AI Order Management Definition Glossary

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Artificial intelligence (AI) has transformed the way businesses operate and manage their orders. From automating non-valuable, repetitive tasks (like data entry, order creation, and confirmation) to providing real-time insights, AI can significantly improve the efficiency, accuracy, and speed of entire order management processes. OK. It's all good and up to par, but what exactly is AI order management? Automation, ML, NLP, LLMs? ERP, CRM, HITL, API, ANN, AI Assistants? WT...?

Understanding the jargon and terms can be quite confusing and overwhelming. To make it easier for you, we've put together an all-inclusive guide to every definition of AI order management you need to know. Don't give us TL;DR. Write it. Pin it. Save it. It'll help you understand the vocabulary of AI Order Management Systems (OMS), not just for today but for the future.

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AI Order Management Definition Glossary

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AI Assistants

AI Assistants, aka virtual or intelligent assistants or AI Agents, are AI-powered software agents that interact with users in natural language. AI Assistants can perform a wide range of tasks, such as order entry, status updates, and customer support. They use NLP to understand and respond to user queries, draft personalized responses to emails, generate quotes, and even ask for missing and/or additional information from customers/clients to ensure the accuracy and completeness of orders.

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Artificial Intelligence (AI)

Artificial intelligence (AI) is not just a single technology or tool; it's a broad umbrella term that encompasses multiple techniques and methodologies, such as machine learning (ML), natural language processing (NLP), deep learning, and computer vision. AI technology allows machines and digital systems to simulate the cognitive functions of humans, such as learning, reasoning, problem-solving, and decision-making.

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Access Management

Access management (AM) is a security practice that controls and manages access to critical digital assets, sensitive data, or information. It ensures that only authorized individuals have access to the system and its resources, not malicious actors. AM involves authentication (verifying user identity), authorization (granting access rights), and auditing (tracking user activities) to protect against cyber threats, data breaches, and fraud.

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Artificial Neural Networks (ANN)

Artificial neural networks (ANN) are part of the wider concept of deep learning technology. ANN are computational models inspired by the structure and function of biological neural networks in the human brain. They consist of interconnected nodes (like neurons in the brain) that process information, learn from data, and make decisions based on patterns and connections.

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AI Order Management

AI order management is an intelligent software solution that helps businesses streamline and automate their order management workflows, like order creation, confirmation, tracking, and fulfillment. It uses a combination of technologies like LLMs, deep learning, and NLP to capture, extract, analyze, and process data from different sources, such as emails, purchase orders, and invoices.

The main goal of AI for order processing is to reduce manual efforts (such as order entry, validation, etc.), mitigate errors, and improve overall operational efficiency. AI solutions for order management allow employees to focus on high-value tasks, while it takes care of routine, repetitive workflows that do not require any human intervention.

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Application Programming Interface (API)

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An API is a set of rules and protocols that enable different software applications to communicate with each other and share data, functionalities, and features. In the context of order management, APIs allow AI solutions (like Turian) to integrate with existing business systems, such as ERP or CRM, and exchange data in real-time. For example, an API could facilitate the transfer of order data from a client's ERP system to an AI-powered order management solution for processing and fulfillment.

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After-Sales Service

After-sales service refers to the support and assistance provided to customers after they have purchased a product or service. This includes real-time order tracking, delivery updates, returns and exchanges, and customer support for any issues or concerns they may have with their order.

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Automated Order Processing

Automated order processing uses technology to optimize and automate the order management process, from receiving an order to its fulfillment. Automation reduces the need for manual effort (like order entry, classification, and reporting) and streamlines the entire process, making it faster, more efficient, and error-free. The result? Improved customer experience, increased productivity, and cost savings for businesses.

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Batch Processing

Batch processing is a method used to process large amounts of data at once, typically at scheduled times, rather than processing it in real-time. This technique is commonly used in order management to handle high volumes of orders efficiently. Batch processing can help reduce order processing time and improve system performance, as it allows for tasks to be completed in bulk rather than individually.

