order process

Enterprise Systems Configuration for Business

MIS 490

CHAPTER 3

Marketing Information Systems and the Sales Order Process

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Objectives

After completing this chapter, you will be able to:

• Describe the unintegrated sales processes of the fictitious Fitter Snacker company

• Explain why unintegrated Marketing and Sales information systems lead to company-wide inefficiency, higher costs, lost profits, and customer dissatisfaction

• Discuss sales and distribution in the SAP ERP system, and explain how integrated data sharing increases company-wide efficiency

• Describe how SAP ERP processes a standard sales order

• Describe the benefits of customer relationship management (CRM) software

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Introduction

• Fitter Snacker (FS)

• 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

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Overview of Fitter Snacker

• 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

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Figure 3-1 The sales process

Fitter Snacker’s Sales Process

Separate system to Manage Inventory

Invoicing System

Accounting System

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Current Processes

• Sales Quotations & Orders

• Order Filling

• Accounting & Invoicing

• Payments & Returns

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Problems with Fitter Snacker’s Sales Process

• Many of Fitter Snacker’s sales orders have problems, such as: • Incorrect pricing

• Excessive calls to the customer for information

• Delays in processing orders

• Missed delivery dates

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Figure 3-1 The sales process

Problems with Fitter Snacker’s Sales

Process (cont’d.)

Separate system to Manage Inventory

Invoicing System

Accounting System

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Accounting and Invoicing

Current Invoicing Process:

• Sales 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

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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

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Pre-Sales Activities

• Customers can get pricing information about the company’s products

• Marketing activities such as tracking customer contacts, including sales calls, visits, and mailings

• Company can maintain data about customers and generate mailing lists based on specific customer characteristics

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Sales Order Processing

• Sales order can start from a quotation or inquiry generated in the pre- sales step

• Information collected from the customer to support the quotation is immediately included in sales order

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Inventory Sourcing

• Available-to-Promise (ATP) check

• System can recommend an increase in planned production if a shortfall is expected

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Delivery

• Delivery in SAP ERP system means releasing the documents that the warehouse uses to pick, pack, and ship orders

• Delivery process allows deliveries to be created so that the warehouse and shipping activities are carried out efficiently

• Once the system has created documents for picking, packing, and shipping, documents are transferred to Materials Management module

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Billing

• SAP ERP system creates an invoice by copying sales order data into the invoice document

• Accounting can print this document and mail it, fax it, or transmit it electronically to the customer

• Accounting records are updated at this point

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Payment

• When the customer sends in a payment, it is automatically processed by the SAP ERP system

• Timely recording of this transaction has an effect on the timeliness and accuracy of any subsequent credit checks for the customer

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Discount Pricing in SAP ERP

• When a company installs an ERP system, it can configure it for a number of pricing strategies

• Various kinds of discounts can be allowed

• As a safeguard, system can enforce limits on the size of discounts

• Condition technique • Control mechanism developed by

SAP to accommodate various ways that companies offer price discounts

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Customer Relationship Management

• Companies without a good connection between their workers and their customers run the risk of loosing business

• Customer relationship management (CRM) software can help companies streamline their interactions with customers

• On-demand CRM: software and computer equipment reside with CRM provider

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Core CRM Activities

• One-to-one marketing

• Sales force automation (SFA)

• Sales campaign management

• Marketing encyclopedias

• Call center automation

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CRM Processes

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The Benefits of CRM

• Lower costs

• Higher revenue

• Improved strategy and performance measurement

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