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IBM Sterling Order Management Enables
More Efficient Relationships Among B2B Businesses
This a Total Economic Impact (TEI) study to provide readers with a framework to evaluate the potential financial impact of IBM Sterling Order Management on their organizations. To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed several customers with experience using Sterling Order Management. This spotlight highlights the IBM Sterling Order Management experience for a B2B organization.
The interviewed B2B organization in the motion control technology industry deals with many unique partners across multiple channels. The organization detailed their improved ability to manage inventory, fulfill orders, develop and maintain relationships with partners, and serve their customers as a result of their IBM Sterling Order Management investment.
Quantified benefits: The following risk-adjusted quantified benefits are representative of those experienced by the companies interviewed:
Unquantified benefits. The interviewed organization(s) experienced the following benefits which are not quantified for this study:
B2B Organizations Can Drive Internal Efficiencies With Partners While Better Serving Their Customers
New profit from improved order management. Interviewees collectively described an uplift in their eCommerce conversion rates after implementing IBM Sterling Order Management. One B2B organization noted that their IBM Sterling Order Management deployment improved their ability to locate inventory across their partner ecosystem and ultimately capture and service customer demand, leading to revenue increases. They noted: “We’ve reduced the instances in which inaccurate inventory information impacts order fulfillment for our customers. Knowing where our inventory is and feeling confident about that information is one of the biggest benefits for us.” This has significantly reduced the complexity in aggregating important information for a customer and delivering it to them in an efficient way.”
Savings from improved operations. Interviewees noted improvements in operations as a result of IBM Sterling Order Management. Reductions in shipping, inventory carrying, and inventory placement were cited as areas of cost savings. One B2B organization described internal efficiency gains with respect to their order fulfillment across multiple divisions: “Each division would historically require their own PO for each order. Now, we can collapse this down to a single purchase order and break it apart in IBM Sterling OMS for each of the divisions involved rather than each of them getting their own unique PO from the customer.” The interviewee also described efficiency savings from consolidating multiple systems into a single pane of glass view across all divisions and partners: “We have a couple of centers that used to have to log in to about 17 different systems to view our operations. Now they essentially go to just a single screen.”
In addition, speed to customer order fulfillment is extremely important to B2B organizations, as MRO (maintenance, repair, operations) demand from the
organization’s website is now passed along to key partners who will fulfill these orders in real-time. Once the order is fulfilled, that information is passed back for reference on future orders.
Avoided costs of previous order management solutions. One interviewed B2B organization saved on license fees, regular hardware upgrades, FTE maintenance hours, and internal development fees by moving to IBM’s Order Management system from their disparate set of tools connecting their front-end and back-end applications. The interviewee noted that the level of functionality that the organization has achieved with their IBM Sterling OMS would have been impossible given their prior personnel and resource constraints.
Improved customer experience delivery. One B2B organization noted that customer experience improvement was their greatest achievement with their IBM Sterling OMS. The interviewee described a reduction of friction in the ordering process for customers, who historically needed to navigate multiple processes and interfaces depending on which business units or external partners of the organization they were working with for each order. In addition, order fulfillment speed has increased, driving an improved experience with customers. One organization noted that on MRO (maintenance, repair, operations) deals, for instance, an improvement in fulfillment speed can make a major difference for customers: “In a MRO context, our customers
often have a machine that’s broken and needs to be repaired immediately, so knowing exactly where our inventory is allows us to get it to them faster. We’re in a great position visibility-wise to deliver a better customer experience.”
A single source of truth for all parties involved in a deal. “Our IBM Sterling OMS positions us to aggregate and use information in a single place versus connecting dots across our ecosystem.
IBM Sterling Order Management Costs Include License Fees, Implementation And Ongoing Management Personnel Hours
The interviewed B2B and B2C organizations experienced three categories of the cost associated with the IBM Sterling Order Management investment. Over three years, the composite organization expects risk-adjusted total costs to be a PV of $4.6 million.
IBM Sterling Order Management Enables B2B Organizations To Develop Stronger, Digital Relationships With Their Key Partners And Customers
The value of flexibility is clearly unique to each customer, and the measure of its value varies from organization to organization. There are multiple scenarios in which a customer might choose to implement IBM Sterling Order Management and later realize additional uses and business opportunities, including:
The digitization and strengthening of B2B relationships. One interviewed B2B company noted that their IBM Sterling OMS allows them to operate in ways that B2C companies historically do, which in their industry represents a significant competitive advantage. Notably, for both partners and customers, a single source of information across all parties encourages a digital ongoing relationship versus “transactional” relationships which were historically the norm. The interviewee was optimistic about their organization’s ability to benefit from these improved relationships over time. They added: “We believe the winners in our industry will be those who can digitize their relationships the fastest and the most efficiently to make it easy for
customers and partners to transact with them. Our [IBM Sterling] OMS allows us to form stronger bonds within our customer and partner ranks, which in turn is going to improve our ability to retain these customers and partners.”