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Bill of Materials (BOM)

A bill of materials (BOM) is a comprehensive list of all the parts, components, and raw materials required to manufacture a product. BOMs are essential for accurate sales order entry in manufacturing as they ensure that all necessary materials are available before production begins.

Blanket Order

A blanket order (also known as a standing purchase order) is a long-term purchase agreement between a buyer and a supplier. Under a blanket order, the buyer can make multiple deliveries over time without having to create separate sales orders for each delivery. This allows for a more efficient and streamlined purchasing process, as the buyer does not have to continually enter sales orders for the same items.

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Bots

Bots, robots, chatbots – whatever you call them, they're all the same thing: software-powered "agents" that can interact with users in a conversational and human-like manner. These bots can assist with order management by answering customer queries, providing order status updates, and generating custom responses based on customer preferences and order history.

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Business-to-Business (B2B)

As the name suggests, business-to-business (B2B) is a type of commerce or transaction that involves the exchange of goods, services, or information between two businesses rather than a single business and a consumer. This can include suppliers, manufacturers, wholesalers, and retailers. B2B transactions are usually larger in scale and involve more complex processes than business-to-consumer (B2C) transactions.

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Cloud-based Order Management

A cloud-based order management system is a software solution that allows businesses to manage their orders and related processes on a virtual platform hosted on the cloud. These systems enable real-time access and collaboration across multiple departments, regardless of their physical location. Since the system is completely online, anyone with authorized access can view orders, update information, and track order status from anywhere, anytime, making it highly convenient and efficient.

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Customer Lifetime Value (CLV)

Customer lifetime value (CLV) is a metric that measures the total value a customer brings to a business over the entire relationship. It takes into account factors like the customer's purchase history, average order value, and the likelihood of repeat purchases to estimate their potential contribution to the company's revenue. This metric is critical in order management as it helps businesses prioritize orders based on the customer's value and provide better service levels to high-value customers. It also helps companies identify and retain loyal customers, ultimately leading to increased profits.

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Customer Information

Customer information refers to any data or details about a customer. A sales order typically contains details like customer name, contact information, billing/shipping addresses, quantities, price, customer-specific discounts, and requested delivery date.

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Cognitive Order Management

Cognitive order management is a synonym for intelligent or AI-powered order management systems.

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Customer Relationship Management (CRM)

CRM is a software solution that helps businesses manage and analyze customer interactions and data throughout the entire customer lifecycle. With CRM, companies can optimize revenue and profitability while enhancing customer satisfaction, retention, and loyalty by automating and streamlining various customer-centric processes like sales, marketing, customer support, and service.

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Customer Service

Customer service is the support and assistance provided to customers before, during, and after a purchase. It includes activities like answering customer inquiries, resolving issues or complaints, and providing guidance and support to ensure a positive customer experience. Good customer service means happy customers, which can lead to repeat business and positive word-of-mouth referrals.

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Data Analytics

Data analytics is the process of collecting, analyzing, and interpreting data to gain valuable insights and make informed business decisions. With AI order management systems, businesses can leverage advanced data analytics techniques to identify common bottlenecks (like order delays, errors, etc.) and optimize their order management process to improve customer satisfaction and operational efficiency.

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Data Mining

Data mining, also known as knowledge discovery in data (KDD), is a process that identifies patterns and relationships in large datasets and extracts useful information for strategic decision-making.

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Deep Learning (DL)

Deep learning is a subfield of Machine Learning (ML) that uses artificial neural networks (ANNs) to teach machines to process data in a way similar to the human brain. These models can handle large and complex datasets, learn from them, and make accurate predictions or decisions with minimum human intervention.

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Demand Forecasting

Demand forecasting is the process of predicting what customers' demand will be like for a certain product/service in the future. AI-driven demand forecasting utilizes advanced algorithms to analyze historical sales data, market trends, and other relevant factors to predict future demand. Demand forecasting allows businesses to optimize inventory levels, avoid stockouts, and improve order management by ensuring that the right products are available at the right time to meet customer demand.

