finally, customer automation man-agement solutions must be able to recognise one-off-exceptions to normal business situations and escalate them for priority attention in a manage-by-exception environment. We refer to this block as accelerated exception management. Whenever a unique or time-critical situation that cannot be automated arises, the system must be


A seamless processalongside your existing corporate system

With customer automation management



Customer automation management solutions eliminate the need for manual workarounds allowing customer contact staff to refocus on generating real value.

able to recognise this and provide alerts so that issues can be addressed before they escalate into crisis.

These requirements lend themselves to an on-demand, software-as-a service approach that can be implemented quickly, requires no significant IT involvement, and can be scaled up or down to cope with changes in demand.

Customer automation management and salesIn many ways, the story of customer automation management parallels that of customer relationship manage-ment (CRM). Before the near-universal adoption of CRM technology, sales people carried information in their heads or on local PC systems, making information invisible or inaccessible to the company at large.

Just as CRM has captured key sales stages and brought consistency to the sales process without preventing sales staff to take the initiative and respond to customer needs, customer automa-tion management offers organisations the opportunity to optimize the cus-tomer experience that follows from new customer wins.

Customerprocesses

Pre-orderautomation

Orderautomation

Order

Fulfilmentautomation

Deliveryautomation

Invoice automation

Paymentautomation

Disputeautomation

Customer careautomation

Fulfilment Cash

Order processingFor those responsible for order expectation, evaluation, input and post-processes, customer automation management acts as the lever and the liberator.

Processes ready for customer automa-tion management include forecasting and VMI harmonisation, order valida-tion and input, historical evidencing, and authorisation from 3rd parties – say border control and treasuries. Due to their repetitive nature, the initial checks regarding fulfilment processes can also be in the remit of customer services and can benefit from the assistance of automation.

The processes that within a business can be liberated will depend on variables such as the product and market addressed. But although one solution does not work for all, the principal of addressing scenarios of process repetition within diverse environments does hold. For example where a variety of content is present within what is supposed to be the same category of information, say forecast data for global organisations where differences among countries are compounded by cultural differences.

In short, order processing is not the complex, indescribable mystery it’s made out to be. It just needs unpicking, which is achievable by identifying and extracting the repetitive systemisable components.

Customer automation management and order-to-cash processes

FulfilmentTaking goods to market is rife with disjointed operations, patched up by manual intervention. This is often the product of a lack of integration due to cost of system, complexity of process, or availability of data.

To define cost in this context, the value returned by linking the process or system may not be sufficiently high to outweigh the cost. This suggests that if it were cheaper then it may be viable. For example, low to medium value customers may not be attractive enough to be included in a project.

For the barrier of complexity, it may be too hard a process to unwind, too high a skill set required to implement a solution, or the system may offer too much data to manage. Vehicle tracking systems often offer unwieldy sets of data, and no data set is the same across vendors which may be an issue where multiple carriers are used.

Regarding a lack of data availability or limitations within the technology that creates it, it may be that the information is not gathered or not passed on, for example goods’ time of arrival, clean or unclean delivery. In cases such as these, simply having a more complete picture of what’s happening with deliveries would help achieve better KPI results.

CashCash related processes are high priority and automating interactions with suppliers has been reaping significant value in recent years. However, processes on the customer side are increasingly receiving attention as they too offer significant savings opportunities.

What was planned (order) and what really happened (delivery) may create a mismatch between order value and payment received. Management by exception, for example the automated identification of deliveries that fail KPIs, can help staff proactively focus on orders that are destined not to reconcile first time, allowing fewer errors to be made when generating invoices.

Additionally, having the data is one thing but persistently chasing others for it is a drain on resources. Where IT teams are ill-equipped to address customer diversity, customer automa-tion management can help. For example, by making manual orders available to cash collection teams, invoice query times can be shortened substantially.

Automatically reconciling payments with remittance advice notes liberates staff to perform higher value tasks. This and any other matching activity between streams of data that comes from a variety of sources could be in scope, from logging complaints to generating invoices in customer-specific formats.


Figure shows repeatable processes in the order-to-cash cycle that can be liberated through customer automation management.

As we observed earlier, EDI and business-ready networks have had – and will continue to have – an important role to play, but they cannot by themselves deliver a complete solution to the challenge of managing customer diversity and filling the resulting gaps in order-to-cash processes.

Customer automation management can provide a perfect complement to an established EDI solution or business-ready network, enabling organisations to significantly increase the extent to which they deliver transactional excellence. Customer automation management complements, rather than competes with these traditional approaches.

In fact, for as long as your existing EDI or business-ready networks make commercial sense, you can simply use customer automation management to fill in the gaps and eliminate the unnecessary manual workarounds that are associated with almost every such implementation.

Customer automation management, EDI, and business-ready networks

That, of course assumes that your EDI or business-ready networks remain cost effective. Some organisations are finding that their EDI costs, in particular, are rising rather than falling, in part driven by the move to a 7-day business week and day one for day two order-ing, with all that implies for software, staffing and support costs.

If this is happening to your organisa-tion, there’s no reason to think that you’re inevitably locked into an increasingly expensive and unwieldy traditional EDI solution. Notwithstanding its ability to comfort-ably co-exist with existing systems, some organisations are now seeing the potential for customer automation management as a catalyst for change.

Customer automation management is a realistic option for completely outsourcing order- to-cash transac-tional processes, concentrating instead on the things that really add unique value to the relationship with customers.

Customer automation management provides a perfect complement to an established EDI solution or business-ready network, enabling organisations to significantly increase the extent to which they deliver transactional excellence.

Continuous learning and improvement

✓

1. Identify areas of repetitive human intervention

2. Qualify opportunity for automation

3. Automate to reduceerror and improve efficiency

4.Release staff to focus on superior customer service


Customer automation management is a continuous process that ensures that an organisantion’s value-added processes are properly resourced by automating repetitive and repeatable human workarounds.

About OmPromptOmPrompt is the leader in customer automation management. OmPrompt helps large companies with complex supply chains bridge gaps by eliminating the need for human workarounds when transac-tional systems can’t cope with diverse operational requirements from customers.

OmPrompt’s award-winning platform enables companies across a wide range of industries – including FMCG, healthcare, and logistics – to gain competitive edge through superior customer service provided by resource freed from back-office functions.

OmPrompt’s managed service offers multi-format support, intelligent business rules, master data validation and accelerated exception manage-ment to deliver the transactional excellence enjoyed by global brands worldwide. OmPrompt processes transactions in 33 countries and 6 continents, and is headquartered in Oxfordshire, UK.

To learn more about customer automation management, visit www.omprompt.com

If you recognise any of the issues identified in this executive briefing, find out how your organisation could address them by requesting our guide: ‘6 steps to combining customer service with transactional excellence’.

Contact:OmPrompt Ltd67 Innovation DriveMilton ParkAbingdonOxfordshireOX14 4RQUK

+44 (0)1235 436000

[email protected]

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