OMS, "Disconnection Debt" & the "Toggle Tax"
Matt Boland
Director / IC, Global OMS Sales | B2B / B2C Digital Supply Chain Transformation Leader
My colleague, Chris Maynard, VP of Services here at K?rber Supply Chain forwarded this fantastic article by the Harvard Business Review to me.?
The article, “What’s Lost When Data Systems Don’t Communicate” by Rohan Narayana Murty, Sandeep Dadlani, Rajath B. Das, and Nikhil Mehta, discusses the many challenges organizations face when there are multiple siloed systems that do not communicate. The authors call this very real phenomena “disconnection debt”.?
Compounding incrementally on disconnection debt is when there are numerous systems within the same organizational discipline or function that are dependent on one another to complete tasks that do not communicate systemically. Moving in between these systems increases worker frustration and error frequency. They call this the “toggling tax”.
Coming from my background, the immediate thought revolved around the supply chain and how solutions I offer may rectify disconnection debt.
Reading on, I kept thinking to myself, that it is not enough simply to connect the systems to share data; you must do it in a way that provides a single version of the truth, and even better if these connections can apply application logic to leverage the value of the shared data.
Approximately halfway through the article, a table (Figure 1) outlines the functional areas we were thinking about.? (Chris and I immediately removed those Functional Areas that we viewed an OMS having limited (or zero) impact on …. And Human Resources is not our bailiwick.)? That left us with 9 of the 13 functional areas shown here:
Follow the link to Table 1
Our goal was clear - are we able to answer this answer this question: How many of these functional areas can we impact (or remove) and how much disconnection debt can we eliminate through connectivity, providing a single source of truth to the business and what value and margin can we deliver by applying business logic to the nine (9) remaining functional areas? ?And can we do it with a single application?
Our Approach?
The HBR article does an outstanding job discussing what can be gained by connecting systems and decreasing (or eliminating) “disconnection debt.”? Extending the conversation, I did ask myself:
“What additional gains might be realized by using the right kind of application / tool, to not only connect the systems, but at the same time to add business logic when and where appropriate and to provide a single place (e.g., UI, Dashboard) ?to go for the answers you need to satisfy inquiries made by both the business and its customers. ?Being Order Management experts, subject matter experts (SMEs) and evangelists, the case is clear that with an /our (K?rber) order management system, we could address three (3) imperatives we set for our Elimination of Disconnection Debt vs the specific challenge (Connectivity) discussed by the authors.
Mutual Goal (Authors and K?rber)?
Additional Goals to Create Business Value?
Chris and I embarked on a journey to unpack these imperatives further and apply them to each one of the 9 different function areas outlined in the table within the article.
We purposefully excluded the “Function - Human Resources” for “11- Employee Onboarding” and “13 - Training” as the realized savings from our approach is Order & Supply Chain areas and the HBR paper speaks to the broader enterprise. ?We recognize that the solution and approach outlined in our paper provide significant savings in the cost onboarding and training in business function areas.
As a bonus, we want to provide a bulleted list of the types of business logic that might be applied in the functional areas with an OMS that will allow for extension of value with increased connectivity, systemic decision making and automated processes.
Let’s first cover the two (2) aspects of our challenge that are addressed universally by the K?rber Order Management System:?
Chapter 1 – Connectivity and “Disconnection Debt”
OMS implementations by their very nature are connectivity / integration projects that tie together many solutions. And integration projects, require an integration layer that incorporates an integration tool providing standardization.
Most OMS tools on the market require a separate purchase of an integration layer, like a Mulesoft, Celigo or any of the other various Integration Platforms in the market. These tools are used to create a seamless environment and deliver the extensibility required for an OMS initiative; this, in turn, means additional cost and skill sets to garner success. K?rber provides a “one stop shop” for messaging (EDI, etc.), Connectivity (Integration Platform as a Service (iPaas), Business Logic & UI (OMS) to deliver a unified and comprehensive system solution.?
We are not just integrating systems and sharing data, we are doing it with an expert eye on the business and the actual business processes practiced by the organization as well as commitments to and expectation of its clients. Therefore, the actual connectivity you are enabling drives business benefits above and beyond just the connectivity.
Asking not only:
“…what information do you need?” but also…?
“…why do you need it?”, and…?
“…how is it used in the flow of an order lifecycle?”, as well as?
“…when is this data expected in relations to customer commitments?” and...?
“…what happens when you do not get it or have it?”.?
