May 04, 2020
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A Guide for Customer Fulfillment in Times of Disruption
Contributor: Sarah Hippold
Customer fulfillment leaders must be prepared to lead through all kinds of turns. Focus on three areas to be ready for any disruption: Strategy, costs and talent.
Circumstances often force business leaders to make decisions with incomplete information. CEOs make decisions with the information available at the time. Data and analytics leaders work with partial data to drive business value. Customer fulfillment leaders decide how to deliver consistent service excellence as they adapt to increasing changes in customer expectations.
“ Well-developed partnerships come with improvements in service, costs, cash and sustainability. There is no better foundation when exiting a turn”
This is a challenge for customer fulfillment leaders at any time. But these decisions become increasingly challenging during times of disruption or a “turn.” Recessions, trade disputes and new regulations can all mark the start of a turn that comes with its own set of challenges.
“Turns happen — there’s nothing you can do about it,” says Beth Coppinger, Senior Director Analyst, Gartner. “What you can do is foresee the turn and prepare to exit it with maximum speed before your competitors do. This is what Gartner calls ‘winning in the turns.’”
Read more: Act Now to Fund Innovation and Growth
The goal can’t be to just survive the turn. Instead, organizations should, like a speed skater going into a sharp turn, use the turn to gain momentum and stability. Customer fulfillment leaders must push their teams now to ensure they are prepared later.
Strategy
To identify turns, leaders must have a deep understanding of customer behaviors, wants and needs. They must define strategies for how to listen and respond to varying customer needs. At a tactical level, cash flow issues and changes in order patterns are good indicators that a turn might be on the horizon. The order-to-cash team is often the first to notice those kinds of changes and can act as the canary in the coal mine — provided they have the necessary analytics and reporting tools.
More advanced companies can expand the scope of customer fulfillment beyond transactions and partner with their customers to deliver joint value creations.
Segment the customer base and identify which customers are the most valuable partners. This knowledge is critical during turns when companies face pressure to reduce costs.
“Top customer partnerships are a resource of value creation and innovation worth protecting,” says Coppinger. “Well-developed partnerships come with improvements in service, costs, cash and sustainability. There is no better foundation when exiting a turn.”
Cost
During turns, companies often stop discretionary spending, lay off staff, reduce training and cut capital investment. Organizations that aim to win in the turns, however, think long term and forecast for the upturn. These companies have ongoing cost management discipline and practice cost optimization as opposed to cost cutting.
One of the most effective ways that organizations can approach cost optimization in customer fulfillment is to optimize the order-to-cash process and migrate from an isolated functional approach to a cross-functional, process-driven approach. One key goal is the pursuit of zero-touch orders where no manual adjustment is required to fulfill the order. Costs and order cycle times decrease, cash flow improves and, most importantly, resources are freed to provide value-added services to customers.
Read more: 4 Factors That Will Impact the Future Supply Chain
Reliable master data management is crucial to effectively reduce manual intervention. Otherwise, false or insufficient data will always require manual adjustments. Data accuracy has to be paramount.
Talent
Migrating the organization from a product-centric to a customer-centric approach requires changes in culture, organization design and talent. It’s very easy for companies to only focus on cutting costs and mitigating risks during a turn. Ironically, this behavior increases risk if it fails to recognize changing behaviors and trends in the market. To adapt to new circumstances, new talent must be hired and existing staff must be trained.
Modern customer fulfillment requires leadership that fosters collaboration and drives a deep understanding of customer behaviors and needs. This is essential to implement advanced techniques such as zero-touch orders and to build strong partnerships with selected key customers.
“ Ramp up digital dexterity — the cognitive ability and social practice needed to leverage and employ various types of media, information and technology”
On the technological side, customer fulfillment is becoming more automated and augmented. Employees need to understand the benefits of and learn to work with new technologies such as robotic process automation (RPA), chatbots and artificial intelligence (AI).
New digital technologies require leaders to ramp up digital dexterity — the cognitive ability and social practice needed to leverage and employ various types of media, information and technology. This means targeted recruitment and improved training and mentoring.
Learn more: Building an Agile Supply Chain
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Recommended resources for Gartner clients*:
Winning in the Turns: Supply Chain Customer Fulfillment Action Guide — Focus on Shifting Needs, Cost Optimization by Beth Coppinger.
*Note that some documents may not be available to all Gartner clients.