M0254 - ERP
(Enterprise Resources Planning)
Session 5
Sales and Marketing Information System
Ir. Ekananta Manalif, MM, MKom (D2664)
Jurusan Sistem Informasi Universitas Bina Nusantara

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

M0254 Enterprise Resources Planning ©2004

Learning Objectives
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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:
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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:
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Sources:
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Three unintegrated systems
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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
Receiving
Returns
Sales
Sales
Order
Fitter Snacker’s
Sales Process
Warehouse
Pick,
Pack and
Ship
Accounting Invoice
Payment
M0254 Enterprise Resources Planning ©2004

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

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

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

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

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

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

CRM Benefits
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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
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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
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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
M0254 Enterprise Resources Planning ©2004