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Electronic Data Interchange (EDI)

Electronic data interchange (EDI) is a system that enables the electronic exchange of documents (e.g., purchase orders or invoices) between businesses in a standard format. EDI eliminates the need for manual data entry and paper-based processes, which can be time-consuming and error-prone. By automating the exchange of business documents, EDI helps streamline sales order entry and processing, leading to faster order fulfillment and improved efficiency.

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End-to-end Order Management Automation

It refers to the automation of an entire order management process. From the initial step of receiving a request for quotation to the final outcome of cashing in, every task is automated with less to no human intervention. End-to-end automation can significantly reduce the time and effort required to process an order and minimize the chances of manual errors.

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Enterprise Resource Planning (ERP) System

Enterprise resource planning (ERP) is a software system that helps organizations manage and integrate their core business processes, including financial management, supply chain, human resources, procurement, manufacturing, and more. Some of the most widely used ERP systems include SAP, Oracle NetSuite, and Microsoft Dynamics 365. These systems provide a centralized platform for businesses to streamline their operations, improve productivity, and make data-driven decisions.

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Exception Handling

Exception handling is the process of identifying and addressing issues or discrepancies in order management that fall outside normal processing rules. These exceptions can include missing or wrong information, incorrect pricing, or unexpected changes in order status. Using AI to detect, handle, and resolve these anomalies in order workflows can lead to more efficient and error-free order processing. For example, if a customer's order is missing crucial information, like a shipping address, AI can flag this as an issue and send an alert to the right team member to resolve it.

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Forecasting

Forecasting is the process of predicting future trends or outcomes based on historical data and analysis. It helps businesses make informed decisions and plan for the future by identifying potential opportunities and challenges. For instance, if a customer consistently delays payments for their orders, AI can forecast the likelihood of future delays and alert businesses to take proactive measures for timely payments.

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Fraud Detection

AI systems use advanced algorithms and real-time data analysis to identify fraudulent activities or transactions. AI can process a huge amount of data from various sources, including financial and behavioral data to detect anomalies and patterns that may indicate fraud. It then flags or alerts the appropriate authority or decision-maker for further investigation, if needed.

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Fulfillment Service Level Agreement (SLA)

A fulfillment service level agreement (SLA) is a contractual agreement between a business and its customers that outlines the expected delivery timelines for products or services. This contract is crucial for prioritizing orders during entry, as it sets clear expectations for when customers can expect to receive their orders.

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Generative AI

Generative AI is a subset of AI that focuses on creating new content or data based on existing information. Examples of generative AI include large language models (LLM) like OpenAI's ChatGPT 4o and images generated by Dall-E.

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Hallucinations

These happen when AI, typically a large language model, generates an output that is logical and grammatically precise but is not based on any actual data or makes any sense. For instance, an AI might generate a statement that says, "The Great Wall of China is located in London," which is logically structured but factually incorrect. Another example could be an AI generating a completely new, fictional product or service that does not exist in reality.  

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‍Human-in-the-loop (HITL)

Human-in-the-loop (HITL) is a technique in which humans and AI systems work together to achieve a common goal. In this framework, humans provide guidance, oversight, and decision-making while the AI system executes tasks and processes data. HITL is often used in tasks that require human reasoning, judgment, and creativity.

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Incoterms

Incoterms (or international commercial terms) are a set of standardized international trade terms that are used to define the responsibilities of buyers and sellers in the delivery of goods. These terms are essential for global sales order entry as they provide a clear understanding of the responsibilities and obligations of each party involved in an international trade transaction.

