M ERP (Enterprise Resources Planning) M ERP (Enterprise Resources Planning) Session 5 Sales and Marketing Information System Ir. Ekananta Manalif, MM, MKom (D2664) Jurusan Sistem Informasi Universitas Bina Nusantara

M0254 Enterprise Resources Planning ©2004 Marketing and Sales Determine pricing Take customer orders Create sales forecast

M0254 Enterprise Resources Planning ©2004

Learning Objectives Describe the unintegrated sales processes of company (Fitter Snacker’s). Explain why unintegrated Sales and Marketing information systems lead to company-wide inefficiency, higher costs, lost profits, and customer dissatisfaction Discuss sales and distribution in ERP system, and explain how integrated data sharing increases company-wide efficiency Describe the benefits of Customer Relationship Management software, a useful extension of ERP software

M0254 Enterprise Resources Planning ©2004 Marketing Personnel make decision on: What products should we produce? How much of each product should we produce? How are our products best promoted and advertised? How should our products be distributed? What price should we charge?

M0254 Enterprise Resources Planning ©2004 Problems with Fitter Snacker’s Sales process: Sources: Three unintegrated systems Sales Order System Warehouse System Accounting System Manual handling of transactions Information not available in “real time”

M0254 Enterprise Resources Planning ©2004 Fitter Snacker’s Sales Process Quote Sales Order Sales Order Pick, Pack and Ship Pick, Pack and Ship Invoice Payment Returns Sales Warehouse Accounting Receiving Fitter Snacker’s Sales Process

M0254 Enterprise Resources Planning ©2004 Sales Quotations and Orders Sales call Hand-written quote on 3 sheet form faxed to sales office Customer calls 800 number to place order

M0254 Enterprise Resources Planning ©2004 Sales Quotations and Orders Problems Salesperson error in preparing quote manually Customer call reaches sales office before faxed quote Faxed copy is illegible Delivery data requires call to warehouse Warehouse provides delivery date estimate

M0254 Enterprise Resources Planning ©2004 Sales Quotations and Orders Problems Initial credit check uses paper process Credit check for established customers using accounting printout that may be a week old.

M0254 Enterprise Resources Planning ©2004 Warehouse/Order Filling Packing lists/shipping labels manually sorted Small order process and large order process Inventory managed by Access database

M0254 Enterprise Resources Planning ©2004 Warehouse/Order Filling Problems Picker may not report breaking case down for small order Perishable product requires low inventories Out of stock decision: Partial shipment Change production schedule Wait until full order can be shipped

M0254 Enterprise Resources Planning ©2004 Accounting and Invoicing Sales order data transferred by disk to PeachTree program 3 times per week Clerks must make manual adjustments for partial shipments and other errors. Invoices may not always match actual product shipped

M0254 Enterprise Resources Planning ©2004 Payment and Returns Problems Customers don’t always include copy of invoice with payment Invoice may not match payment-reconciliation required Returned Material –Paper process, sometimes no RMA # Improper “dunning” letters

M0254 Enterprise Resources Planning ©2004 Sales and Distribution with ERP Sales and Distribution Process Pre-Sales Activities Sales Order Processing Delivery Billing Inventory Sourcing Payment

M0254 Enterprise Resources Planning ©2004 Pre-Sales Activities Inquiry or Quote (binding) Marketing Activities Tracking Contacts Sales Calls Visits Mailings

M0254 Enterprise Resources Planning ©2004 Sales Order Processing Activities required to record a sales order Incorporate data from inquiry or quote Automated Pricing and Discounting Automate Credit Check

M0254 Enterprise Resources Planning ©2004 Inventory Sourcing Check of inventory, orders and production to see if order can be delivered when customer desires Includes shipping and considers weekends/holidays

M0254 Enterprise Resources Planning ©2004 Delivery Releasing documents to warehouse to initiate pick, pack and ship Sequenced and grouped for warehouse operation efficiency Materials Management module carries out picking, packing and shipping

M0254 Enterprise Resources Planning ©2004 Billing Sales order data copied to invoice Can be printed and mailed, faxed or transmitted electronically Accounting records updated

M0254 Enterprise Resources Planning ©2004 Payment Payment may be physical check or electronic Cash debited and customer account credited Quick processing avoids credit check problems

M0254 Enterprise Resources Planning ©2004 Sales Order Entry in ERP Sold-to party P.O. Number Required Delivery Date Material Order Quantity

M0254 Enterprise Resources Planning ©2004 Master Data Master data is stored in a central database that is accessed by all modules Customer Master Data and Material Master Data are primary data sources for Sales Order Processing

M0254 Enterprise Resources Planning ©2004 Organizational Structures Organizational structures allow the ERP system to control the sales order process – pricing, minimum orders, etc. Distribution Channel defines the way that materials move between the company and customers Wholesale Distribution Channel Direct Sales Channel

M0254 Enterprise Resources Planning ©2004 Document Flow in ERP All documents related to original sales order

M0254 Enterprise Resources Planning ©2004 Document Flow Sales order process creates numerous documents - Sales Order- Invoice - Delivery- Payment - Goods Issue- RMA Document Flow links all documents related to a sales order

M0254 Enterprise Resources Planning ©2004 Discounts in ERP System Sold-to party P.O. Number Required Delivery Date Material Order Quantity

M0254 Enterprise Resources Planning ©2004 Discount Pricing in ERP ERP system can be accommodate various discounting schemes Calculates correct discount based on customer and material

M0254 Enterprise Resources Planning ©2004 Integration of Sales and Accounting Sales order processing transactions make appropriate accounting entries at time of transaction-automatically

M0254 Enterprise Resources Planning ©2004 Customer Relationship Management (CRM) ERP provides means to manage all data relating to a customer to improve the quality of the interaction CRM Activities include: One-to-One Marketing Sales Force Automation Sales Campaign Management Marketing Encyclopedias Call Center Automation

M0254 Enterprise Resources Planning ©2004 CRM Benefits Lower Costs due to better use of sales and marketing resources Higher Revenue by improving the effectiveness of marketing efforts Improved strategy and performance measurement by changing management and staff focus

M0254 Enterprise Resources Planning ©2004 Chapter Summary Fitter Snacker’s unintegrated information systems lead to inefficiencies and reduced customer satisfaction An ERP system like SAP’s R/3 views sales as a process, providing timely, accurate data and automating error-prone tasks

M0254 Enterprise Resources Planning ©2004 Chapter Summary Configuration decisions must be made during installation to match the company’s practices and policies The ERP system’s central database maintains master data used by all areas of the company CRM software builds on ERP data to improve marketing effectiveness