Concepts in Enterprise
Resource Planning
Fourth Edition
Chapter Three
Marketing Information Systems and
the Sales Order Process
Introduction
Table 7-1: What is CRM About?
Acquiring customers
Keeping customers
Growing your customers
Gaining customer insight
Interacting with your customers across all touch
points
Building lasting relationships with your customers
Delivering value to your customers
Achieving a sustainable competitive advantage
Growing your business
Three Elements of a Successful CRM
Strategy
• People – Company employees, from the CEO to the front-office customer service
representatives, sales and marketing, need to buy into and support CRM.
• Processes - A company's business processes must be reengineered to reinforce its CRM
initiative, often from the viewpoint of “How can this process best serve the customer?” (The
electronic evidence of a transaction in SAP ERP is called a “document.”)
• Technology - Firms must select the right technology to drive the processes, provide high
quality data to employees, and be user friendly.
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CRM Advanced Analytics
▪ Event monitoring (racking and recording customer interactions with a company's
products or services)
▪ Segmentation (dividing customers into groups based on shared characteristics,
such as demographics, interests, or purchase history)
▪ Personalization (process of customizing the customer experience based on the
individual customer's needs and preferences)
▪ Pricing (process of determining the price of a product or service)
▪ Trending (process of identifying and tracking popular topics or future trends)
▪ Advertising (process of promoting products or services to potential customers)
▪ Forecasting (process of predicting future events or trends)
▪ Profiling (process of collecting and analyzing data about customers to create a
profile of their behavior and preferences.)
▪ Association (process of identifying relationships between different data points.
This information can be used to improve customer targeting, product
recommendations, and fraud detection.)
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Fitter Snacker (FS)
Fictitious company that makes healthy snack bars
Does not have an integrated information system
Marketing and Sales (M/S) is the focal point of many of FS’s
activities
FS’s M/S information systems are not well integrated with
company’s other information systems
Company-wide use of transaction data is inefficient
Manufactures and sells two types of nutritious snack bars:
NRG-A: “advanced energy”
NRG-B: “body building proteins”
Has organized its sales force into two groups, known as divisions:
Wholesale Division
Direct Sales Division
Many of Fitter Snacker’s sales orders have problems, such as:
Incorrect pricing
5 Excessive calls to the customer for information
Delays in processing orders
Missed delivery dates
Reasons for problems:
FS has separate information systems throughout the company for 3 functional
areas: Sales order system; Warehouse system; Accounting system
High number of transactions that are handled manually
Information stored in the three systems is not available in real time
The sales process
Other important keywords
associated to CRM and SD…
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Lead Generation - The action or process of identifying and cultivating potential
customers for a business's products or services.
Contact points
Quote – Estimate with an expiration date
Sales Order – Quote that turns into a contract
Customer Order/Order Acknowledgement – Confirmation of order receipt
Order Fulfillment – Includes pick, pack, and ship activities
Billing – Invoice sent to the customer (A/R)
Cash Collection – Payment is received from the customer
7 Sales Quotations and Orders at FS
Giving a customer a price quotation and then taking the customer’s
order
Sales call: salesperson either telephones the customer or visits in person
At the end of sales call, salesperson prepares a handwritten quotation on
a form that generates two copies
Original sheet goes to the customer
Middle copy is first faxed and then mailed to the sales office
Salesperson keeps the bottom copy for his or her records
Quotation form has an 800 number that the customer can call to place an
order
Inefficiencies in the rest of the ordering process
Determining the delivery date
Checking customer’s credit status
Entering customer’s order into the current order entry system
Order Filling
Packing lists and shipping labels
Printed
8 twice a day
Hand-carried to the warehouse
At warehouse, hand-sorted into small orders and large orders
FS uses a PC database program to manage inventory levels in the warehouse
Accounting and Invoicing
Invoicing the customer is problematic
Sale’s clerks send the Accounting department the sales order data for
customer invoices
Accounting department loads the data into PC-based accounting program
Clerks manually make adjustments for partial shipments and any other
changes
Sometimes, order corrections are delayed and don’t catch up to the
invoicing process
Results in late or inaccurate invoices
Payment and Returns
Problems with procedure for processing payments
If9any errors have occurred in the sales process, customer will receive an incorrect
invoice
Many customers don’t return a copy of the invoice with their payment; errors can
result
Sales and Distribution in ERP
ERP systems can minimize data entry errors and provide accurate information
in real time to all users
ERP systems can track all transactions (such as invoices, packing lists, RMA
numbers, and payments) involved in the sales order
SAP ERP Sales and Distribution module treats the sales order process as a
cycle of events:
Pre-sales activities
Sales order processing
Integration
Inventory sourcing
Delivery
Billing
Payment
Summary
10
Fitter Snacker’s unintegrated information systems are at the root of an
inefficient and costly sales order process
An ERP system such as SAP ERP treats a sale as a sequence 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 SAP ERP, all these transactions, or documents, are electronically linked
ERP system’s central database contains:
Tables of master data: relatively permanent data about customers, suppliers,
material, and inventory
Transaction data tables: store relatively temporary data such as sales orders and
invoices
Questions To Be Resolved In Class
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1. What is document flow? Why is it important for auditors of a company?
TRUE/FALSE
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What is A, B, C and D?
