Innovative, Cloud-Based Order Management Solutions Lead to Enhanced Profitability


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Communication service providers should turn to order management as a service to resolve escalating order management challenges, provide a consistent customer experience across channels, improve order negotiation and configuration, offer faster time-to-launch and comply with emerging variable investment requirements.

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Innovative, Cloud-Based Order Management Solutions Lead to Enhanced Profitability

  1. 1. • Cognizant 20-20 InsightsInnovative, Cloud-Based OrderManagement Solutions Lead toEnhanced Profitability Executive Summary forms of content delivery and interaction. New innovations are creating inter-industry relation- To contend with increasing product and service ships among communications players and the complexity, communication service providers Internet, media, entertainment, information (CSPs) must once and for all resolve escalating services and technology sectors, creating chaos order management challenges that threaten to and forcing transformation. undermine the sanctity of their core business operations. Fortunately, a new wave of process CSPs have been at the center of globaliza- and technology innovation has arrived that aligns tion and virtualization. Fiber/data is enabling a and integrates order management requirements connected world, while wireless networks are with emerging IT solutions and delivery models. allowing work to be performed anywhere. CSPs This new approach creates a foundation have introduced new technologies and services that promises to not only streamline order that allow knowledge work of all forms to migrate management activities but also provide a launch to different locations worldwide. This is enabling pad for improved top- and bottom-line perfor- people and processes to come together in a virtu- mance, as well as customer satisfaction. alized world, resulting in greater inter- and intra- organizational collaboration and productivity. This approach will provide a more integrated customer experience across channels, improve CSPs have positioned themselves to lead the order negotiation and configuration, offer cloud services revolution. Examples include faster time-to-launch and comply with emerging Verizon’s acquisition of Terremark1 and Century- variable investment requirements. It will also Link’s acquisition of Savvis.2 These initiatives are enable smarter and more automated business changing the business model for CSPs by creating processes to support fallout management. more value-added services, supported by a wider array of software and information partners. These The Changing CSP Space initiatives will also change how individuals and CSPs have reached a turning point. Today, the corporations collaborate and perform work in the CSP value chain extends from infrastructure new globalized and virtualized world (see sidebar, management and service provisioning, to new next page). cognizant 20-20 insights | september 2011
  2. 2. Embracing the Future of WorkFour irreversible and interconnected forces are value levers that reveal how to build and deployforever reshaping the workplace, creating new next-generation solutions and improve operation-challenges and business opportunities. These al performance (see Figure 1). Each of these valuefuture-of-work forces are: levers offers a path to new levels of performance within a future-of-work context. It’s time for CSPs• Globalization: Knowledge work of all forms is to look internally to fully utilize these enablers/ migrating to locations worldwide, where talent forces to improve business performance and is abundant and costs are acceptable. internal operations.• Virtualization: This includes not just One area where the future of work is emerging technology virtualization but people and is within order management. CSPs are facing process virtualization, as well, resulting in decreasing market share due to delayed product more collaborative and productive ways of launches and poor product rollout. These new working. products and services are more complicated and• The rise of millennials: New social and oper- require more coordination to support product ating norms are emerging in the enterprise as launches, as well as resolve customer questions. a new mindset inspired by digitally savvy and Antiquated systems are difficult to maintain, always connected workers dictates changes in and low order flow-through, along with high how and where work is conducted. exception levels, are escalating the costs for• New technologies: The proliferating cloud order management. is enabling new social, mobile and advanced Systems are also not designed to address process analytics technologies to support new ways flexibility. As a result, IT and business operations for work to be performed inside the enterprise remain disconnected, creating slow and inef- and with partners and customers. ficient responses, resulting in greater orderThese four forces are driving opportunities for exception volume, high average handle times anddisruptive value creation. Decision-makers across more manual touches per are exploring new avenues to adapt The challenges and opportunities presented byand capitalize on these trends. We have built a the four future-of-work forces are causing orga-Value Creation Framework to assess operational nizations, including CSPs, to rethink how, wherechallenges and uncover business opportunities. and by whom work should be conducted.This “diamond” framework contains four keyValue Levers for Disruptive Creation Virtualization Shift CapEx from context to core. Effectiveness Innovation Improve quality, Building Creating new Stronger control, customer Businesses revenue satisfaction. streams. Efficiency Eliminate waste, streamline processes.Figure 1 cognizant 20-20 insights 2
