Digital Tools Can Close The Order Management Performance Gap

Nilly Essaides

Automation makes a big difference in the performance of the order-management process. Companies that manually input most of their orders take longer, spend more, and have more errors. The Hackett Group 2017 benchmarking research analysis shows that world-class companies (in the top quartile) automate 64% of their orders, or 1.5X more than typical companies. They complete the orders in a third of the time and have 50% fewer errors.

Source: The Hackett Group 2017 Benchmarking Study Analysis

For a time, there was nothing companies could do about orders that came in via phone, fax, or email. An agent had to input and validate them. But digital technologies are opening new connectivity paths; these new tools reduce the need for human intervention, dramatically speed up the process, and make it more cost-effective.

Three digital routes: a use case

One fast-growing, $2 billion distribution company gets 65% of its orders via its website. However, the rest come in via email or fax. Those orders used to take about 10 minutes each to process and almost always required a follow-up call to confirm an address or part number. To reduce manual labor, the company adopted three digital initiatives:

  1. It acquired an artificial-intelligence (AI)-enabled solution that reads incoming faxes and emails if they arrive in a standardized format. It then directly enters them into the order management system.
  2. It set up the capability to work directly with third-party portals like Ariba, where the company’s catalog is already stored.
  3. It develops APIs to enable more advanced customers to establish direct machine-to-machine connectivity.

The results have been dramatic. Using the first path for only a portion of its customers, the company cut cycle time on orders from ten to three minutes, leading to significant savings of 50 person-hours per day.

According an executive at the company, artificial intelligence is the biggest buzzword, and everyone is going digital. Between AI and APIs, this company is taking advantage of digital technologies to simplify, automate, and lower the cost of its order management process. That’s the way of the future.

Going forward

Using the latest in digital technology, order management can improve its performance in three ways:

  1. It can automate the process of emailed and faxed orders through AI-enhanced systems that read more standardized orders and directly enter them into the internal order-management systems.
  2. It can rely on robots to bridge gaps between multiple systems including external portals.
  3. It can build APIs to connect its systems with those of its customers for direct machine-to-machine interaction.

Using such approaches, finance can greatly reduce the cost and increase the accuracy of the order management process, closing the gap between world-class order management organizations and the peer or median group.

For more on how automation and AI is transforming business processes, see How Digitalization Drives Automation In Finance.

Comments

Nilly Essaides

About Nilly Essaides

Nilly Essaides is senior research director, Finance & EPM Advisory Practice at The Hackett Group. Nilly is a thought leader and frequent speaker and meeting facilitator at industry events, the author of multiple in-depth guides on financial planning & analysis topics, as well as monthly articles and numerous blogs. She was formerly director and practice lead of Financial Planning & Analysis at the Association for Financial Professionals, and managing director at the NeuGroup, where she co-led the company’s successful peer group business. Nilly also co-authored a book about knowledge management and how to transfer best practices with the American Productivity and Quality Center (APQC).

Machine Learning With Heart: How Sentiment Analysis Can Help Your Customers

Lance Hughes

When you think of artificial intelligence (AI), the word “emotion” doesn’t typically come to mind. But there’s an entire field of research using AI to understand emotional responses to news, product experiences, movies, restaurants, and more. It’s known as sentiment analysis, or emotion AI, and it involves analyzing views – positive, negative, or neutral – from written text to understand and gauge reactions.

Sentiment analysis can be used for survey research, social media analyses, and tracking psychological trends. Picture software that scans articles, reviews, ratings, and social media posts to determine sentiment changes for hotel guests. Hoteliers will, for example, aggregate and assess ratings and reviews in effort to improve guest satisfaction.

The tech behind sentiment analysis involves natural language processing or linguistic algorithms that assign values to positive, negative, or neutral text (converting opinions into datasets), while machine learning processes the datasets to reveal relevant trends over time. There’s significant planning required: How do you ensure the algorithms capture useful information? Are you identifying the right phrases to analyze? How can you convert findings into better products, services, and experiences?

At Concur, for instance, sentiment analysis has provided invaluable insights. Recently, Concur Labs and Concur UX Analytics developed a sentiment analysis tool for user product reviews. This tool automatically extracts themes to determine how customers feel about Concur’s service and helps identify which features people like most and which ones they find frustrating.

Emotion gauging is complicated

If we could categorize responses with just one emoji, that would easy. But humans are far more complicated and fascinating. This complexity applies to sentiment analysis. For example, comments like: “The film was very good,” are easy to analyze. But it gets a little harder when you add negation: “The film wasn’t bad.” It gets much harder when you add terms that would normally come across as positive but are actually negative based on context. For instance, “I wish this film was good. There were great many things it could have done right but didn’t.”

As a relatively new field, approaches are varied and maturing. Analysis has been traditionally conducted by taking what’s called a “bag of words” approach. Basically creating a list of all the words used along with how many times they were used. With this method, word order is thrown out the window. So “not bad” would come out as negative. Modern methods use recurrent neural networks called LSTMs (long short-term memory) to compress the entire sentence into a vector (a list of numbers) that encapsulates the meaning of the sentence, taking word order into account. This tends to have higher accuracy.

