The Essentials of Order Management
by Adam Kleinberg
As the flavor of CPQ (quoting) begins to wane, the market for Billing begins to stratify and specialize. It is important to understand the critical and yet foundational part of the subscriber relationship. Some call it, “on-boarding,” others call it, “fulfillment” and many refer to it as “change management.” It all boils down to, “Order Management.”
How a new solution request is processed is arguably where the rubber hits the road. It doesn’t matter how you select the products and what the pricing model is, if the end subscriber never gets what he signed up for.
It seems common sense to say that it is another group’s responsibility, or that it is a separate topic from billing, but, neither holds true. When you look at the SRM (Subscriber Relationship Management) life-cycle, Solution Delivery is the only part that turns promise into commitment.
So what is Order Management? How does it interweave with Quoting, Subscription Management, and Billing? Where does it sit in the world of monetization?
Order management is the grouping of actionable events associated with the individual components of a quote. Within the domain of Order Management are timings, alerts and instructions that may impact the ability to collect payment, trigger purchases and create a cascade of outbound expenditures. Without a well-defined Order Process attached to a product or service suite, the client relationship is at risk before the first usage can be calculated.
When ChikPea began, we started as an Order Management product provider. Even before we entered the appexchange, we had built a solution for commercial laboratories. A LIMS solution which is still used today as the system of record for our clients. From the LIMS solution, ChikPea turned focus to the Telecom industry. We knew that this was the market that had very little in the way of COTS and it was the right time and platform to rectify that.
We saw that some of the largest companies in that space were using spreadsheets to get things done but, worst of all, there was no technical or functional communication between sales, order processing, and the financial team.
An example of the impact of a disconnected service model:
A prospect came to ChikPea with the following debacle where the original quoted solution had to be translated into the legacy price book once the sales ticket was submitted. That translation caused each of the line items to be re-keyed with their older names and prices (albeit with the associated discounts needed to achieve the original price). The service delivery team then received instructions to install, which were in effect, legacy services. The selected products didn’t perform to the original specifications because they were the wrong versions, so the support team authorized the upgrade to the modern service suite but, didn’t apply the contract pricing. The result of this fiasco were monthly overages on the bill because the pre-paid amounts were not covering the solutions being used. Twelve months later, the sales associate happened to be performing a customer satisfaction call and found that none of the products that he had quoted for and committed to were delivered in the way he had promised. A lawsuit followed to determine what could be done to make the client whole for the extensive overcharging that took place of the course of the contract.
Order Management may not always be a vast array of triggers and fulfillment tasks but may simply be the creation of a license key and its delivery to the client instantly, while other Order Management actions may require orchestration, provisioning and activation.
Either way, a failure is a failure, and when it is the first experience a new subscriber has with a firm, the future of that relationship comes into question even before the first bill.
All subscriptions begin in one way or another with an Order. Not all companies will need a quote/proposal, but all need an Order. The sales associate is the face and voice of the company yet, many companies take the order layer and all of its detail out of his responsibility once the deal is signed. The subscriber is now left with an anonymous contact to call if there are questions or concerns while the sales team is out bringing down the next deal. In the enterprise space, that offers a breach of trust that was forged between to parties. When the client sees things going differently than expected, the order team is left saying, please contact your sales associate because “This is what he wrote on the order”.
The biggest complaint we hear when clients come to us from either home grown solutions or competitors is “They promised us something in the sales cycle which was just not happening.” One of our clients said that the number one complaint during exit interviews was their previous Billing and Order Management system.
Whether it is a single step process or a multi-phase delivery, the client expects that the person who sold them the contract is their advocate and will make sure the delivery happens in the way it was promised. That concept is lost in many solutions, and is why we focus on all three parts of the SRM suite.
From a monetary perspective, each delivery step is an expenditure by the vendor. The more steps the less profitable the offering, the higher the risk of failure and loss of subscriber loyalty. This gets reflected in the billing system.
Subscriber retention is about more than just sending a bill, but establishing and retaining proof of value. When the subscriber states that they did not get what they paid for over the previous bill cycle, who takes that complaint? Who should be responsible for problem resolution and, should the client be expected to pay 100% of a bill when not 100% of the service was delivered? Interconnecting Quoting, Service Delivery (Order Management) with Billing and payments has become not only a good idea, but a critical path to subscriber loyalty.
For ChikPea, it was from our knowledge of the various types of products, pricing models, and delivery tasks that we build our O2B (Order to Billing) product after our initial TOM (Telecom Order Management) solution. We saw that since we understood the complexities that come with each type of recurring revenue solution the telecom industry had been dreaming up since the days of Ma Bell, we should build the kind of billing system that today’s fast changing market demands.