  3. 3. These new ways of conducting business are having The complexities of order management willan impact on how and where work is performed. continue to increase. As new business modelsIn the future, more collaborative and virtual ways emerge and services expand, CSPs must be flexibleof working will emerge that create new opera- enough to respond quickly to deliver new producttional efficiencies by reducing manually intensive bundles for customers and do so with utmostprocesses. This will help organizations achieve efficiency. The ultimate goal isgreater levels of business performance by elimi- to implement a fully automatednating order fallout. order management process. The complexities of However, typical implemen- order management willWe have developed a new approach to improving tations result in numerous continue to increase.order management, called OMaaS, or Order manual steps and exceptions,Management as a Service. This approach incor- which are costly to the orga- As new businessporates new methodologies that align business nization. Fallout often leads models emerge andrequirements and emerging IT solutions and to manual exception handling, services expand,delivery models in an integrated solution that thus negatively impacting thestreamlines and increases the effectiveness of ROI of a new product introduc- CSPs must be flexiblethe entire order management process. With this tion. enough to respondapproach, we are already providing our clientswith a more integrated customer experience Changing business models quickly to deliver newacross channels, as well as improved order negoti- and increased complexity of product bundles foration and configuration and faster time-to-launch. products and services can customers and do soIn sum, OMaaS meets CSPs’ variable investment lead to higher fallout rates.requirements, while delivering smarter and more As business grows and order with utmost efficiency.automated business processes to support fallout volume increases, the falloutmanagement (see Figure 2). volume typically increases, as well. CSPs must find a way for order management to support higherFuture of Work Impact on order volumes (and revenue levels) without theOrder Management corresponding linear growth in headcount toCSPs are looking to streamline order management support these volumes. At the same time, theyprocesses to support new ways of conducting need to improve business outcomes, reducingbusiness that maximize operational agility and both capital and operating expenditures.profitability. CSPs must deliver a positive, well- Meeting CSPs’ need for enhancing ordercoordinated service for customers or risk losing management processes will not be easy. Onlythem to competitors. They must be both effective so much progress can be made from operation-and reliable in delivering excellent service and al improvements that combine higher levels ofconnectivity across all stages of the operation. automation and knowledge workers. AlthoughWhere OMaaS Helps BUSINESS ATTRIBUTE CURRENT STATE FUTURE STATE Revenue Limited retention and cross- Enhanced retention and cross-selling selling capabilities capabilities Customer experience Manual, opaque, fragmented Transparent, integrated across channels Flexibility Limited opportunity Real-time order negotiation and configuration Speed of product launch 9-12 months Faster time-to-launch Investment High Variable Business operations and Manual, inefficient Smart, automated fallout managementFigure 2 cognizant 20-20 insights 3
  4. 4. OMaaS Supports Initiatives to Enhance Profitability Vendor Partnership / Sourcing Model OMaaS Merged IT (Delivery with & Business Business- Business Oriented SLAs) Operations Traditional Services Staff Augmentation Stabilize Support Streamline Enhance Profitability OM Evolution / Product MaturityFigure 3CSPs can streamline work and make agents more • Reporting and analytics: Improving man-productive, there is a law of diminishing returns. agement decisions and process optimizationSignificant and ongoing process improvements through real-time data.require a new approach to aligning agents andsystems in a way that will drive greater efficien- • Strategic partner relationships: Creating incentives for us to coinnovate with clients,cies as volumes grow. thereby increasing productivity, reducing workforce requirements and sharingThe future of order management is already here. end-to-end accountability through business-With OMaaS, we can help CSPs drive tangible oriented service level agreements (SLAs).benefits by standardizing processes, virtualizingservice delivery and converting capital invest-ments to operational expenses, which reducesupfront and full lifecycle costs (see Figure 3). Align Business, IT andOMaaS weaves together traditional IT delivery Delivery with Innovativewith business services (consulting and BPO) tocreate a new vendor partnership and sourcing