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Intelligent Document Processing (IDP)

Intelligent document processing is a technology that automates document-based workflows. IDP relies on a combination of technologies, such as OCR, machine learning, and RPA to capture, extract, and process data from different types of documents, like paper documents, PDFs, Word docs, emails, or images. The main purpose of IDP is to extract valuable information from large sets of data without any manual intervention. However, IDP alone (without these technologies) isn't intelligent. While it can extract and process data, IDP lacks the context and ability to take action. IDP cannot adapt to changes in document formats or data fields. It also lacks the ability to understand the meaning and essence of specific data points. For instance, if a sales order lists a customer's name as "Bob Smith" in one document and "Robert Smith" in another, IDP won't recognize the discrepancy. It simply processes the data as it is. Every time there's any change in the document structure or data fields, IDP needs to be re-trained and configured to adapt. IDP is good for processing documents, but that's it. It cannot make decisions or take any actions based on the extracted data.

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Intelligent Order Management System

A synonym for cognitive or AI order management system.

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Invoice

An invoice, also referred to as a bill or tab, is a commercial document issued by a seller to a buyer for goods or services provided. It serves as a request for payment and includes details like the quantity of items, the total amount due, payment terms, and how a customer can make payment. It's basically a record of the financial transaction between a buyer and seller.

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Inventory Management

In simple terms, inventory management is the process of managing and controlling a company's inventory levels to ensure that enough stock is on hand to meet customer demand. It includes tasks like tracking inventory levels, managing stock levels, and optimizing the supply chain to prevent stock shortages or overstocking.

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Invoice Processing

Invoice processing is the automation of capturing, validating, and approving invoices for payment. It involves extracting relevant customer data from invoices (like invoice number, date, amount, etc.), verifying it against purchase orders in the ERP/CRM system, and routing it to the appropriate personnel for approval.

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Large Language Models (LLMs)

Large language models (or, in short, LLMs) are very large deep learning models that are pre-trained on billions of words on the internet from various sources, like books, articles, and websites. These AI models (e.g., OpenAI's GPT-4o) can understand, generate, and interact in natural language, just like humans, to perform a wide range of tasks, such as answering questions, summarizing texts, and generating text. They can also think and learn continuously via new data and feedback.

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Lead Time

Lead time is the amount of time it takes for an order to be fulfilled from the moment it is placed. This process is often optimized using AI in predictive and cognitive order management systems, which can accurately predict lead times based on historical data and help businesses make more informed decisions.

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Machine Learning (ML)

Machine learning is a subset of AI that utilizes data and algorithms to replicate human learning and decision-making capabilities. ML needs to be trained on a large dataset to identify patterns, make predictions, and improve its performance; hence, the phrase "learning" in its name. It's like teaching a computer to learn patterns on its own based on available data.

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Manual Order Processing

Everything, from order entry and validation to updating records in the ERP/CRM system and shipment tracking, is done by hand. Manual order processing doesn't use automation tools; it depends on human workers to input, validate, and process orders. It's a traditional and outdated method of order management.

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Natural Language Processing (NLP)

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Natural language processing (NLP) is a branch of AI that allows computers/machines to understand, interpret, and manipulate language just like humans. It combines various techniques like computational linguistics, statistical models, ruled-based models, and machine learning to break down and analyze language, including its structure, meaning, and context. NLP enables AI systems to perform tasks like translation, sentiment analysis, and information extraction from text or images.

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Neural Networks

A neural network, which has its roots in artificial intelligence, is a series of algorithms that process information in a manner similar to the human brain. It consists of interconnected nodes or neurons organized in a layered structure. Machines or computers utilize this adaptive technique to learn from mistakes and improve their performance over time.

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Omnichannel Order Management

Omnichannel order management refers to the process of managing orders across multiple sales channels, including online, in-store, and mobile. This approach ensures a seamless customer experience and efficient order fulfillment, as customers can place orders and receive them through their preferred channel.

