Concepts in Enterprise Resource Planning 2nd Edition Chapter 3 Marketing Information Systems and the Sales Order Proc

2. Fitter Snacker’s Fictitious case study Easy to play Monday morning quarterback but many, many, many companies have had similar experiences Many, many companies have made similar transitions after enough pain, suffering, and costs Many, many companies need to make this type of transition – Opportunity! Keep in mind the scale of this company – 2 products More products=more complexity, it only gets worse!

3. Chapter Objectives Describe the chaos associated with an un-integrated sales process Could this keep a small company from becoming a mid-sized company? Could this keep a mid-sized company from becoming a large company? Could this make the difference between making money and losing money? Discuss how integrated data sharing increases company-wide efficiency Describe the benefits of CRM, a useful extension of ERP

4. Transactional Data What is “transactional data”? Examples? Is integration of transactional data across functional areas important?

5. Overview of Fitter Snacker What does Fitter Snacker make? What are the names of the products? How many sales divisions does Fitter Snacker have? What are these sales divisions and who do they each sell to?

6. Overview of Fitter Snacker Both divisions offer terms of 2-10, net 30. What does this term mean? Fitter Snacker also sells bars in store-brand wrappers for some chains. What kind of challenges does this present?

7. Problems with Fitter Snacker’s Sales Process How many different information systems does Fitter Snacker operate and what do they each do? What information flows do we need between these systems to conduct business?

8. Problems with Fitter Snacker’s Sales Process How does accounting get information regarding sales transactions? How does sales get information from accounting regarding credit? What happens with manual transactions and this type of information flows?

9. Sales Process

10. Quotations What kind of problems does Fitter Snacker have with their quotation process?

11. Sales Order Customers want delivery information when placing an order. How do they estimate delivery time? How do sales clerks get information regarding credit? Does this information reflect recent purchases, payments, or returns? How do integrated information systems solve this problem?

12. Sales Order What are some of the major capabilities of Fitter Snacker’s order entry system?

13. Order Filling

14. Whoops! Out of Stock What can they do when they accept an order and find out that they are out of stock for part of the order? How difficult is it to decide on the best option? How many people needed to make the decision? How do integrated information systems solve this problem?

15. Important Customers Custom wrappers, custom display boxes What if I have enough product but it is not in the right wrappers or not in the right display boxes? How do integrated information systems solve this problem?

16. Invoicing

17. Invoicing How often does Accounting prepare invoices? What information do they need to do this? Does the customer receive the invoice with the shipment? How do integrated information systems solve this problem?

18. Payment What kinds of problems occur when processing payments? How do integrated information systems solve this problem?

19. Sales Process

20. Returns What kind of challenges does Fitter Snacker have to deal with when products are returned? What happens when the customer forgets to include the RMA number? How do integrated information systems solve this problem?

21. Payment and Returns What kind of problems are encountered if return credits are not properly credited in a timely basis?

22. The Integrated Sales Process

23. Sales and Distribution in ERP There may be up to six events for a sales order Pre-sales activity Sales order processing Inventory Sourcing Delivery Billing Payment

24. Pre-Sales Activity What kind of pricing information is provided to customers? What checks the validity of discounts? How to the order entry clerks know the terms and conditions of a particular quote?

25. Sales Order Processing With an integrated system, where does the data come from when creating an order? What steps make up this process?

26. Inventory Sourcing With an integrated system, how do we know if we have what we need to fill the order? In addition to what we have in stock today, what else do we know with an integrated system? If a big order comes in, what can we trigger with an integrated system?

27. Delivery What does “Delivery” mean in an SAP system?

28. Billing With an integrated system, where does the information for the invoice come from? With an integrated system, what happens automatically in accounts receivable?

29. Payment When a payment is received, how quickly is this reflected in the customer’s credit for order entry?

30. Taking an order in SAP’s R/3 To enter a sales order in SAP’s R/3, the sales order clerk must identify the customer and material ordered to the system SAP identifies customers and materials via a unique number Search functions allow the sales order clerk to find a customer or material number easily

31. Taking an order in SAP’s R/3

32. Customer Search

33. Customer Search Results

34. Sales Order Data What is “Master Data” and what parts of the order are comprised of “Master Data”? What does the “Organizational Structure” allow us to do? What are our “Distribution Channels”? Does pricing vary based on any of this?

35. Complete Order Screen

36. Inventory Sourcing What is “Inventory Sourcing”? Do I really care what is in the warehouse now or do I need to know what will be in the warehouse on the shipping date? What will make inventory go up or down between now and then? What does ATP let me do?