Commercial Modelsmodel. The intent is to solve order managementproblems through a low-initial-investment, vari-able-cost model. The key principles are: Align business, Consulting• End-to-end order flow accountability: Ensur- IT and delivery ing flow-through improvements, automation to drive IT BPO and manual handling, where required. common goals Integrated Solution Creation• Operational efficiency and effectiveness: Con- tinued process improvements and relentless pursuit to remove manual work through auto- Business Process Utility mation. Innovative Integrated Technology Fabric commercial• Coordination and execution: Achieving models Multi-Faceted Pricing higher levels of process improvements and Shared Strategic Vision automation through close coordination among consulting, IT and BPO to identify optimal adjustments and execute the changes quickly (see Figure 4). Figure 4 cognizant 20-20 insights 4
  5. 5. The OMaaS Approach Our Cognizant Business Consulting group kicks off the process by taking a very data-We developed the OMaaS methodology and have centric approach to how a CSP can make ordercreated a foundation for delivering and managing management improvements through a review ofCSP order management solutions in a more all work items. Using specially designed IT tools,responsive and cost-effective manner. We use consultants analyze agent order handling anda three-pronged approach, integrating a cross- current business outcomes (e.g., order cancella-competency team of IT, consulting and business tion rates, multiple truck rolls), apply quantitativeprocess outsourcing (BPO) resources to align risk assessments and develop fixes. These factorsbusiness and IT with common goals.Helping a Global CSP Bring Order to Order ManagementA tier-one global CSP is leveraging our OMaaS identified, addressed and implemented quickly.solution to streamline order management and This reduces the time to implement fixes fromgenerate new levels of business performance. weeks or months, to days or weeks (depending on size and complexity).In order to properly position incentives, ourmulti-year agreement focused on aligning IT The process changes enabled by OMaaS areand the business to drive common goals. We profoundly affecting the performance of thewere motivated to improve the process in order order management organization. The initialto increase knowledge worker productivity and impact on the operation is as follows:decrease head count. As part of the OMaaSoffering, we offered flexible pricing. For this • Significantly reduced order cancellation rates, resulting in millions of dollars of revenue gain.particular project, our goals were to: • Automated over 275,000 order exceptions• Drive synergies across IT and the business. within the first three months of deployment.• Align systems and processes toward reducing • Closed three cost centers and reduced the effort of order management. headcount significantly.• Align people by consolidating and partially or • Projected total order management cost fully automating work. savings of 30%.Impact of the OMaaS Process • Rapidly increased automated volumes, replacing manual work requirements (seeOMaaS provides a multifaceted value proposi- Figure 5).tion. Because members of the cross-competencyteam are so closely aligned, solution fixes can beAs Automated Order Management Volumes Rise,Manual Work Requirements Decline Manual Work Volume Automation Volume Volume 0 1 2 3 4 Time (Months)Figure 5 cognizant 20-20 insights 5
  6. 6. are used to identify discrete areas of improve- framework. Work is ongoing to further improve the ment, prioritized by risk attributes. This iterative cost efficiencies, scaling capabilities and market approach allows the consulting team to coordinate benefits delivered by OMaaS. Because of the and gauge impact and results on a daily basis. By managed services approach taken with OMaaS, identifying process-based improvements, the team once order management process enhancements is able to identify remedies are deployed, they are immediately available to By identifying for the root causes of fallout through real-time triage. CSPs with minimal business disruption. process-based Among the improvements we are working on are Solving problems requires those that will improve cloud service delivery. In improvements, careful consideration by our view, CSPs must improve operational perfor- the team is able to experienced consultants who mance by moving order management technologyidentify remedies for understand the client’s pro- to predesigned, global solutions based on cloud cesses in great depth; however, platforms. These new standardized platforms the root causes of some problem fixes are more (regardless of who owns the order management fallout through real- difficult to create. In these application) will deliver faster time to market, time triage. cases, or in parallel with iden- decrease capital expenses, reduce upfront costs tifying potential solutions, the and improve scalability to meet capacity needs team often turns to the CSP’s customer service and business continuity requirements. As a agents, as well as our subject matter experts and result, CSPs can build scale, provide more flexible domain consultants, for insights into these prob- capacity capabilities and support enhanced func- lems and their potential fixes. tionality. As improvement areas are identified, the team Preparing for