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Supply Chain Automation: Does Change Have to be

Painful?

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Automating your order-to-cash (O2C) processes will revolutionise the way you run your supply chain. It will allow you to move away from error-laden, repetitive manual procedures towards a consistent process-flow of automation.

When you move away from relying soley on humans to enter data, it allows staff to become customer-facing and create real value.

However, the transition from manual processing to automation requires a change in day-to-day practices, long-established systems, and mind set.

Change doesn’t always go down well. We have found that the transition from manual to automated supply chain processes can be made as easy as possible by:

• understanding why people are fearful of the changes automation may bring, and

• planning the implementation with these hesitations in mind.

Supply Chain Automation: Does Change Have to be Painful?

3Challenging ‘Conventional Wisdom’ on Change

People fear change Do they really? Not necessarily…

If they really did fear all change then no-one would ever go for a promotion, buy a new car, or

book a round-the-world cruise.

People love new things, new experiences and new projects.

People don’t fear change. They fear change being forced on them if they have no say or control.

Everyone responds to change in the

same way Not true. When you’ve tried to implement

anything new or different (even a new venue for the office party) some people love it, some people

hate it with a passion, and everyone else...

Well, what about everyone else?

The ‘everyone else’ is where problems lie because you don’t know what they’re thinking. Unfortunately, even if you do your best to show change is good for the company – and often it

really is beneficial, like order-to-cash automation, for example) – not everyone will come around to

the idea on their own.

Change is transformational

It doesn’t have to be.

In fact, companies that embrace change most successfully have adopted a ‘change culture’

which means they aim to improve on a continual basis.

Change is not really a ‘one hit and we’re done’ kind of thing. It’s constant, evolving, but it should

happen at a pace that is manageable – both from a business perspective and a personal

perspective.

These three themes consistently reappear in change-related literature. But although they seem like common sense, on closer inspection, they can be questioned...

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43 Typical Change ProfilesThere are many ways of grouping employees (the ‘type A’, or the ‘introvert’ or ‘extrovert’, for example) – but for our purposes we’re going to look at change in the workplace and introduce three ‘camps’ people loosely tend to fall into:

The Challenger:They are passionately and vocally

opposed to any change you may make. They are likely to have been at the company for many years – perhaps

even a founding member – and are a mouthpiece for everything that may go

wrong before it happens. They may have influence over other members of staff

and, should you mess up, they’ll gleefully tell anyone who’ll listen.

1The Cheerleader:

They absolutely love the idea of change and will work hard to do anything

they can to make it happen. Like the Challenger, they may be vocal. Unlike the

Challenger, however, the Cheerleader will preach the virtues of change at every

opportunity. A valuable asset for the company, you’ll need Cheerleaders at

every level for maximum effect.

2The Silent Assasins:

Don’t assume that just because people aren’t vocally opposed that

they’re actually on your side. The Silent Assasin will say nothing, but hope

everything will go back to normal once the dust has settled.

You can’t implement successful change unless it’s people-driven, so you can’t

ignore this cohort.

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5Change, Primal Fear and the Loss of Identity

1 https://www.psychologytoday.com/blog/brainsnacks/201203/the-only-5-fears-we-all-share

Ask someone why they fear automation and their first answer is likely to be ‘because I might lose my job, or my team’. However, even if their jobs are secure, the concept of automation can still trigger fear in employees. The reason for this becomes clear when we consider the five basic primal human fears1:

1 Extinction: Fear of death – fear of heights, flying etc.

2Mutilation: Fear of losing part of our body or function (a fear of spiders arises here).

3Loss of Autonomy: Fear of being restricted or immobilised by circumstances beyond our control.

4 Separation: Fear of rejection and not being valued by others.

5Ego-death: Fear of humiliation, shame or diminishing of one’s constructed sense of worthiness.

Unless you work in demolition or construction, fears 1 and 2 (death and mutilation) are not an issue in the workplace. However, fears 3, 4 and 5 are. If faced with uncertainty over job function and responsibility, employees — even senior ones — are going to be suspicious of the unknown and of misunderstood and/or imposed change.

“Nice to meet you. What do you do?”This is a typical opening question when we meet someone new. We, in the western world, like to define people by their occupation. Bearing this in mind, is it any wonder that people tend to push back on change? If the change is likely to result in their own uncertainty about their role, it is a challenge of their very identity. Even if they don’t like their work, at least they know what it is. It defines them, and gives them a sense of who they are.

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Acknowledging that the fear of imposed change

is real is the first step towards removing it. Fear is a barrier to

change; it needs to be acknowledged, not avoided.

7The Biggest Obstacles to ChangeIn 2013, the Katzenbach Center carried out a survey of over 2,200 executives, managers and employees2 to unravel and understand problems with change in the workplace. 70 per cent of Executives have started Digital Supply Chain Transformation3.

The top three barriers to change, according to their findings, are:

‘Change fatigue’When employees feel they are being asked to

make too many changes at once (or when they are undergoing ‘initiative overload’ – as describe by

Bain.com4).