For businesses invested in customers, analyzing each piece of feedback by hand can be overwhelming. Sentiment analysis, developed within context, can help catch issues early and provide guidance on how to improve services. The related machine learning algorithms can take vast amounts of data; learn and perform specific tasks quickly; and sift through data based on your priorities. As the technology advances, businesses can benefit from these in-depth insights and customer satisfaction will surely follow suit.

Learn more about marketing in an increasingly data-driven era. Read about Influencing Customers Through Infinite Personalization.

Comments

Lance Hughes

About Lance Hughes

Lance Hughes is a principal creative technologist for Concur Labs. With a background in machine learning and mobile development, he helped design and develop multiple top-selling apps while working at Smashing Ideas and Sweet Action Games, a company he founded. When he's out of the office, Lance enjoys composing music, hosting deep learning meetups, spending time with his family, and exploring augmented and virtual reality.

Digitalist Flash Briefing: Answers To Two Burning Questions About Conversational AI

Bonnie D. Graham

Today’s briefing looks at a current hot topic – conversational AI and digital assistants for your business – from the perspective of another hot innovation from back in the day.

  • Amazon Echo or Dot: Enable the “Digitalist” flash briefing skill, and ask Alexa to “play my flash briefings” on every business day.
  • Alexa on a mobile device:
    • Download the Amazon Alexa app: Select Skills, and search “Digitalist.” Then, select Digitalist, and click on the Enable button.
    • Download the Amazon app: Click on the microphone icon and say “Play my flash briefing.”

Find and listen to previous Flash Briefings on Digitalistmag.com.

Read more on today’s topic

 

Comments

Bonnie D. Graham

About Bonnie D. Graham

Bonnie D. Graham is the creator, producer and host/moderator of 29 Game-Changers Radio series presented by SAP, bringing technology and business strategy thought leadership panel discussions to a global audience via the Business Channel on World Talk Radio. A broadcast journalist with nearly 20 years in media production and hosting, Bonnie has held marketing communications management roles in the business software, financial services, and real estate industries. She calls SAP Radio her "dream job". Listen to Coffee Break with Game-Changers.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

Link to Sources


From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

Comments

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

Tags:

Blockchain: Much Ado About Nothing? How Very Wrong!

Juergen Roehricht

Let me start with a quote from McKinsey, that in my view hits the nail right on the head:

“No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”

Now, in the industries that I cover in my role as general manager and innovation lead for travel and transportation/cargo, engineering, construction and operations, professional services, and media, I engage with many different digital leaders on a regular basis. We are having visionary conversations about the impact of digital technologies and digital transformation on business models and business processes and the way companies address them. Many topics are at different stages of the hype cycle, but the one that definitely stands out is blockchain as a new enabling technology in the enterprise space.

Just a few weeks ago, a customer said to me: “My board is all about blockchain, but I don’t get what the excitement is about – isn’t this just about Bitcoin and a cryptocurrency?”

I can totally understand his confusion. I’ve been talking to many blockchain experts who know that it will have a big impact on many industries and the related business communities. But even they are uncertain about the where, how, and when, and about the strategy on how to deal with it. The reason is that we often look at it from a technology point of view. This is a common mistake, as the starting point should be the business problem and the business issue or process that you want to solve or create.

In my many interactions with Torsten Zube, vice president and blockchain lead at the SAP Innovation Center Network (ICN) in Potsdam, Germany, he has made it very clear that it’s mandatory to “start by identifying the real business problem and then … figure out how blockchain can add value.” This is the right approach.

What we really need to do is provide guidance for our customers to enable them to bring this into the context of their business in order to understand and define valuable use cases for blockchain. We need to use design thinking or other creative strategies to identify the relevant fields for a particular company. We must work with our customers and review their processes and business models to determine which key blockchain aspects, such as provenance and trust, are crucial elements in their industry. This way, we can identify use cases in which blockchain will benefit their business and make their company more successful.

My highly regarded colleague Ulrich Scholl, who is responsible for externalizing the latest industry innovations, especially blockchain, in our SAP Industries organization, recently said: “These kinds of use cases are often not evident, as blockchain capabilities sometimes provide minor but crucial elements when used in combination with other enabling technologies such as IoT and machine learning.” In one recent and very interesting customer case from the autonomous province of South Tyrol, Italy, blockchain was one of various cloud platform services required to make this scenario happen.

How to identify “blockchainable” processes and business topics (value drivers)

To understand the true value and impact of blockchain, we need to keep in mind that a verified transaction can involve any kind of digital asset such as cryptocurrency, contracts, and records (for instance, assets can be tangible equipment or digital media). While blockchain can be used for many different scenarios, some don’t need blockchain technology because they could be handled by a simple ledger, managed and owned by the company, or have such a large volume of data that a distributed ledger cannot support it. Blockchain would not the right solution for these scenarios.