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Order Fulfillment

Order fulfillment, in simple terms, is the process of receiving, processing, and delivering an order to a customer from the time it is placed to when it reaches the customer's hands. It involves a series of steps, such as order processing and confirmation, inventory management, tracking order status, and customer communication, among others. A timely and efficient manner of fulfilling orders can greatly impact a company's success and customer satisfaction.

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Order Matching

Order matching is a procedure used to synchronize and reconcile incoming orders with existing records in the ERP/CRM system to avoid duplication and errors. This process ensures that customers get what they ordered and businesses receive what they have requested from their suppliers. The order-matching process involves comparing the following details of an order:

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• Sales Order: What has been ordered by the customer
• Sales Invoices: What has been invoiced to the customer
• Purchase Receipt: What's been received from the supplier
• Purchase Order: What has been ordered from the supplier by the business
• Purchase Invoices: What's been invoiced by the supplier to the business

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By matching these records, businesses can ensure that the right products/services are ordered, received, and invoiced to the correct customers or suppliers. This helps maintain accurate and updated records, avoiding discrepancies and preventing any potential losses due to incorrect orders or invoices.

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Order Management System (OMS)

Order management systems are software solutions that help businesses manage their entire order lifecycle from creation to fulfillment. These systems typically include functions like order creation, inventory management, order tracking, and customer service. While outdated systems may rely on ML or rule-based models, advanced solutions (like turian) use LLMs and sophistical algorithms to eliminate the need for manual intervention (like retraining models for every new task), helping businesses meet their customer demands more efficiently.

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Order-to-Cash

Order-to-cash (also known as O2C or OTC) is the end-to-end business process that starts when a customer places an order and concludes when the company receives payment for that order. While it may seem like a simple job, O2C involves a complex series of steps, such as order management, fulfillment, invoicing, payment processing, and reporting and analysis. AI-powered order-to-cash systems can help streamline this process by automating tasks like order intake, invoicing, customer communication, and payment tracking.

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Order Tracking

It's a process that involves monitoring and tracking the status of an order from creation to fulfillment. It gives businesses and customers real-time updates on the order's progress, including its delivery status, location, and estimated time of arrival.

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Procurement Automation

Procurement automation is the use of AI and other advanced technologies to automate purchasing activities. This could include streamlining supplier selection, purchase order creation, and requesting for quotes (RFQs) to improve efficiency and reduce manual work. The main goal of procurement automation is to make the procurement process more efficient, accurate, and cost-effective.

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Purchase Order (PO)

A purchase order (PO) is a legal document that is created by a buyer and sent to a supplier when you or someone in your company orders a product or service. The PO includes details like the item(s) ordered, quantity, price, delivery date, etc. It is essentially a list of what you want to buy from the supplier.

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Purchase Order Confirmation ‍

A purchase order (PO) confirmation is a document sent from the supplier to the buyer to confirm that they have received and accepted the purchase order. It verifies all the order details, like products, quantities, prices, and delivery dates. This confirmation serves as a legally binding contract between the two parties, ensuring that both are on the same page and agree to the terms of the order. In other words, it confirms that the supplier has agreed to fulfill the order as specified by the buyer.

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Predictive Analytics

Predictive analytics is a form of advanced analytics that uses historical data to forecast future outcomes and trends. It helps businesses make data-driven decisions and find potential bottlenecks that may impact their operations. For example, if a customer has a history of late payments, AI can predict the likelihood of future delays and help businesses take preemptive measures like sending reminders to avoid potential cash flow issues.

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Request for Quotation (RFQ)

A request for quotation (RFQ) is a process in which a business invites potential suppliers or service providers to submit their price quote for a particular product or service. In other words, an RFQ is used to gather and compare prices from different vendors to make an informed purchasing decision.

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Reverse Logistics

Reverse logistics, in simple terms, is the process of managing orders that are returned by customers and the reverse supply chain that follows. With the help of AI, businesses can streamline this process by automating refund processes, optimizing restocking decisions, and identifying resale opportunities for returned items.