In the case of our OMS, the K?rber application’s proprietary iPaaS (integration layer) provides over 1,500 APIs in its library and new microservices released weekly; there is no integration that cannot be managed with expertise.
Typical integration in an OMS project encompasses so many functional areas that the crossover benefit is exponential. In fact, many hidden benefits of an OMS implementation are uncovered as the flow of an order and the systems impacted through the journey are discussed and analyzed.
By analyzing the order flow, you are also prioritizing your integration list as the top down most important integration for the internal constituents and the external clients. Here are a “Baker’s Dozen” (13) of the typical integrated systems in an OMS project, include but are not limited to, are:
As you can see, these thirteen (13) outline the various systems and applications that any company’s order process is likely to cross on its end-to-end lifecycle.?
It is well-known that system integration is done for the purpose of taking different subsystems or applications and creating one comprehensive system. By leveraging an OMS application that is built on the principles of integration, your project of connectivity kills three (3) birds with one stone which are:???
?
Ensuring they work together efficiently and effectively is critical and simply passing data (#1) in a Connectivity & Integration project alone, without addressing #2 and #3, will not drive the exponential value that can be derived from a slightly broader project.
Whether you are integrating software systems, external 3rd party solutions, or a combination of both, there are many best practices to follow and partnering with a vendor like, K?rber Supply Chain, skilled in all manner of these creates the optimal solution.?
Chapter 2 - Single Face UI & Single Truth to the Users (internal and external)
One might argue that answering this question is the first step in any integration project:
“Once all these systems are integrated, which one system will be the “Command Center” for all the data?”
Although most OMS applications can run in a “headless” manner (i.e., no user engagement at all), very few companies choose this option, why:?
The OMS application’s UI creates a single version of the truth for all user types…?
…by providing a unified and structured user experience that is extensible throughout all participants to your distributed (sometimes global) Order & Supply Chain network.
Chapter 2 continues by exploring how Connectivity, Extensibility and Data Integrity across the Table of Functional Areas now drive value and benefit (and resulting productivity) throughout the distributed supply chain and its participants via a common UI, a single face to the participants and a single version of the truth.
A single version of the truth impacts three (3) disciplines that cross the highlighted functional areas. The disciplines are:
The systems, now combined by a single application, deliver consistency across the enterprise through a united framework of integration. Data that might have been shared across solutions -- and therefore subject to augmentation-- is now contained with a single point for user’s activities such as performing tasks to developing strategies based upon data for the Executive level.
Within this solution exists the opportunity to standardize workflows that not only provide “goal posts” for both general and unique business processes, but also enables automation that might have been many manual tasks. This is where the business logic (Chapter 3) comes into play. Workflows provide systemically configured order processes that allow the enterprise to engineer customer expectations and promises (typical in the B2C world) to the level of granularity written into an individual client’s Service Level Agreement ((SLA) – commonplace in the world of B2B).
A bonus of these connected systems is the consistency of the data that is gathered and delivered in “real-time” through the user interface for the purposes of Reporting and Analytics. Analytics that deliver current state information - not a day late historical data and not information that needs to be gathered by toggling across multiple systems.
And now, the ELEPHANT in the room…INVENTORY. There is no other great unifier existing today for the challenge of inventory visibility than an OMS. Integration into a global, distributed network of inventory nodes is the prime driver for a connectivity (integration) project that includes OMS.
Inventory in the world of ERP must be “owned” buy the business, within it four (4) walls and represented in its accounting system. This inventory is not available if it is not owned…why, because ERP is design to manage the enterprise and not the extended enterprise and that make OMS a requirement for today’s distributed and extended global commerce reality.
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Without a unified, single view of Inventory, you are locked into the hunting and pecking world of the “toggle tax”.? Inventory is my bet for what makes up the largest contributor to the “toggle tax”.? Trying to find available inventory across participants and nodes is a huge time waster for individuals trying to use disconnected systems. And at the end of the day, these same people waste additional hours on the telephone as well… we hear about it every day.
Inventory visibility and accessibility is the way of business today and the extensibility of OMS allows businesses to understand their global inventory position (and its supply / demand relationship) regardless of who owns it or where it is:?
Or its current state:
Is this a daunting task…yes; however, that is why it is mission critical to not try to be successful by asking systems that are not purpose built to perform these tasks. OMS is purpose built with extensibility for an extended supply chain (commerce world) in mind.
