Manufacturers heading for “black hole of errors”

UK companies are heading for a catalogue of costly and unmanaged business errors, according to research for business process integration software firm Vitria. Its study of 100 companies found that despite business errors being linked to customer satisfaction and revenue loss, they are rarely seen as a board level concern and are often dealt with using costly, people-intensive processes. Key findings: 40% of respondents believe that errors are first felt by customers, and that compliance is a minor issue in comparison, yet more than two thirds still manage exceptions manually. 52% of manufacturing companies are not investing at all in this area, and over half see business errors as the responsibility of the business line manager. Only 10% see it as part of the financial director’s concern. “Handling errors manually is an expensive exercise and costs businesses in the UK millions of pounds every year,” says Peter Abrahams of analyst Bloor Research. “Customers understand that errors sometimes occur; what they will not accept is error resolution being slow or inaccurate. It is a major indicator of customer service and therefore can no longer be swept under the carpet.” Of those companies investing in technology to automate business process error handling, 33% state that a packaged solution has been the most cost-effective approach. Vitria director of marketing for manufacturing and supply chain Mike Nejad sees the problem growing for companies outsourcing aspects of their business or going through mergers and acquisitions, with resulting disparity of systems. “There are a lot of dynamics than an go wrong… This is a hidden problem – our survey shows this: manufacturers need to understand the impact of errors on bottom line. “Vitria’s solutions provide ability to collaborate among different applications and processes so users can look at exceptions, errors, fluctuations, and see the real issues, and the impact so they know what to do. If problems are re-occurring, they can also define rules and resolutions that goes with them – like part number wrong, or mechanical errors, or wrong route. “So we’re providing a dashboard that shows all that information from several different sources – ERP, CRM, whatever – and then notifies managers, expediters, production, whatever.”