37. Order Proposals

38. Document Numbers Assume each of your orders is assigned a unique order number What is a customer’s “Purchase Order Number” and why do I care to keep track of this?

39. Audit Trail &Document Numbers From the initial price quote to the processing of the check by accounts receivable, how do we keep track of who has done what in each step of the process? What are “documents”? What is “document flow”?

40. Document Flow

41. Pricing Do I offer identical pricing regardless of items ordered, size of order, or customer placing the order? What is “condition technique”?

42. Pricing

43. Price Discounts

44. Integration of Sales and Accounting With an integrated system, do we need to: Notify accounting of sales via FTP? Notify the warehouse of sales via printed shipping documents? Let accounting know about partial shipments before they create invoices? Worry about sales over extending credit or not accepting a sale due to old credit information?

45. Accounting Detail

46. Sales Process

47. Customer Relationship Management CRM helps a company streamline interactions with customers and make them consistent Goal is to provide a “single face to the customer” Any employee in contact with a customer should have access to all information on past interactions Information about a customer should reside in the CRM system, not with the employee CRM also provides a company with tools to analyze the vast quantities of sales data available from the ERP system

48. Core CRM Activities What is “One-to-One Marketing”? What is “Sales Force Automation (SFA)”? What is “Sales Campaign Management”?

49. Core CRM Activities What are “Marketing Encyclopedias”? What is “Call Center Automation”?

50. SAP’s CRM Software SAP R/3 contains some primative CRM functionality: Contact management tool: Database of customer contact information Sales activity manager: Supports a strategic and organized approach to sales activity planning Helps ensure follow-up activities are accomplished

51. Contact Manager

52. Sales Activity Manager

53. mySAP CRM A separate CRM system has the advantage of not interfering with the performance of the ERP system The SAP R/3 system provides the raw data for CRM R/3 and CRM can also interact with: Business Warehouse (BW): Flexible system for reporting and analysis of data Advanced Planner and Optimizer (APO): System to support flexible planning of the supply chain Provides improved customer service with Global ATP

55. mySAP CRM SAP’s CRM manages three basic task areas: Marketing Sales Service

56. Cultivating a Customer Relationship Prospecting Acquiring Servicing Retention

57. Marketing and Campaign Planning Companies spend significant sums on marketing campaigns Successful planning, execution and evaluation are necessary to achieve the maximum benefit mySAP CRM supports: Marketing and Campaign Planning Target Group Selection Campaign Execution Activity Management Campaign Analysis

58. Marketing and Campaign Planning

59. Benefits of CRM Lower costs: Higher revenue: Improved strategy and performance measurement:

60. Top Line Versus Bottom Line

61. Another Look: CRM Success and Failure CRM is often incorrectly viewed as a technology implementation driven by the IT department CRM should be viewed as a business strategy CRM tools can help identify the most profitable customers

62. Give Me 3 Examples Fitter Snacker’s un-integrated information systems are at the root of an inefficient and costly sales order process. Because information is not shared in real-time, customers are asked to repeat initial sales order information. As an order is processed, errors in pricing, credit checks, and invoicing also occur, presenting a poor company image to customers. Integrated ERP software would let FS avoid errors because all customer data are stored in a central database that is shared in real-time by all company employees.

63. Give Me 3 Examples An ERP system such as SAP’s R/3 sees a sale as a cycle of related functions, including taking orders, setting prices, checking product availability, checking the customer’s credit line, arranging for delivery, billing the customer, and collecting payment. In R/3 all these transactions, or documents, are electronically linked, so tracking an order’s status (partial shipments, returns, partial payments, and so forth) is easily accomplished.

64. Give Me 3 Examples When an ERP system is installed, various configuration decisions are made. These decisions reflect management’s desires of how transactions should be recorded and later used for decision-making. For example, the system can be configured to limit selling price discounts, thus avoiding unprofitable pricing. An ERP system’s central database has master data tables for customers, suppliers, and inventory. The tables hold relatively permanent information about each subject.

65. Give Me 3 Examples Customer Relationship Management (CRM) systems build on the organizational value ERP provides; it specifically increases the flexibility of the company’s common database in regards to customer service. Various kinds of CRM software are available, some from ERP vendors (including SAP) and some from third-party software companies. CRM software can lead to operational savings, but most companies buy it because they feel that having better customer relationships will result in higher revenues. Uses of CRM have evolved since the software was initially launched, beginning as a customer contact repository to extending its capabilities to sophisticated business intelligence.