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

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 Entry Stores customer order data for sales analysis
Prints out packing labels for warehouse (twice a day!)
Produces the data to create invoices
Provides data file for accounting department for financial, tax and managerial accounting purposes

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. Receiving 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
R/3
Client / Server CO AM PS WF IS HR SD PP QM FI PM MM
One
Integrated
Database

24. Pre-Sales Activity
What kind of pricing information is provided to customers?
What checks the validity of discounts?
How do 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
Sold-to party: Where the customer’s identification number is entered
P.O. Number: The number assigned
by the customer to this sales order
Req. deliv. date: The date when the customer would like to receive the order
Material and Order quantity: What the
customer is ordering
Figure 3-2 SAP R/3 order entry screen

32. Customer Search Figure 3-5 Search screen for customers
Clicking on Sold-to party field produces a search icon. Clicking on the search icon calls up a search window with numerous search options
Figure 3-5 Search screen for customers

33. Customer Search Results
Figure 3-6 Results of customer search

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
Figure 3-7 Order screen with complete data

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 Figure 3-8 Order proposals Three options proposed
by SAP R/3
Figure 3-8 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
Accounting Document is linked to sales order 5
Figure 3-9 The Document Flow tool, which links sales order documents

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 Figure 3-10 Pricing conditions for sales order
Net price for order, including discounts
Base price is $240/case
The production cost of the 10 cases is $1,992
Discount is 10 percent
Figure Pricing conditions for sales order

43. Price Discounts Figure 3-11 West Hills Athletic Club price discount
If a line in the order is over $1000, the discount is 5 percent
If a line in the order is over $1500, the discount is 10 percent
Figure West Hills Athletic Club price discount

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
Accounting document , accessible from the document flow screen
Accounts affected by the sales order
Figure Accounting detail for the West Hills sales order

46. 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

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

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

49. 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

50. Contact Manager
Figure SAP R/3 contact manager

51. Sales Activity Manager
Figure SAP R/3 sales activity manager

52. 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

53. Figure 3-15 SAP CRM system landscape
mySAP
CRM
System
SAP R/3
ERP
System BW
Business
Warehouse
module
APO
Advanced
Planner & Optimizer
module
Figure SAP CRM system landscape

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

55. Cultivating a Customer Relationship
Prospecting
Acquiring
Servicing
Retention

56. 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

57. Marketing and Campaign Planning
Planning Execution
Figure Marketing and campaign planning

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

59. Top Line Versus Bottom Line
Where do CRM Systems add value?

60. 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

61. 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.

62. 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.

63. 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.

64. 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.