Manufacturing companies are capable of much greater financial gains than they are getting today from their quote-to-order, order-to-cash, sales and product configuration strategies. These process areas center on how manufacturers create, set and keep expectations in their quotes for custom-configured products.
Globally companies are adopting quote-to-order to streamline how they sell customized products.
Getting results from these strategies has to start with defining financial measures of performance before changing these processes ever begins. Too often companies aren’t measuring the financial impact of these strategies—and leaving much of the cost savings and incremental revenue unattained—because extra steps on these strategies are not taken. These strategies have to start with a series of financial metrics if they are ever going to accurately reflect the cost savings and revenue contributions they contribute.
Both AMR Research and Cincom are finding that when benchmarks for financial performance are defined before manufacturers initiate a quote-to-order strategy, results comparable to those shown below are achievable. The extent of manual to electronic automation of core processes made an impact on these figures shown in the table below.
Financial Performance of Quote-to-Order Strategies in Year One of Projects
|Manufacturers||Order Cycle Time Reduction||Days Sales Outstanding Reduction||Quote Creation Time Savings||Reduction Incorrect Orders||Increase in Cross-Sell, Up-Sell with Quotes|
|PCs and servers||52%||22%||150%||54%||47%|
|Industrial distributor (channel assembly)||12%||21%||67%||31%||23%|
There is more to quote-to-order, order-to-cash, guided selling and product-configuration strategies than just organizing the workflow. To get the true financial benefits of these strategies, you need to first look at the financial measures of performance that you want to impact. Metrics are just the foundation of what needs to be a much broader and more comprehensive listing of the financial measures of performance that are relevant to your specific business.
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