the Future of drives the requirements and provides recom- Order Management mendations for automating the process. Doing so Given the challenges associated with offering requires a combination of operations and design complex and varied services to customers, CSPs expertise. Once recommendations have been must ensure that they meet appropriate service made, a review panel decides which fixes can be levels. They also must address the business implemented. Potential areas of automation are needs of more frequent and dynamic changes to divided into two components: products and services so that they can support operational and market demands. OMaaS deal • Permanent fixes, which solve the root cause structures can allow for new strategic partners of order fallout. that embrace innovation and produce more • Temporary fixes through scripting, which dynamic support for order management needs. does not address the root cause of the fallout but automates the fix, avoiding manual work. However, implementing new deal structures requires preparation. Bridging the gap between The review panel weighs the cost of manually the business and IT is key to determining the best handling exceptions, as well as the impact on end path to order management maturity and overall users and customers to create the final recom- productivity. CSPs must understand where they mendations for fixes. Although automation does are in the process and follow the steps toward not always resolve all instances of a problem, we order management optimization. They are: target automation success rates of more than 90%. • Stabilize: Solidify the IT infrastructure and minimize the massive amounts of business Evolution of OMaaS operations support work, including manually handled order fallout and other BPO work. OMaaS moves order management solutions beyond support and the streamlining of work • Support: IT systems and business operations activities to a strategic plane. As business models support are in acceptable ranges but could be continue to change, new contractual structures improved through optimized support models and strategic partnerships allow integrated to handle increased volumes of order fallout. business and IT teams to enhance profitability. In addition, OMaaS continues to evolve to provide • Streamline: It is necessary to support more frequent and dynamic changes to products and a more modular technology fabric, containing a services that provide ongoing and continuous multiplicity of solutions within a single, flexible reengineering to ensure quality support. cognizant 20-20 insights 6
  7. 7. These steps will set the foundation for extended mentation of new business models make it criticaloptions and flexibility for customers to develop for CSPs to meet these needs. Order managementthe business models necessary to be successful. operations should create an organization with the business flexibility and technology necessary toKey questions to consider include: realize faster time to market, increase revenues,• Do IT releases bring order flow to a stand- minimize operational expenses and ensure that still? If so, your organization remains in the order management capacity increases faster than stabilization phase. required headcount and other related expenses.• Do you know how to structure your support Our recommendation is that executives take the groups to handle fallout effectively? If not, you following steps: are in the support phase. • Ensure that your order management environ-• Are you concerned about market rollout/ ment is stabilized. expansion and increasing order volume? If so, you are in the streamlining phase. • Identify the business model requirements to support more frequent and dynamic changesSuccessfully moving through these phases of in the environment.order management evolution will position theorganization to better serve existing and future • Streamline your operation and prepare to incorporate a more flexible and commercialcustomers while reducing expenses and delays in order management model.product turn-up. • Adopt an OMaaS business model to maximizeNext Steps the return of your order management process.As new commercial models emerge, executivescan prepare their order management organiza-tion for the future. Market pressures and the frag-Footnotes1 “Verizon Completes Terremark Acquisition,” Verizon press release, April 11, 2011, “CenturyLink to Acquire Savvis for $40 per Share in Cash and Stock Transactions,” CenturyLink press release, April 27, 2011, the AuthorRobert K. Pucci is the Chief Technology Officer for Cognizant’s Communications Business Unit,advising customers on the recommended approach and solutions that provide the needed and desiredbusiness value metrics (TCO, T2M, T2D and reduced Op-Ex) while enabling non-disruptive extensibilityto support future business initiatives and remain competitive. Robert has worked with major indepen-dent software vendors and tools and middleware providers and has identified which providers enableand contribute to true business value for CSPs. He can be reached at cognizant 20-20 insights 7
  8. 8. About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 118,000 employees as of June 30, 2011, Cognizant is a member of theNASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7121 0102 Fax: +91 (0) 44 4209 6060 Email: Email: Email:©­­ Copyright 2011, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.