Chapter 8 - ERP Sales, CRM, Knowledge Management

Objectives

  • Understand activities supported by the Sales module of an ERP system

  • Comprehend the     integration of Customer Relationship Management (CRM) systems with ERP

  • Recognize various types of CRM analytics

Module Information Learning Objectives

  • Functionalities of the Sales and Distribution (SD) Module:

    • Name functionalities related to sales

    • Define organizational structures of the SD module

    • Summarize master data crucial for the SD module

    • Explain standard sales process steps

The Sales Process

  • Also known as:

    • Lead-to-cash process

    • Quote-to-cash process

    • Order-to-cash process

    • Order-stock-ship-bill

    • Revenue cycle

Steps in the Sales Process

  • Lead Generation: This involves identifying potential customers through various marketing strategies such as content marketing, social media outreach, and targeted advertising.

  • Qualification/ Prospect: After generating leads, the next step is to qualify prospects by assessing their needs, budget, and readiness to buy, ensuring that they align with our ideal customer profile.

  • Opportunity: This step involves recognizing viable sales opportunities by analyzing the qualified prospects and determining which ones have the highest potential for conversion based on their engagement and expressed interest.

  • Quotation:

  • Sales Order/Customer

  • ORder fulfullment

  • Cash Collection

Key Steps in Order-to-Cash (OTC) Process

  1. Order Entry

  2. Fulfillment

  3. Billing

  4. Collections

  5. Acquire Customer Disputes

  6. Customer Setup

Sales Order Process

Pre-sales Activities

  • Sales Order Entry

  • Check Availability

  • Pick Materials

  • Pack Materials

  • Post Goods Issue

  • Invoice Customer

  • Receipt of Customer Payment

Key Terms in Sales and Distribution (SD)

  • Business Partner: A person or organization with whom a company has a business relationship, such as a customer, vendor, or bank.

  • Available to Promise (ATP): A business function that provides a customer-deliverable quantity of a product based on current inventory, planned production, and expected materials.

  • Sales Quotation: A document sent to a potential customer detailing the prices for a product or service, often including terms of sale and delivery information.

  • Sales Order: An internal document that records a customer's request for goods or services, containing all the information necessary to process the customer's request.

  • Condition: In SAP SD, conditions represent prices, surcharges, discounts, taxes, and freight that are applied in sales documents.

  • Stock: The quantity of goods or materials available for sale or use.

  • Pick: The activity of retrieving goods from a warehouse or storage location to fulfill a customer order.

  • Delivery: The process of transporting goods from the seller to the buyer, often associated with a delivery document in an ERP system that contains information about the goods to be shipped.

  • Goods Issue: The physical movement of goods out of inventory, which reduces the stock quantity and often triggers cost of goods sold entries.

  • Billing Document (invoice): A document issued to a customer stating the amount of money owed for goods or services supplied, providing details of the transaction.

  • Incoming Payments: The receipt of money from customers in settlement of invoices for goods or services provided

Steps in Detailed Sales Process

Order Fulfillment (Warehouse)

  • Pick Process:

    • ERP determines picking data based on material availability and lead time

    • Perform physical picking

    • Record picking results (scan)

    • Confirm picking (scan)

    • Consolidate the complete order

    • Check the order

  • Pack Process:

    • ERP identifies packaging materials

    • Pack products into boxes and label them

    • Prepare packing slip

    • Stage order for shipping

  • Ship Process:

    • Assign shipment mode

    • Ensure compliance with weight and volume limits

    • Transfer title and ownership

    • Reduce warehouse quantities

    • ERP records entries for stock and goods sold

Key Documents in Sales Process

  • Sales Order: Internal document recording a customer's request for goods or services.

  • Picking Request: Document instructing warehouse personnel to retrieve specific items for a customer's order.

  • Packing Slip: Document enclosed with a shipment, listing items for recipient verification.

  • Bill of Lading: Legal document detailing goods shipped; serves as a receipt and contract of carriage.

  • Common Carrier Interface: System facilitating data exchange between a company's E RP/shipping system and third-party carriers.

  • Invoice: Document issued to a customer stating the amount owed for goods or services.

  • Remit Advice: Document from a customer to a supplier informing them of invoice payment.

Point of Sale (POS) Systems

  • Definition:

    • Terminals including credit card swipers, cash drawers, bar code scanners, and receipt printers.

  • Interaction with ERP Systems.

Customer Relationship Management (CRM)

  • Function:

    • Coordinate efforts of marketing, sales, and customer support.

  • Benefits:

    • Nurture and retain current customers

    • Attract new customers

    • Grow revenue

    • Centralize customer data and insights

    • Improve customer interactions across all channels

    • Enhance customer service

Differences Between ERP and CRM

  • ERP Covers:

    • Pre-sales activities, sales order processing, fulfillment, accounts receivable management.

  • CRM Covers:

    • After-sales support and service.

CRM Functionality

  • Marketing:

    • Target audiences and deliver personalized messages.

  • Sales:

    • Streamline sales processes.

  • Service and Support:

    • Enhance customer satisfaction and retention.

Types of CRM Analytics

  1. Event Monitoring:

    • Alerts users about specific defined events.

  2. Pricing:

    • Models for aggressive pricing based on consumer insights.

  3. Profitability Analysis:

    • Identifying high ROI segments.

  4. Profiling:

    • Identifying attributes about existing customer personas.

  5. Customer Segmentation:

    • Grouping customers by shared characteristics.

  6. Predictive Modeling:

    • Forecasting with current and historical data.

  7. Web Analytics:

    • Analyzing user journeys on web platforms.

Accountant's Perspective on CRM

  • Importance in:

    • Report generation

    • Budgeting strategies

    • Pricing strategies

    • Profitability assessment

SD Functionality

  • Core components:

    • Sales Support

    • Shipping and Transportation

    • Billing

    • Credit Management

    • Foreign Trade

Organizational Structure of SD

  • Client:

    • Independent environment

  • Company Code:

    • Smallest unit for legal accounting

  • Credit Control Area:

    • Monitors customer credit limits

  • Sales Organization:

    • Responsible for product/service sales

  • Distribution Channel:

    • Conduit for sales to customers

  • Division:

    • Grouping of products/services

  • Sales Area:

    • Combination of Sales Organization, Distribution Channel, and Division.

Global Bike Structure – Sales and Distribution

  • Overview of the client and company code structure for Global Bike.

Master Data in SD

  • Customer Master Data:

    • Contains essential information such as name, address, and payment conditions.

  • Material Master Data:

    • Covers costs and details necessary to manage materials in SAP.

  • Condition Master Data:

    • Encompasses prices, surcharges, discounts, and taxes related to materials.

Document Flow and Order Status

  • Tracking of status at any point in time within the order management cycle (Order-to-Cash).

Conclusion

  • Understanding the comprehensive structure and processes involved in SAP SD is crucial for improving sales operations and maximizing customer satisfaction.