Cost Savings And Business Benefits Enabled By Salesforce Order Management
The objective of this study was identify the cost, benefit, flexibility, and risk factors that affect the investment decision using a multistep approach to evaluate the impact that Salesforce Order Management can have on an organization.
Today’s consumers have massive expectations for their shopping experiences. The pandemic-fueled increase of in-home deliveries and the adoption of click-and-collect options suddenly made customer-facing inventory transparency a necessity. Retailers can leverage operational technologies, including order management systems (OMS) that support distributed order management, enterprise-level inventory visibility, customer service, and store fulfillment to deliver on the experiences that customer crave.
Retail Roles Impacted (Revenue)
SVP of e-Commerce and Marketing ($1.5 billion)
Director of Digital Transformation ($1 billion)
Director of Technology Beauty ($460 million)
VP of Engineering Health and Wellness ($250 million)
CIO and Digital Officer (€150 million)
Chief Digital Officer of Sporting Goods ($200 million)
General Manager, Jewelry (€40 million)
Salesforce Order Management enables retailers to streamline and manage the order lifecycle. Salesforce Order Management brings together powerful tools to manage, fulfill, and service orders, providing a single view of order and service history to deliver a seamless, omnichannel commerce experience for customers.
Salesforce commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Salesforce Order Management. 2 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Salesforce Order Management on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed seven representatives across several retail verticals with experience using Salesforce Order Management. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global retail organization with 100 store locations, 1,000 employees, and revenues of $250 million per year.
Prior to using Salesforce Order Management, the interviewees noted their organizations lacked sophisticated order management capabilities and relied on homegrown legacy order management solutions to support activities, including order capture, shipping and fulfillment, payment processing, and customer service. This approach left them with a lack of visibility into order status, inventory orchestration challenges, and high costs to maintain and update existing solutions. These limitations led to customer service inefficiencies, lost revenue opportunities, high IT costs, and an inability to meet customer demands for omnichannel fulfillment.
After the investment in Salesforce Order Management, the interviewees streamlined and matured their approach to order management with a solution that provided a unified view of order history and accurate inventory data plus tools to manage the order lifecycle. Key results from the investment included customer service efficiencies, lower IT costs, and incremental revenue from omnichannel fulfillment.
Quantified Benefits of Salesforce Order Management
- Over $228,700 in customer service efficiency gains through lower case volume, higher first call resolution (FCR) rates, and decreased call handling time. Salesforce Order Management enables customers to self-serve and access order information, often alleviating their need to contact customer support, reducing contact volume by 10%. With Salesforce Order Management, service agents gain a comprehensive view of order and inventory data and are better equipped to handle customer requests, improving first call resolution by up to 20 percentage points and reducing call handling time by 25%. Over three years, increased customer service efficiency is worth over $228,700 to the composite organization.
- A 75% reduction in development time for new order management capabilities. By moving away from a heavily customized, on-premises, and homegrown order management solution, the composite organization utilizes prebuilt APIs and out-of-the-box (OOTB) features, reallocating two developer resources that are previously tasked with systems maintenance and reducing the time and cost to develop new capabilities. Over three years, the IT savings total over $1.1 million.
- Over $690,000 in incremental profit from omnichannel fulfillment. The composite organization gains visibility into inventory across its store locations, fulfillment centers, and warehouses, and gains the order orchestration capabilities necessary to offer fulfillment options, such as “buy online, pick up in-store” and curbside pickup, to customers. Upon pickup, 25% of click-and-collect customers make an additional in-store purchase. The incremental profit the cross-channel purchases drives are worth more than $690,000 to the composite organization over three years.
“Investing in Salesforce Order Management mitigated the risk of having a homegrown system that was bursting at the seams. It removed the risk of depending on our developers [for maintenance] … It’s also scalable, so we are mitigating that risk as well.”
Director of Technology of a Beauty Retailer
Supplemental Benefits
- Improved returns process.
- Reduced safety stock reliance through real-time inventory information.
- Reduced IT burden because customer service agents and other staff can create their own dashboards.
- Improved customer experiences and retention.
- Transportation cost savings.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- Salesforce licensing costs. Over three years, the composite incurs $675,000 in Salesforce Order Management transaction fees based on the volume of orders processed through the system.
- Implementation and professional services costs. Developers, a project manager, and a business resource work on the six-month implementation alongside a systems integrator. Over three years, implementation costs $371,700 for the composite organization.
- Training and ongoing management costs. A Salesforce administrator dedicates 30% of their time to ongoing maintenance of the system. The composite organization also retains a third-party professional services firm to support ongoing maintenance. The organization’s customer service agents receive training on how to use the system. Over three years, the training and ongoing management costs add up to $111,700.
What You Should Know
The representative interviews and financial analysis found that a composite organization experiences benefits of $2.03 million over three years versus costs of $1.16 million, adding up to a net present value (NPV) of $876,000 and an ROI of 76%.
“The capability to enable omnichannel journeys impacts revenue. The transparency towards the consumer and the ability to track the status of an order improves our responsiveness and improves the customer experience.”
CIO and Digital Officer of Office Supplies Retailer
New Customer Mandates Drive OMS Market Growth
Order management has a huge impact on customer experience. Forrester’s 2022 Order Management System Global Market Forecast finds that business investments to meet soaring customer expectations for excellent experiences drive OMS market growth, because:
- Customer expectations for stellar experiences are surging. For example, Forrester’s September 2021 Consumer Energy Index and Retail Pulse Survey shows that 65% of US online adults and 63% of UK online adults think it’s important to have in-store product availability on their website.4 Shopper expectations require an OMS that is responsive, agile, and in the cloud to serve today’s customer needs prepurchase — and in milliseconds.
- Omnichannel commerce remains a top priority for digital business leaders. Before 2020, omnichannel fulfillment options were considered “specialty” features in the market or, at least, as major differentiators for vendors. However, today’s retailers commonly require support for a variety of fulfillment options — including pickup options and ship-from-store. These features are now table stakes in the market.
- Market demand for cloud solutions will supersede on-premises license demand. Forrester data shows that three-quarters of global software decision-makers already use software-as-a-service (SaaS) OMS — or plan to do so within the next year.5 Cloudbased SaaS OMS solutions reduce substantial upfront and ongoing hardware, software, maintenance, and training costs.