This means that for some specific users, the INVENTORY UI page sits on a separate monitor on their desk and runs ALL DAY LONG. MISSION CRITICAL.?
2. Usability & Self Service - Command Center / Portals?
This benefit of connected systems deliver through a single application UI framework is exceptional direct in its value statement.
Organizations reduce onboarding and training time for both internal employees and external suppliers / partners by delivering a “single” access point for participants to conduct their business. Furthermore, defining access and the look, feel and data delivered through the UI can be role based and configured by you to focus on the data required to perform the job and eliminate the noise and distraction of data not in the user purview. This great unifier is the antidote for the parasite “toggle tax” that spreads throughout organizations today.
If you are a veteran of the commerce and supply chain space like Chris and me, you know that more and more niche software providers appear on the scene every day.? These solutions may in fact impact the supply chain and are often time sold to an individual. Organizations get new tools every day…it is important to assess their value to the business and their impact on the order lifecycle and the supply chain. If it has universal value, it will be important to connect / unify its data to the OMS and not look to roll it out to user and create another “tax” on the enterprise.
The OMS has become the Command Center for Order Lifecycle, Inventory State, Real-Time Information & Communication.
The final big value to the organization is to reduce cost and labor by pushing this same data out to Customers and Suppliers, whether that be through Customer Self-Service Portal or a Supplier / Partner Portal.? In today’s information-rich world Self-Service in “must have” aspect of your Commerce and Supply Chain strategy.
With that in mind, Customer and Suppliers / Partners use portals for as many different reasons as they do the same.? Looking at Customers first, connected systems can help customers build a dependency on Self-Service when you are delivering the right data and experience to them. And each element of Self-Service has a quantifiable value.
Successful partnerships with clients require collaboration, and collaboration is only as good as the data available. Sharing data reinforces that collaboration and encourages teamwork. In turn, teamwork and collaboration serves to resolve disputes and the time it takes to do so. When looking at the same data, that single version of the truth, teams are able eliminate the need to schedule and engage in multiple “face-to-face” negotiations that all too frequently escalates.??
1. Customer Portal
Let’s look at both imperative and “nice-to-have” strategies for Self-Service that OMS delivers at the Customer level.
The core elements of a customer self-service system typically include these “Must Have, Real-Time” features:
?2. Supplier Portal
How is this the same / or different in the Supplier / Partner World? It is important to understand that the above “Customer Self-Service” list applies to this group as well, though the definition can vary.
It is also important to understand that there are many capabilities you can add to a Portal that is outside of the scope of our focus for this analysis. For this, we are going to focus on those with relevancy to execution, supply chain and order systems and list out some of the others.
3. Customer Service & Exception Handling - Call Center
The last discipline for the effective use of connected systems and integrated data is the Customer Service & Exception Handling. The champion of “single version of the truth” and enemy of the “toggle tax” is collected via the connected systems of the OMS and deliver via the UI framework of the Call Center.
The OMS charter for Customer Care success is in its ability to provide rapid resolution of issues, deliver a single version of the truth through access to information, reduce time spent searching for data, grow with the business and become a revenue channel.
Customer Care is one of the top examples of the value creation for connecting disconnected system with an OMS.
Eliminate the TOGGLE TAX: Customer Care in business is notorious for having to switch between multiple applications, with different UIs for find data that you can never be sure is “real-time.”? By connecting all of the systems that participate in the order lifecycle and collecting all the data along the way, the OMS is able to deliver the customer data to a single interface, reducing (perhaps eliminating) the need to toggle between applications.
Manage Exceptions / Resolve Issues: the very nature of an OMS allows for the creation of unlimited workflow types. This reduces errors and rogue processes through the publication of specific resolution workflows (journeys). Workflows map the process that quickly solve problems, create refunds and appeasements, activate returns, manage expectations and improved customer satisfaction. Access to relevant customer data, such as order history, account details, or call history logs, etc. fed to them through the OMS promotes a first call resolution motion saving time, money and increasing scale.
Improved Engagement & Sales Channel: With all the data and history at the fingertips of Customer Care Representative, more specific engagement and support can be delivered. A more personal approach breeds familiarity with the client and serves to increase retention and loyalty. That loyalty, familiarity and access to customer data creates a “trusted advisor” relationship between client and representative whereas the representative can leverage likes, dislikes and history in order to uncover cross sell / up sell opportunities and incorporate B2B and B2C “save the sale” strategies when products are not available.
