Automating the Order Management Process
Peak shopping seasons such as Black Friday and Cyber Monday are always on the horizon. Traditionally, Black Friday has been a means for retailers to move more stock when the majority of the US is celebrating Thanksgiving. Whilst this is still the case, the internet has increased selling power for retailers through the use of an eCommerce web store – refuelling competitive prices and providing the ability to reach a larger audience.
On Black Friday and Cyber Monday last year websites crashed all over the world as US shoppers racked up $2.4billon in sales, an increase on the previous year of 24%, with UK shoppers spending £810m ($1.2billion). In the UK, the website of electrical retailer Currys crashed, creating queues of at least one hour (I know from experience) just to start browsing the store. They weren’t alone. GAME, Argos and Tesco also experienced website issues. A number of leading UK retailers could not cope with the demands placed on them created by the Black Friday craze, as back office operations and business processes were pushed to the limit.
The nightmare for retailers didn’t end with just a website crashing. UK high street retailers, such as Tesco, Argos and Marks and Spencer, struggled to fulfil orders online. Some Marks and Spencer customers faced a delivery delay of 10 days, with Amazon Prime customers experiencing delays in its next day delivery service. It is a common retail issue, with 67% of UK retailers struggling with demand at peak seasonal times.
As internet sales increased by 92% and traffic volumes 600% higher than the average day, it’s fair to say that retailers will be better prepared this year than last. Popularity with consumers is expected to rise again this year with the Black Friday forecast for 2015 set to top £1billion.
It’s evident that an increase in popularity over Black Friday, Cyber Monday and the Christmas period has increased the pressure on retailers to exceed customer expectations. Unfortunately for retailers around the world, a customer has high expectations, such as a website that doesn’t crash and for their order to be processed and fulfilled quickly and efficiently, regardless of the challenges the retailer is facing.
Peak Periods Bring Added Strains to Business Processes
I concede that the retailers mentioned above are some of the UK’s largest and most recognisable brands, so demand will be naturally high. However, they provide a good example of the demands placed on retailers during peak periods. Regardless of the size of the business, each organisation will have its own order processes. The short version is that stock levels need to be monitored and synchronised with an eCommerce store, orders need to be processed and fulfilled by a courier service, and customer information placed into an accounting or ERP system.
Peak periods bring increased running costs, added strains to business systems and an increase in employee workload. In fact, the true cost of order processing is often overlooked.
Some organisations are fortunate to have an automated order management process. For others, order management is a time-consuming, error prone and costly process. Online retailers that process orders manually on a day-to-day basis have, in some respects, learned to cope with the repetitive manual bi-directional data entry processes between multiple business systems.
But, why create more work and increase running costs when an order management process can be automated? Employees don’t need to manually process orders when they can be adding value elsewhere in the business.
How Much Does Manual Order Processing Cost Your Organisation?
As highlighted above, the hidden costs of eCommerce are the manual, standardised processes that are required to complete an order from purchase to delivery. These costs are, in the main, standardised employee tasks that most organisations address in the first instance with the employment of people. As peak periods approach, operational costs increase as does the number of temporary employees needed to assist the eCommerce order management process.
Not all hidden costs can be eradicated completely, but the majority can. The main hidden costs and problems are caused by repetitive data entry tasks. More specifically, the rekeying of data to and from an eCommerce platform to other systems and applications.
The ability to remove these costs is made possible through the very nature of the process itself. The data is always structured, e.g. Name, Address, Telephone, Product(s) Purchased etc., and therefore can be automated through application integration.
Automating everyday data entry enables organisations to remove the costs currently associated with these processes or, alternatively, reallocate resource to other business functions that adds positive monetary value.
Another significant bonus of removing these costs from the organisation is that automating standardised processes ensures that organisations can scale in size without requiring additional resource and overheads to processes higher volumes of business.
Are Your Business Systems Ready for Automated Order Management Processes?
Ultimately, the goal is to extract the maximum profit from each online sale. In highly competitive arenas, extracting more value may enable you to become more competitive on price or promotion of your offerings. Regardless of an organisations overall goal, removing hidden costs from the order management process is a priority that many organisations are already beginning to address.
Having the ability to synchronise information between systems and applications, enabling them to talk to each other, is seen by many retail professionals as one of the biggest challenges they face. The hardest part is how to combat system integration. Which is the best avenue to take? A bespoke development project or implement specialist integration tools by a third party platform to sit in the middle of systems and applications to push and pull data?
Bespoke development to integrate business systems can be costly to implement, restrict future system upgrades and can suffer time constraints and maintenance issues. On the other hand, at a fraction of the cost of bespoke development, specialist integration platforms can be simplistic and quick to deploy and allow future upgrades as your business grows.
For more information on how to automate order management processes download the brochure below or call +44 (0)330 998 8700.
