Part 3: Sales Order Automation – Behind the Numbers
In Part 1 of this blog I looked at the motivation for implementing an enterprise level Sales Order Automation solution. In Part 2 of the series I highlighted two possible design approaches (Wide & Shallow and Narrow & Deep) that we at MagicLamp Software find to be very successful. In this third and final blog post of this series I will attempt to go behind the numbers based on the design approach selected.
BEHIND THE NUMBERS
The reality of the situation when automating a Sales Order process is that there are varying levels of STP (Straight Through Processing), that can be anticipated based on the approach used. Understanding how the varying STP will impact your business is critical to the perceived success of the automation project.
With proper expectations and the “upfront” work completed, the immediate gains achieved by your business can be immense. To assist clients in preparing to achieve success, part of our delivery methodology is to lead a workshop that centers on how previous clients have succeeded.
Wide & Shallow: The wide & shallow design strategy is one where the Sales Order Automation solution must cover a wide range of functionality. The goal with this strategy is to be able to process a large number of different customer sales orders immediately. This approach does not focus on STP, rather it focuses on reducing the manual data entry required. With this design many sales orders will be sent to the Verify Task for manual review. Even though a high number of orders are sent to verify, the entry process is sped up immensely as the operators will be correcting only certain values, not manually entering the entire order.
Narrow & Deep: Using the narrow & deep design strategy the process is primarily focused on STP (Straight Through Processing) results. Organizations that implement this strategy are looking at onboarding a select few customers (often the larger volume customers) and are focused on ensuring that those sales orders have manual review only for the rare exceptions. Organizations often desire this approach if the top two or three customers account for the majority of the overall sales orders being processed on a daily basis.
Everyone’s question is how many Sales Orders will be processed on a daily basis? This is a difficult question to answer as there are many variables in play, which MagicLamp will review with you during the workshop.
To approximate how many Sales Orders are going to go STP we’ll use the following scenario. For the Wide & Shallow strategy this could be a minimal number, example 5% and for the Narrow & Deep design strategy the STP value can be very high, estimate 75 – 90%. Using either design will bring value to your sales order process, the variance of immediate STP to manual verification will be determined by your corporate requirements.
An order of magnitude can be generated using the following steps. Determine how many Sales Orders your automation solution will intake on a monthly basis. For this example, let’s assume 5000 Sales Orders per month. An average of 21 working days is used in the calculations.
5000 orders processed over 21 days is 238 orders per day.
Based on the design strategy implemented one can see that an organization may need to manually verify anywhere from ~60 or less (Narrow and Deep) to ~227 Sales Orders (Wide and Shallow) per day.
Setting early expectations, understanding the downstream effects of this automation and preparing change management will greatly enhance the satisfaction of the teams involved at your company.
If you would like to learn more about Sales Order Automation or want to see if Sales Order Automation can help your organization Click Here to request a one on one conversation with MagicLamp’s Sales Order Automation team.