Guest Column | September 29, 2016

OTC: Order To Cash Efficiency, Now Available Over The Counter

By Dave Caldeira, Senior Vice President, Product & Solutions Marketing, Lexmark

Automation key to customer service, long-term growth

Do you find your business growth trapped “under orders?” Wouldn’t you like to get it out from under them?

Research has shown more than 75 percent of organizations believe the time involved in manually processing sales orders constitutes a genuine impediment to the growth and potential of their company. While most businesses rely on customer orders to stay in business, the actual work associated with processing said orders can, ironically, become a drain on resources; at once a blessing and a curse.

Standardizing the orders process can be difficult because we all want to provide the best possible service to our customers. Unfortunately, too often this means handling each customer uniquely leading to a highly unstructured process.

Orders require special handling and are often far more complex than merely keying in data. There’s contract pricing. There’s the matter of ensuring the goods are actually available for immediate shipment. There are credit checks. Some scenarios demand pricing overrides (and the relevant safeguards to ensure no abuse). Errors or gaps in these controls can lead to incorrect shipments, costly returns, and unhappy customers.

When it does come down to merely keying data, the process can be painfully slow and represent a less-than-ideal use of valuable human resources. Complex, manual routines inhibit visibility. It’s difficult to understand how order times impact days sales outstanding (DSO). It limits working capital. You might not know when an account should go to collections or, conversely, you might have an account in collections but the payment has actually been received and not yet processed.

Each of these is an ongoing pain point for sales order processing and each points to the need to implement intelligent, scalable process automation. The value of automation here can be summarized as ensuring your organization is making optimal use of its resources — eliminating waste and, in the process, generating opportunities for continuous improvement.

With manual routines, your orders process is prone to waste from a number of sources, including:

  • returns
  • lack of inventory
  • data entry errors
  • incorrect pricing
  • delivery issues
  • product/customer data issues
  • approval backlogs
  • missed special instructions

Waste is not merely a concern for accounting purposes, but also because it’s often tied to customer service issues. Poor customer service leads to customer loss. Customer loss leads to fewer orders. Fewer orders leads to revenue loss. Revenue loss leads to suffering.

A comprehensive, intelligent automation solution — including capture, workflow, content management, and integration with existing ERP systems — provides immediate accuracy and visibility, freeing employees to focus their efforts on customer service. Orders are filled more quickly. Higher volumes can be handled without increased strain on staff. Order sources and formats — paper-based, email, EDI, website-based, phone, fax, and others — become largely irrelevant, as order data is digitized and consolidated into a single input flow.

Case In Point: Just What The Doctors Ordered

Cook Medical Inc. is one business that observed the value of automation in orders processing firsthand. Receiving more than 1,500 faxed orders daily, the medical supplies provider was straining to manually process these orders with a staff of 12 performing manual data entry. Such a routine could not scale to meet the demands of increased volumes, and it was a struggle to deliver on their policy of shipping within 24 hours.

“The manual handling caused a significant amount of chaos,” said Lou Ann Fortner, their customer service manager. “To meet our deadlines and not set back the shipping department, we needed a more efficient way to process purchase orders.”

Cook Medical Inc. implemented the ReadSoft Entrance application for order capture, from Lexmark. As a result, purchase orders were automatically interpreted, verified, validated, and readied for automatic processing. The department has moved 25 percent of its staff away from sales processing duties, eliminated all overtime costs, and pursued a greater focus on order accuracy and customer service.

Your sales order process may be slow and manual, prone to creating customer service problems and limiting visibility into several key aspects of your situation at any given time — but it need not stay that way. Automation can provide you with the capabilities you need to make the most effective use of your resources, give customers the experience they seek, and take control of your DSO and cash position.

About The Author
Dave Caldeira is Senior Vice President, Product & Solutions Marketing at Lexmark. As a product and strategy executive for Lexmark’s Enterprise Software, Dave guides the Enterprise Group’s strategy to deliver the most comprehensive and unified smart process and content application platform in the market.