In companies’ operational business, the main focus is often on the production of the products and services being sold: how the production should be organized in the most streamlined, productive and timely way possible. However, what happens before and after production is also essential. The management of orders and contracts is a node in the process that, if successful, creates a good basis for production and customer deliveries. It also enables consistent action after delivery for after-sales and the customer’s next order.
In competitive industries, efficient order and contract management is not just something that’s nice to have, but a prerequisite for staying ahead of the competition. Particularly as the business grows, many companies are realizing that there is room for improvement in the transfer of information from the bidding stage to production. Manual data transfer is unnecessarily time-consuming and error-prone, especially for more complex products or services.
While many aspects of order and contract management are common to all sectors, the requirements and priorities also vary somewhat from one sector to another. Therefore, when choosing a software solution, you should also pay attention to whether the solution supports the requirements of your industry.
In manufacturing, for example, the emphasis is often on a smooth transition from the bidding and ordering phase to production, as companies in the sector themselves produce either the units to be supplied or their components. Often the design is also an important part of the overall work, and in some cases the design work may also be covered by a separate contract. In the manufacturing industry, attention is often focused on breaking down an order into individual items, and work can be streamlined by, for example, a convenient data transfer from CAD directly into the ERP system. It is essential that, for example, measurement data and other information affecting the manufacturing process is correctly passed on in the process.
Compared to the manufacturing industry, companies that focus on renovation and refurbishment often move more straightforwardly from design to procurement and delivery. Orders often include both products and services, with an emphasis on things like installation and other manpower. That’s why it’s particularly important to manage the resourcing process smoothly once the order is ready for delivery. It is also noteworthy that, for example, information related to the site and logistics requirements is mainly created during the bidding process.
Direct sales organizations, on the other hand, are largely focused on procurement and customer deliveries. Items can be products, services, or a combination of the two. Consumers often form a significant part of the customer base for this type of business, where an effective software solution can provide additional support for smooth and consistent customer communication and work management functions, among others. The flexible system also allows orders to be delivered directly to the end customer’s address, so they do not have to go through the company’s warehouse.
Order and contract management is an important node
Thinking of customer relationships and customer orders as a chronologically progressive process from a data management perspective, the starting point is usually when a new customer relationship is opened in the system, and information about the customer’s basic needs are added. For example, you may cross paths with a new customer through an online form, a bidding request, or other means of communication. The next step is to prepare a bid for the delivery requested by the customer.
For a customer delivery to be successful as agreed, the information recorded on the order must be correct and be able to move from one step to the next in the same, consistent format throughout the delivery process.
As the bid progresses as desired to the confirmation of the order, the technical aspects of the contract also become relevant: what exactly has been promised to be delivered, when, where, at what price, and under what conditions? These issues are mainly already considered when the bid is prepared, but there is often a review process in between to ensure that the delivery process is successful in the required way. At the ordering stage at the latest, the final product must be broken down into items to be purchased or manufactured, and precise schedules must be ensured to determine the delivery date. Order processing is therefore an important step in setting the stage for an efficient and successful delivery.
In other words – progressing from preliminary discussions and sometimes meandering bid discussions to the ordering and contracting stage, the process moves from design to implementation. An order is effectively a contract between a customer and a supplier, setting out the exact terms of delivery. Therefore, the management of orders and contracts is a node in the whole process that requires a high level of accuracy from the supplier.
For a customer delivery to be successful as agreed, the information recorded on the order must be correct and be able to move from one step to the next in the same, consistent format throughout the delivery process. That’s why many companies are choosing to invest in a comprehensive ERP system that allows them to manage all their operations in one common system. At its simplest, the offer, the order and the contract are effectively the same object, whose status is simply changed as the process progresses.
Optimally, order and contract management create a good basis for all subsequent work, such as procurement, production planning, production, delivery, billing, after-sales – and also for the customer’s following orders.
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