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Robotic Process Automation (RPA)

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Robotic process automation (RPA) is a technology that uses software robots or bots to mimic human actions and automate simple, repetitive tasks (like data entry, extraction, etc.,) that are typically performed by humans. It's crucial to note that the task must be simple and structured for RPA to work effectively, as it cannot handle unstructured data or understand the context of language. RPA is a rule-follower. It follows pre-defined rules and instructions to complete a task, making it less adaptable to complex or dynamic processes. For instance, you can program your RPA to extract specific fields from a document (e.g., name, address, or price), but it cannot understand the context of the document or make decisions based on that; it simply follows the rules set by you.

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Sales Orders

A sales order (SO) is a document created by a business (seller) to verify and process the buyer's (customer) purchase order. Along with the product or service details, the sales order also includes information such as prices, quantities, delivery dates, and payment terms.

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Sales Quotation

A sales quotation, also known as a sales quote, is a document that tells a potential client (buyer) how much your product or service will cost. It serves as a formal proposal stating the prices, terms, and conditions for the sale.

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Sales Order Intake

Sales order intake is the process of receiving, recording, and processing customer orders for products or services. It is also known as a sales order entry. This process involves:

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• Order Capture: It is the initial step of receiving an order from a customer via email or other means. The customer provides the order information, like product name, quantity, delivery address, and other relevant details.
• Order Entry: It is the process of entering the order details into a company's ERP/CRM system. AI can automate this manual process by extracting relevant data from both structured/unstructured data sources, like emails, PDFs, Excel sheets, or hand-written notes, and entering them into the appropriate fields in the system.
• Order Verification: This step involves verifying the order details for accuracy, completeness, and consistency, like checking for product availability, pricing, customer information, and delivery address.
• Order Confirmation: After verifying the order, the company sends an order confirmation to the customer, acknowledging their request and confirming the details of the order.

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Supplier Relationship Management (SRM)

As the name suggests, supplier relationship management (SRM) refers to the management of interactions with suppliers. This includes tasks like evaluating/choosing suppliers, negotiating contracts, and monitoring performance among others. SRM is crucial in order management as it can help businesses improve procurement and order management efficiencies by ensuring timely and quality deliveries from suppliers.

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Supply Chain Management (SCM)

Supply chain management (SCM) is the process of managing the flow of goods, data, and finances linked to a product or service from the point of origin to the final destination. This includes all the activities involved in sourcing, procurement, production, and delivery of a product or service to the end customer.

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Structured Data

Any data that is organized and stored in a fixed format is known as structured data. This type of data is typically stored in databases, spreadsheets, or other structured formats that make it easy to search, retrieve, and analyze.

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Task Automation

Task automation is the use of automation technology to handle repetitive, time-eating, or manual tasks, like order entry, data extraction, etc., that are typically performed by humans.

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Unstructured Data

Unstructured data refers to any data that is unorganized and doesn't follow a specific format. This type of data is typically text-heavy with numbers, dates, etc., and doesn't fit neatly into a data table because of its lack of structure. Examples of unstructured data include emails, digital images, and documents such as PDFs or Word files, but also audio and video files.

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User Interface (UI)

A user interface (UI) is how a user interacts with a computer or software application. It includes all elements that allow users to interact with the system, such as menus, buttons, forms, and graphics. The UI works alongside the user experience (UX) to provide a seamless and enjoyable experience for the user.

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Workflow Automation

Workflow automation streamlines order management processes by replacing all the manual, time-consuming tasks with automated ones. It can help save time, reduce human errors, and increase efficiency in the order management cycle.

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Any AI order management definition we've missed?

Did we miss any other AI order management terms? Feel free to let us know, and we will add it to our list. Now that you have this comprehensive list of AI order management definition glossary at your disposal, we hope you can confidently talk with an AI OMS vendor and not be bogged down by technical jargon. Remember, the purpose of AI in your order management process is to simplify and streamline operations, and with a clear understanding of these terms, you can make the most out of this technology.

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