For OEMs, it becomes essential to adapt to the changing market dynamics. To ensure process efficiency and streamline order returns, businesses must adopt systems and solutions that enable a transparent and secure mechanism to achieve such transformation.
A business grows when the customer base and revenue grow. This means that there would be instances where customers would not like their products and would initiate returns.
Managing order returns is a cost-intensive process that employs both resources and time to complete. Most businesses are unable to understand the criticality of implementing such solutions and it results in loss of revenue. In this blog, we will discuss how implementing one of the best Warranty Management Software for OEMs can help transform businesses.
The Pitfalls Faced by OEMs Without a Warranty Management Software
Managing the product lifecycle is a tedious task as it relies heavily on the collection of data and utilizing that data to gain a deeper insight into product quality, order returns, etc. Without implementing warranty management software, OEMs can encounter a range of challenges that impact customer satisfaction, operational efficiency, and overall business revenue and growth. OEMs need a solution that provides real-time information about product data and makes data-backed decisions that are in favor of business growth.
Let us look at the challenges faced by businesses without adopting a dedicated warranty management solution:
- Time-Consuming and Manual Processes: Without dedicated warranty management software, OEMs need to rely heavily on manual and time-consuming tasks which can lead to delays and inefficiencies in operations. These manual tasks may be managing spreadsheets, tracking the product warranty, multiple documents, claims, and approvals. These processes together can have a cascading effect on the overall revenue of the business as they tend to be cost-intensive. Such activities also require dedicated resources, and they lack the availability of data. Interpretation of such data would also require time and resources which would prove to be a costly affair for scaling businesses.
- Inaccuracy of Data and Visibility: When a business does not have a dedicated warranty management system in place, the tasks are handled manually. This can lead to error-prone results. The variation could just be a digit in the data but can be thousands when looked at from an organizational perspective. This lack of accuracy can lead to severe inconsistencies in the data and often cause a lack of visibility which would in turn lead to longer decision-making. Tracking warranty is a challenging task and if it is prone to errors, the whole process would need to be repeated which would result in various forms of redundancies in processes and prevent OEMs from understanding the trends and gaining insights.
- Risk of Warranty Fraud: Managing processes manually can lead to increased susceptibility to warranty fraud. Warranty fraud occurs when the policies are exploited for the benefit of an individual or an organization. These are complex and can occur in any company that provides warranties on their products. Without the implementation of dedicated validation mechanisms that cover crucial functionalities such as Return Material Authorisation (RMA), OEMs may struggle between legitimate claims and fraudulent ones. This leads to a higher probability of legitimate claims being delayed as it may require businesses to employ a separate process to validate claims. While the claims process might be done with utmost accuracy, the need to employ a new process would be highly cost-intensive to organizations and impact the overall business success.
- Limited Reporting and Data Insights: Without the implementation of a dedicated system to manage all warranty data and gain deep insights, reporting becomes increasingly problematic. Firstly, collecting the data can prove to be tedious for OEMs. Secondly, the interpretation of such data would require longer hours and dedicated resources to complete. This would mean a critical revenue loss for businesses. Managing a product warranty can be a data and cost-intensive task for businesses. This requires OEMs to adopt a unified system where all the warranty-related processes can be managed.
- Increased Administrative Overheads: Manually managing warranty tasks would require OEMs to employ additional resources to track product warranty, product lifecycle management, etc. This entails an additional cost on the administration part of the process. There would be a need to do manual data entry, process paperwork, and coordinate between different departments which would add an additional cost to every activity performed while managing tasks in warranty management.
Strategic Advantages of Adopting a Unified Warranty Management Software
We have discussed how the absence of a warranty management system impacts OEMs’ business growth and success.
Providing a warranty entails multiple activities and can lead to different types of challenges as we have discussed in the previous section. We have seen how cost-intensive it can be to manage an entire product’s lifecycle manually. How it may lead to errors and inconsistencies in the data which harms the decision-making process. Having a warranty management system enables OEMs to put their focus on achieving business success while the warranty management software automates the warranty claims processes. Let us now discuss the benefits of implementing a warranty management system:
- Improving Efficiency with Streamlined Processes: When we discuss warranty management, the thought of automation crosses our minds. This is how the processes can be streamlined and efficiency can be improved. Automating processes can reduce the dependency on manual intervention. This automation enables OEMs to be more efficient and have error-free systems which enhances the organisational productivity. With a dedicated warranty management system, OEMs become adept at handling claims, approvals, documentation, validations, and other tasks related to warranty management with greater accuracy and speed. A warranty management software can help eliminate bottlenecks and promote OEMs to focus on future activities.
- Cost Reduction: While discussing the absence of a warranty management system, we often have come across increased cost factors multiple times. This happens when some manual errors and processes are time-consuming. Automating tasks reduces the errors in processes, significantly reduces the administrative overheads, and automatically allocates resources to bring about efficiency in the warranty management processes. This degree of efficiency can bring about a significant cost reduction for OEMs and empower them for business success.
- Compliance and Accountability: An integrated and dedicated warranty management software enables OEMs to be compliant and adhere to industry regulations. This protects the business from any legal issues and establishes accountability in warranty-related activities. Many times, industry regulations require businesses to maintain detailed records of all warranty-related information. Warranty management software helps OEMs maintain such detailed data records.
- Data-driven decision-making: The importance of collecting data at various touchpoints during a warranty-management process is absolutely essential. The data collected can be used to interpret all product information and identify the products’ performance in the market. Such data can also help businesses make informed and data-backed decisions related to all marketing and operational activities. This data also helps OEMs address all issues related to products and follow stringent quality control measures to ensure product quality. Overall, this data can help OEMs stay ahead of the competition and make strategic plans for future success.
Conclusion
The advantages of implementing dedicated warranty management software in the operational framework are undisputable. It brings with it transformative techniques that help OEMs make a firm stand in the market and stay ahead of their competition. Streamlining processes, making the warranty claims processes efficient, and enabling OEMs to make data-driven decisions are something that will continue to contribute to businesses in the long run. Integrating such warranty management software enables OEMs to improve customer satisfaction, improve brand loyalty, and build stronger relationships with suppliers and vendors.
For OEMs to thrive in this digitally competitive market environment, it is crucial for them to adopt new and advanced technologies. These would help them become future market disruptors and be agile in their strategies.
