Marco contextual

Based on the current state analysis, a project-based firm includes many various order types, from projects to products and service sales. Literature has defined a project-based firm as a company that does most of its work in projects (e.g. Lindkvist 2004; Hobday 2000). Artto et al (2015, p. 71) have extended the definition by arguing that PBFs are normally providing also services for their customers after the project delivery phase in order to integrate more closely to customer’s operations. This study recognizes 19 differ- ent order types in the target company. Eight of them are project order types and eight service order types. The remaining three are product sales that are kind of small projects, but without project manager, schedule or budget estimation and usually they are invoiced after the delivery.

The analysis suggests that almost every order type requires an own order management and invoicing process. In Valmet Automation, these processes of all 19 order types can be demonstrated with 10 different detailed process graphs. However, the process graphs include a lot exceptions, because many different processes are demonstrated within a same graph. For instance, all product sales are demonstrated within the same process graph, even though the trials differ from the actual product sales. Therefore, the current order management and invoicing processes in Valmet Automation are quite complex. Literature has not recognized a need to have an own order management and invoicing process for every order type, because it merges all order types into the same process. Therefore, the order management of projects or any other specific order type is not dis- cussed. Invoicing, on the other hand, is categorized by the sales type and payment execu- tion. Literature recognizes, for instance, that some orders are invoiced after delivery and some based on the agreements during the delivery. (Lahti & Salminen 2008, p. 80–83)

Currently every order management and invoicing process in Valmet Automation Oy in- cludes four main phases: receiving, order entry, invoicing and closing. According the analysis, the tasks within the phases vary depending on the order type. This is because the order types have different content from hardware, software and labor to entire auto- mation systems and they require various invoicing from advance payment and install- ments to periodic or recharging invoicing. The differences are collected to the summary table, that enables the comparison between the order types. This kind of categorization of the processes and definitions for the terms and phases in order management and invoicing process simplifies the both national and global order management and invoicing within Valmet Automation. Communication and coordination between the different countries, functions and teams is easier with common definitions. When people use the same (stand- ardized) terms, everybody in the company knows what they are talking about. In addition, harmonization is easier with general process that provides a certain standard.

In the literature, order management and invoicing is not recognized as an own process or a concept. It is included in the other processes, like order fulfillment process that is an end-to-end supply chain management process from first supplier to end customer (Crox- ton 2003). Therefore, the OMI processes are described much more detailed in this thesis than they are usually discussed in the literature. For instance, most of the activities (gen- erate order, transmit order, receive order, enter order and edit order) in Croxton’s (2003) model of order fulfillment process are defined as main phases in the general order man- agement and invoicing process in VA Finland. Both order management and invoicing processes are introduced in the Figure 18 in order to compare them.

Figure 18. Order management and invoicing process in Valmet Automation Oy versus in the literature

In Figure 18, the general order management and invoicing process in Valmet Automation Oy that is introduced already in the Subchapter 4.1, is completed with general main tasks. The lower part of the figure, with Croxton’s (2003) order fulfillment process is a simpli- fied version of the Figure 5 in Subchapter 2.2.2. The length and size of the dark green bar demonstrates that order fulfillment process is an end-to-end process that includes various subprocesses. Order management and invoicing process, on the other hand, is only like an extended subprocess of its own that does not cover the whole supply chain. It is also shorter than order fulfillment process. The colorless process arrows within operational subprocesses illustrate the other subprocesses of the order fulfillment process that are not discussed in this thesis. In the general order management and invoicing process, all the main phases relate closely to the topic itself. The process is also linked to other functions and processes. For instance, order filling and order delivery are usually happening before or during the invoicing. Therefore, there is a small dash line arrow in that process too. Only order entry is named in both processes, so it is the most important step in the order management and invoicing process. It is called ‘entering’ as a main phase and ‘enter or- der’ as an operational subprocess. Croxton’s (2003) operational subprocess is wider con- cept than the main phases in the target company, because it includes also activity ‘receive order’ that is separated as an own main phase in the general process. Based on the inter- views and observation, order entry is also the most critical phase of the order management and invoicing process in Valmet Automation Oy. Order entry phase creates the infor- mation to the ERP system that defines the what the customer has ordered and how the order should be fulfilled. According to Stadtler and Kilger (2008, p. 186), customers must determine the configuration options at the order entry in order to enable the generation of a bill of materials for products that are configured. In addition, order entry is referred almost as a synonym for order management, that is defined as “filling up the customer orders into the information management systems” in this thesis.

5.2 Ways to improve order management and invoicing pro-