Here are some common factors that can help identify potential blockchain use cases:

  • Multiparty collaboration: Are many different parties, and not just one, involved in the process or scenario, but one party dominates everything? For example, a company with many parties in the ecosystem that are all connected to it but not in a network or more decentralized structure.
  • Process optimization: Will blockchain massively improve a process that today is performed manually, involves multiple parties, needs to be digitized, and is very cumbersome to manage or be part of?
  • Transparency and auditability: Is it important to offer each party transparency (e.g., on the origin, delivery, geolocation, and hand-overs) and auditable steps? (e.g., How can I be sure that the wine in my bottle really is from Bordeaux?)
  • Risk and fraud minimization: Does it help (or is there a need) to minimize risk and fraud for each party, or at least for most of them in the chain? (e.g., A company might want to know if its goods have suffered any shocks in transit or whether the predefined route was not followed.)

Connecting blockchain with the Internet of Things

This is where blockchain’s value can be increased and automated. Just think about a blockchain that is not just maintained or simply added by a human, but automatically acquires different signals from sensors, such as geolocation, temperature, shock, usage hours, alerts, etc. One that knows when a payment or any kind of money transfer has been made, a delivery has been received or arrived at its destination, or a digital asset has been downloaded from the Internet. The relevant automated actions or signals are then recorded in the distributed ledger/blockchain.

Of course, given the massive amount of data that is created by those sensors, automated signals, and data streams, it is imperative that only the very few pieces of data coming from a signal that are relevant for a specific business process or transaction be stored in a blockchain. By recording non-relevant data in a blockchain, we would soon hit data size and performance issues.

Ideas to ignite thinking in specific industries

  • The digital, “blockchained” physical asset (asset lifecycle management): No matter whether you build, use, or maintain an asset, such as a machine, a piece of equipment, a turbine, or a whole aircraft, a blockchain transaction (genesis block) can be created when the asset is created. The blockchain will contain all the contracts and information for the asset as a whole and its parts. In this scenario, an entry is made in the blockchain every time an asset is: sold; maintained by the producer or owner’s maintenance team; audited by a third-party auditor; has malfunctioning parts; sends or receives information from sensors; meets specific thresholds; has spare parts built in; requires a change to the purpose or the capability of the assets due to age or usage duration; receives (or doesn’t receive) payments; etc.
  • The delivery chain, bill of lading: In today’s world, shipping freight from A to B involves lots of manual steps. For example, a carrier receives a booking from a shipper or forwarder, confirms it, and, before the document cut-off time, receives the shipping instructions describing the content and how the master bill of lading should be created. The carrier creates the original bill of lading and hands it over to the ordering party (the current owner of the cargo). Today, that original paper-based bill of lading is required for the freight (the container) to be picked up at the destination (the port of discharge). Imagine if we could do this as a blockchain transaction and by forwarding a PDF by email. There would be one transaction at the beginning, when the shipping carrier creates the bill of lading. Then there would be look-ups, e.g., by the import and release processing clerk of the shipper at the port of discharge and the new owner of the cargo at the destination. Then another transaction could document that the container had been handed over.

The future

I personally believe in the massive transformative power of blockchain, even though we are just at the very beginning. This transformation will be achieved by looking at larger networks with many participants that all have a nearly equal part in a process. Today, many blockchain ideas still have a more centralistic approach, in which one company has a more prominent role than the (many) others and often is “managing” this blockchain/distributed ledger-supported process/approach.

But think about the delivery scenario today, where goods are shipped from one door or company to another door or company, across many parties in the delivery chain: from the shipper/producer via the third-party logistics service provider and/or freight forwarder; to the companies doing the actual transport, like vessels, trucks, aircraft, trains, cars, ferries, and so on; to the final destination/receiver. And all of this happens across many countries, many borders, many handovers, customs, etc., and involves a lot of paperwork, across all constituents.

“Blockchaining” this will be truly transformational. But it will need all constituents in the process or network to participate, even if they have different interests, and to agree on basic principles and an approach.

As Torsten Zube put it, I am not a “blockchain extremist” nor a denier that believes this is just a hype, but a realist open to embracing a new technology in order to change our processes for our collective benefit.

Turn insight into action, make better decisions, and transform your business. Learn how.

Comments

Juergen Roehricht

About Juergen Roehricht

Juergen Roehricht is General Manager of Services Industries and Innovation Lead of the Middle and Eastern Europe region for SAP. The industries he covers include travel and transportation; professional services; media; and engineering, construction and operations. Besides managing the business in those segments, Juergen is focused on supporting innovation and digital transformation strategies of SAP customers. With more than 20 years of experience in IT, he stays up to date on the leading edge of innovation, pioneering and bringing new technologies to market and providing thought leadership. He has published several articles and books, including Collaborative Business and The Multi-Channel Company.