Benefits to the Business
Onboarding: Training new representatives on a single system vs training on multiple systems.
Consistency and Accuracy: Integrating data from multiple systems with an OMS ensures the SINGLE VERSION OF THE TRUTH through data consistency and accuracy and lessens the risk errors and discrepancies from data entered manually or out of synch with demands for information in real-time.
Analytics and Reporting: OMS means ad-hoc reporting and analytics are easier to produce.
Customer Satisfaction: Extensibility that drives connectivity promotes First Call Resolution because you have all the data you need and workflows to execute quickly means satisfied, loyal and REPEAT customers.
Cost Savings: All the above delivers a meaningful ROI.
Launching an integrated Customer Care module native to an OMS, like with the K?rber solution, means data is also current and when business logic is applied to the supply chain and order lifecycle, you are adding Red Bull to your coffee.?
It is time to discuss the value of the Business Logic layer as the connective tissue between your iPaaS, your OMS, your Supply Chain, and your Strategy.
Chapter 3 - Impact of Applying Business Logic
This chapter is the “jewel on the crown” for using an OMS to solve the impacts experienced when tackling the issues attributed to disconnected systems and the aligned functional areas.
Up to now, the focus has been moving data via connected systems. To understand this movement, we adopted the adage:
“Nothing happens until someone sells something.”?
– Henry Ford
Therefore, the Order Lifecycle was the most logical framework to follow the flow of information and data across systems.
The next thing we did was to consolidate all this shared information into a single user interface that would all but eliminate “toggle tax” that is still a universal problem for companies today.
Admittedly, these two areas are quite static and when completed, the incremental gains can be realized.
What tips the scale in the favor of utilizing an OMS as the technology for connecting systems is that now you can begin layering into the lifecycle the business logic and best practices that run the business. Here is where exponential gains and continuous improvement begins to reduce operating costs, increase margins, and improve utilization of inventory. The business logic moves orders from stage to stage capturing and reporting on statuses along the way and at the same time, flagging orders at risk of not making customer commitment. Orders in the proper flow are untouched, while orders at risk are flagged and treated as exceptions. The business logic is not only tied to how you operate but can be configured as an individual end-to-end business process for a single customer.
The configurability of the system also allows for network pivots in the case of emergency or to quickly incorporate a strategy that may last only a week, a day, or an hour.??
At this point you have read a great deal, thank you for your attention. We thought is best to incorporate a bulleted list of the types of business logic that might be applied in the functional areas with an OMS. that will allow for extension of value with increased connectivity, systemic decision making and automated processes.
Follow the link to Table 2
In Conclusion
Not all OMS applications are created equal. In fact, there are a lot of “paper tigers” out there, so tread carefully and work with a reputable consulting firm or systems integrator (maybe two (2)) to help you narrow the field.? Be sure to understand their proclivities when it comes to recommendations and ask why and why not regarding them.
Though Chapter 3 is the final chapter, it is still the penultimate chapter from the standpoint of your success…the final chapter is doing it!!
For that, you need to work with K?rber Supply Chain Software and our Partner Network.
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Director / IC, Global OMS Sales | B2B / B2C Digital Supply Chain Transformation Leader
1 年Very proud to have one of the authors of the original, referenced Harvard Business Review article like and support this follow-up article.
Senior Partner Manager
1 年Matt, in world of snippets, snapshots, and memes this is a refreshing deep dive into a complex issue. Nicely done, Matt. good things to think about.
Director / IC, Global OMS Sales | B2B / B2C Digital Supply Chain Transformation Leader
1 年Thank you for sharing the article Richard and Guy! I appreciate it!
Sales & Partner Sales Expert | Founder | Author | Innovator | Strategist | CSO | Mentor | I help revenue leaders deliver phenomenal sales results!
1 年Well done! Great explanations and very well thought out!!
Really strong case for the ROI calculation of a connected ecosystem. As you point out in your third chapter, the downstream impact of this connectedness (the "disconnection debt"), and of reducing the UX friction (the "toggle tax") is where you get find exponential value. This is where you get to innovate and bring something newer/better/faster to your customers and your suppliers. Integration is hard. Having been in the system integrators seat many times, I understand their focus on their engagements with their clients being so focused on completing the first step - solving the disconnection problem. You make a strong case, Matt Boland: don't stop at shoring up the foundation of your business; exponential returns are created when you can innovate on top of your connected enterprise.