Lack of skill in handling change

48% of respondents claim their companies lack the skill needed for successful,

sustained change.

Method of planning and implementation of change initiatives

Change can stall if there’s too much emphasis from senior management and not enough input from

lower in the ranks.

2 https://www.psychologytoday.com/blog/brainsnacks/201203/the-only-5-fears-we-all-share3 http://www.supplychaindigital.com/supplychainmanagement/4268/70-percent-of-Executives-have-started-Digital-Supply-Chain-Transformation4 http://www.bain.com/publications/articles/managing-initiative-overload.aspx

Understanding these aspects of change equips you with the knowledge to implement change in the right way: a way that will minimise employee stress and get you to where you want to be much more quickly. In the next section we’ll see how to take these concepts and put them into action.

8Step-by-Step Order-to-Cash Automation: This is what we recommend: to ease the pain through change management best practice.

When it comes to change, understanding what people are scared of (and why) will help you make the transformational change from manual transaction processing to order-to-cash automation.

It helps to work with specialists like OmPrompt who have extensive experience in supporting customers to manage this transition. They are accustomed to tailoring an implementation approach to fit each unique business (a change management technique that aids change adoption).

i Learn about: Typical Stages When Adopting Change

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Stage 1: Decision At OmPrompt, we start the automation process from the ‘decision’ to proceed with order-to-cash automation. It’s important to make sure the project is not doomed before it is even announced. There will, no doubt, be a series of interactions involved before a final decision is made such as:

• Meetings

• Impromptu discussions and

• Perhaps even a board-level evaluation or decision.

If this is done with an air of whispered urgency, furtive looks and knowing winks then your employees will think there’s something ‘up’ and steel themselves for bad news.

Our advice is: have meetings, talk openly about it early in the process. Inform them that it will free them up to do the very best bits of their job, and remove manual, repetitive, non-value-added tasks.

Perhaps the most critical point here is that once the decision is final, move on to stage 2 as quickly as humanly possible to prevent rumours getting out of hand.

Three Typical Stages that Organisations go Through When Adopting Change:

i Learn about the next step: Communication

10Stage 2: CommunicationThis is where standard change management information will tell you to keep lines of communication open, tell everyone what’s going on, and make sure people are informed. But, remember point 1 under our conventional wisdom challenges? People fear change being imposed on them – not change itself. You can communicate all you like, but if it’s delivered as a ‘done deal’, it won’t help to allay fears.

Instead, make the focus of your communication to achieve as much buy-in as possible. (Remember, you’re unlikely ever to get 100% buy-in). Don’t just focus on management, try to get everyone on board.

You’ll need to:

• Show the benefits of automation

• Address people’s major concerns (including those about their job security) and

• Allow them to question you.

Remember: buy-in is key. One of the best ways of achieving this is to get your Cheerleaders to help you, especially if they’re not in management positions.

i Learn about the next step: Implementation

11Stage 3: ImplementationMake changes incrementally, but don’t let each action drag on. This will help to prevent ‘change fatigue’ and increase buy-in, as your employees will quickly learn that the new reality is actually much better than what they were doing previously.

“Will I lose my job?”Automating your order-to-cash process

doesn’t mean that people are guaranteed to lose their jobs. However, if your goal is

to reduce head-count, then it can save your business money.

In many cases automation is chosen by a growing company so they don’t have to increase headcount any further. Make sure people understand the impact the change will have of

them personally and reassure them of their job security (if you can). You may even bring a few ‘Challengers’ on side once they realise they are not on the way out. As a result of automating, employees will be able to spend more time interacting with

customers and less time struggling with data entry.

http://v1.aberdeen.com/launch/report/perspective/8735-AI-order-management-automation.asp

28% of leading companies are

currently evaluating options with regards

to cloud-based solutions for their

business processes and 41% currently have some or all of their applications

in the cloud.According to the Aberdeen Group5

5 http://v1.aberdeen.com/launch/report/perspective/8735-AI-order-management-automation.asp

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Did you know that “63% of organisations still rely on manual processes for converting quotes

to orders?

There is still plenty of room for improvement!

According to the Aberdeen Group6

6 http://v1.aberdeen.com/launch/report/perspective/8735-AI-order-management-automation.asp

13Pain-free Order-to-Cash AutomationHere’s a 6-step breakdown of a pain-free order-to-cash automation implementation, the OmPrompt way:

Start with your biggest (typically, your most important) customers

Remember the 80/20 rule? Typically, 80% of revenue comes from 20% of customers. It’s worth

starting with these customers.

Then focus just on one aspect, the logical beginning: processing customer orders. We

can get your biggest customers fully automated within 5 days. Your customers won’t see anything

different, and we don’t need to tie up your IT resources either.

Keep AutomatingBut continue automating customer orders.

By now (less than two weeks after beginning the project) your customer service staff will be

spending a lot less time on mundane order entry. They’ll also notice they’re dealing with far fewer

order errors and delivery discrepancies. Word will get round that this is a good thing.

