Order Management: Set for Growth?

As LoB managers gain influence in buy decision, distributed order management projects to see funding boosts — Yankee

Boston — April 28, 2003 — Despite lowered information technology spending, distributed order management (DOM) projects are likely to see boosts in funding as line-of-business managers becoming increasingly influential in their companies' funding decisions for these initiatives, according to a new study from IT consultancy Yankee Group.

In its report, "Enterprise Strategies for Reconciling Inter- and Intra-Enterprise Distributed Order Management," Yankee asserted that in the next couple years companies will allot an increasing amount of their IT budgets to DOM projects, including custom coding and development work, integration projects and packaged software implementations.

Effectively managing orders is integral to delivering customer satisfaction and generating revenue, key results for the line-of-business managers that will be pushing for systems to improve order management, according to the consultancy.

"The current economic environment has changed the DOM decision-maker or influencer," said Kosin Huang, Yankee Group's business applications and commerce senior analyst.

Huang explained that chief information and technology officers are no longer driving DOM technology purchases and that those decisions now rest largely with line-of-business managers. Why the change? Yankee argued that, while CIOs and CTOs need to document return on investment and time-to-value for IT purchases, business managers have other priorities that drive their thinking on technology investments.

"Line-of-business managers document cost savings, such as decreased order cycle times, and are the key influencers driving DOM technology projects," Huang concluded.

The Yankee Group maintained that this purchasing shift would help increase the speed with which DOM achieves mass adoption. Most companies today still do not have a clear strategy for addressing DOM, the consultancy believes. With increased attention on DOM as a revenue driver for delivering customer satisfaction, more packaged software providers will address it sooner rather than later.

However, Yankee projected this turning point to be one to two years out, with technology developments in the DOM architecture the critical indicator of future success.

"DOM projects will become more important as emerging business models — especially virtual manufacturing companies — assemble technology to meet their need for a flexible supply- and demand-chain backbone," said Huang.

For more information on order/demand capture and demand management, see the Global Enabled Supply and Demand Chain Map Series articles "Order Management" and "Demand Management" in the September 2001 and December 2002/January 2003 issues, respectively, of iSource Business.