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How to Increase Revenue and Profitability with IBM Sterling Order Management

Customer-centricity is the heart of every successful retailer. But as customers’ expectations quickly evolve, retailers are challenged with increasing sales and getting products out the door as soon as possible – sometimes foregoing profitability and efficiency.
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Customer-centricity is the heart of every successful retailer. But as customers’ expectations quickly evolve, retailers are challenged with increasing sales and getting products out the door as soon as possible – sometimes foregoing profitability and efficiency. As a result, a strategy initially designed to put the customer first can often lead to over-promising and result in disappointed shoppers facing late deliveries or canceled orders. Fortunately, it is possible to make promises that are reliable and profitable. And there’s no time to waste.

Increase Omnichannel Revenue and Profitability

As shopper expectations rise and omnichannel becomes increasingly complex, retailers need to optimize fulfillment at scale[i] – across thousands of fulfillment permutations in milliseconds. Advanced analytics and Artificial Intelligence (AI) are essential to driving multi-objective optimization against configured business goals. Detailed “decision explainers” ensure that business users trust the recommendations, driving continuous learning and improving adoption. With this foundation in place, start making promises you can keep while improving sales and profitability.

Early in the customer journey, prioritize business objectives like profitability and customer satisfaction while considering different fulfillment factors (distance, costs, capacity, schedules, special handling requirements) so you can determine the lowest cost for each customer in seconds. For increased accuracy, utilize aggregated data from carriers like shipping rates, transit times, and even cross-border fees. Post-purchase, optimize cost-to-serve by combining shipping costs directly from carrier management providers and capacity across locations and resource pools, with predefined rules and business drivers. Use AI capabilities to predict sell-through patterns and forecast demand based on seasonality, reducing stockouts and markdowns to maximize revenue and improve margins.

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Potential Financial Impact of IBM Sterling Order Management

Organizations need modern solutions that bring together real-time inventory visibility and advanced fulfillment logic to balance profitability and customer experience. Forrester Consulting conducted a Total Economic Impact study[ii] to provide a framework to evaluate the potential financial impact of IBM Sterling Order Management on their organizations. Forrester interviewed several customers with experience using Sterling Order Management, and customers identified the following quantified benefits:

  • New profit from improved order management
  • Savings from improved operations
  • Avoided costs of previous order management solutions

1. 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.”

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2. 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 can be 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 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 critical 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 in fulfillment, that information is passed back for reference on future orders.

3. 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.

The table below summarizes the internal efficiencies that the interviewed organizations experienced with IBM Sterling Order Management.

To find out more about IBM Sterling Order Management Solutions, read the blog, “How to Enhance your Customer’s Experience from Discovery to Delivery”

[i] IBM Blog, Sophisticated Inventory Promising: Your Superpower for Next-Generation Omnichannel Experiences, 2021

[ii] A Forrester Report Total Economic Impact™ Study Commissioned by IBM, 2020