Allow the dust to settle

Your customer service staff will need time until the new way of working becomes the new ‘normal’. During this time, focus on helping

them go back to ‘grass roots customer service’; cultivating relationships with your customers;

and helping cross-sell or up-sell other products or services.

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OmPrompt’s comprehensive service meant the whole project

was up and running without placing any significant burden

on our IT function.

OmPrompt customer, global FMCG brand

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Build on the successYou now have a customer service department focused on customer service rather than fire-

fighting. You also have data.

Accumulated data on order history and buying behaviour can now be used for the next stage of

the implementation – demand planning and forecasting.

You’ll be able to produce accurate forecasts based on actual data.

Analyse key metricsYou should see fewer order errors and delivery discrepancies. Your on-time in-full (OTIF) metric

should have improved.

Add up the cash saved in transport costs and goodwill payments. It’s good practice to share these numbers with everyone in the company,

and adds to the good feeling about automation.

Don’t Give Into Your Fears!

Add new elements when it makes sense

Once order-to-cash automation has demonstrated that it does bring benefits to your

company – on both a financial and personal level – you can introduce new elements such

as automating PODs, GRNs, returns, claims and remittance advice documents when it’s right for

you.

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Before you’ve actually experienced order-to-cash automation, the very idea of it can seem daunting.

By introducing the concept in the right way, you’ll minimise anxiety among your employees and be in a position to get the benefits of automation a lot sooner. As your faithful partner in automation, OmPrompt can help you achieve this.

Steps 3 - 6 of a pain-free order-to-cash automation implementation the OmPrompt way:

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It has definitely reduced the workload of query

resolution. I think it just helps the team re-focus their attention. Now we spend a lot of time looking at the orders, not just inputting them. Our order input is a lot better and faster

than it used to be.

OmPrompt customer, world-renowned alcoholic beverage producer

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Get buy-inBefore a change happens, it’s worth consulting the team/s involved on their ideas – e.g. about what tools to use or approach to take. Be warned, though, unless you can use their ideas – or at least tell them why they weren’t used, this won’t be successful.

ConsultRather over-communicate than under-communicate, even if the communication is ‘there’s no progress at the moment, we don’t know when there will be’.

Be transparentPeople can see through flimsy pretexts for change. Be as honest as possible for why the change has to take place – and give people reasons for why the change will be a good thing.

ListenBefore, during and after change happens – keep the lines of communication open: truly open. Ideas, suggestions and complaints can be useful – if time is allowed to incorporate these into the change plan.

Provide contextChange for the sake of change is suspicious. Put the change in context and provide information in different formats: visual, written and aural. If possible, give both numerical and emotional reasons for change.

3 typical change profilesThe Challengers, Cheerleaders and the ‘Silent Assasins’ are all important change influencers. Know who they are, what they’re likely to do, and work with them to make change happen.

Under-promise and over-deliverChange is often overblown – both the risks and the rewards. Give people enough hope to see the benefit in the change, without promising unrealistic, or undeliverable, rewards.

Be realisticNot everyone will like or accept change. Some will choose to move on, others will complain about it. Being transparent and consultative will help mitigate the negative gossip – just remember that discussion is an important part of people adapting to the change.

Break it downLarge change may seem overwhelming. Try to break it down into smaller, more digestable chunks to help people adapt bit-by-bit.

Give it timePeople will come around, eventually, and before long, the new way will become the ‘way we do things here’.

10 TIPS to help others embrace change

18About OmPromptAs the pioneer of Customer Automation Management (CAM), OmPrompt helps a growing number of the world’s leading brands eliminate gaps in the order-to-cash process of their supply chain that have traditionally required manual workarounds. OmPrompt has innovative ways of automating repetitive manual work in the customer management cycle, enabling clients to free up resources, manage by exception, remove restrictions, and eliminate risks to their businesses.

Our intelligent, cloud-based solutions are delivered as a service, co-exist with EDI-based solutions, are quick to deploy, easy to extend, and offer fast ROI.

OmPrompt allows you to concentrate on your core business by freeing up the time your staff spends on processing customer transactions. How?

We focus on what we do best: processing your business-critical messages; so you can do more of what you do best!

My team are now involved in tasks such as ensuring that

goods arrive on time and in good condition, proactively calling customers

to advise when a delivery is going to be late,

tracking vehicle availability, and promoting Arla’s products.

OmPrompt customer, Arla, global dairy co-operative

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I have come to the conclusion that whatever the

integration problem, the answer is...

OmPrompt.

OmPrompt customer, internationally-recognised FMCG brand

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Ready to Embrace Automation? (the Easy Way) – Get in Touch Now: Tel: +44 (0)1235 436000

Email: info@omprompt.com

www.omprompt.com

OmPrompt Ltd67 Innovation DriveMilton Park, AbingdonOxfordshire, OX14 4RQUnited Kingdom

+44 (0)1235 436000www.omprompt.cominfo@omprompt.com

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