IS-344Computing Applications in Business

Spring 2015

WEEK 4

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Agenda

Review

Discussion Questions

Week 4 Lecture

Final Project Update

Break

Teams Case Presentations

IS 344Course Schedule

Week Topic Reading Assignment Due#1 – Jan 26 Course Introduction Business Functions & Processes Chapter 1  #2 – Feb 2 (on line class)

Development of Enterprise Resource Planning Systems

Chapter 2 Discussion Questions 

#3 – Feb 9 Marketing Information Systems and the Sales Order Process Chapter 3 Discussion QuestionsTeam Case Study

#4 – Feb 16 Customer Information Systems Cust Relationship Management

Chapter 3 Discussion Questions

#5 – Feb 23 Production and Supply Chain Management Chapter 4 Discussion QuestionsPost company background

#6 – Mar 2 Accounting in ERP Systems Chapter 5 Discussion QuestionsTeam Case Study

#7 – Mar 9 Human Resources Processes in ERP Chapter 6 Discussion QuestionsCurrent Status Draft

#8 – Mar 16 SPRING BREAK No Class    #9 – Mar 23 Process Modeling, Process Improvements in ERP systems Chapter 7 Discussion Questions

Exam (3/27)#10 – Mar 30 Enterprise Architecture Implementing an ERP system Chapter 7 Discussion Questions #11 – Apr 6 Business Intelligence Chapter 8 Discussion Questions

Team Case StudyFuture State Model Draft

#12 – Apr 13 Mobile ComputingSocial Media

Chapter 8 Discussion Questions

#13 – Apr 20 Cloud Computing Chapter 8 QuizImplementation Plan Draft

#14– Apr 27 IT Security, Controls, Governance   Final Project Presentations#15- May 4 Course Summary   Final Project Presentations

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Review

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Chapter Three:

Marketing Information Systems and the Sales Order Process

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Figure 3-1 The sales process

Problems with Fitter Snacker’s Sales 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

• SAP ERP Sales and Distribution module treats the sales order process as a cycle of events:– Pre-sales activities– Sales order processing– Inventory sourcing– Delivery– Billing– Payment

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Pre-Sales Activities

• Customers can get pricing information about the company’s products:– Through an inquiry or a price quotation

• 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 processing: series of activities that must take place to record a sales order

• 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

• Critical steps in sales order processing:– Recording the items to be purchased– Determining the selling price– Recording the order quantities

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Sales Order Processing (cont’d.)

• Users can define various pricing alternatives in the SAP ERP system

• SAP ERP system checks the Accounts Receivable tables in the SAP ERP database to confirm the customer’s available credit

• If customer has sufficient credit available– Order is completed

• If customer does not have sufficient credit available– SAP ERP system prompts sales personnel to take one of the

possible appropriate actions

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Inventory Sourcing

• Available-to-Promise (ATP) check– SAP ERP system checks company’s inventory records and

production planning records to see whether:• Requested material is available• Requested material can be delivered on the date the customer desires

– Includes expected shipping time

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

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Delivery

• Delivery in SAP ERP system– 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– Debits cash and credits (reduces) customer’s account

• 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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Quiz

1. In the SAP ERP system, creating a(n) ____ means releasing the documents that the warehouse uses to pick, pack, and ship orders

Answer: delivery

2. In the SAP ERP system, a range of information is stored about each customer in multiple tables. These data are referred to as ____.

Answer: customer master data

3. The SAP ERP system allows a company to define various ways to group its customers and salespeople. These groupings are called ____.

Answer: organizational structures

4. To accommodate the various ways that companies offer price discounts, SAP has developed a control mechanism it calls the ____.

Answer: condition technique

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Discussion Questions

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Discussion Question 1

Assume you are the marketing manager for a large pet food company, such as Iams.

You need to launch a new marketing campaign.

What social media channels would you use for this campaign? How can CRM help your new strategy?

.

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Discussion Question 2

A CIO of a major pharmaceutical company once stated that the reason the corporation used ERP systems could be summed up in one word: control.

How does an ERP system give management control?

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Discussion Question 3

Assume you are a new summer intern at Fitter Snacker, working directly under the CIO. Your first job is to write a memo describing the poor information flow between three functional areas in the company: Marketing and Sales, Accounting and Finance, and Supply Chain Management.

Focus on the lack of information flow to and from Marketing and Sales, in particular.

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Customer Relationship Management

DefinitionCustomer Relationship Management is a business strategy that

aims to optimize customer interactions in order to maximize the success of business.

CRM is an holistic approach of business management basing on one data base. It integrates and optimizes all customer processes in Marketing, Sales and Distribution, Customer Service, Research and Development etc. on a company wide level. The aim of CRM is to create benefits for customers and suppliers regarding the life cycle of business relations. This implies that CRM concepts must emphasize permanent improvement of customer processes and life long learning of a company’s employees‐

IS 344SAP CRM as part of overall SAP Business Suite

IS 344CRM is geared to support customer processes

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CRM Analytics

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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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SAP’s CRM Software

• Examples of tools that provide CRM functionality within the SAP ERP system– Contact management tool

• To make sure that information about sales contacts is available throughout the organization

– Sales activity manager• Supports a strategic and organized approach to sales activity planning

and can help make sure that follow-up activities are accomplished

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SAP’s CRM Software

29Figure 3-13 SAP ERP contact manager

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SAP’s CRM Software

30Figure 3-14 SAP ERP sales activity manager

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SAP’s CRM Software (cont’d.)

• SAP ERP system processes business transactions and provides much of the raw data for CRM

• SAP’s Business Warehouse: system for reporting and analysis of transactional data

• Advanced Planner and Optimizer (APO): system that supports efficient planning of the supply chain

• SAP’s view of CRM is to provide a set of tools to manage the three basic task areas, or jobs:– Marketing, sales, and service

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CRM Architecture

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SAP’s CRM Software (cont’d.)

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SAP’s CRM Software (cont’d.)

• Four phases of the cultivation of customer relationship:– Prospecting– Acquiring– Servicing– Retaining

• Contact Channels

• Marketing and Campaign Management

• Campaign Execution Activity Management

• Campaign Analysis tool

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SAP’s CRM Software (cont’d.)

Figure 3-16 Marketing and campaign planning

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The Benefits of CRM

• Lower costs

• Higher revenue

• Improved strategy and performance measurement

IS 344CRM vs ERP

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Chapter 3 Summary

• 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

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Summary (cont’d.)

• Installing an ERP system means making various configuration decisions– Configuration decisions reflect management’s view of how

transactions should be recorded and later used for decision making

• 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

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Summary (cont’d.)

• Customer relationship management (CRM) systems– Build on the organizational value that ERP provides– Specifically increase the flexibility of the company’s common

database regarding customer service– Various kinds of CRM software are available– Can be installed in-house or on-demand

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Final Project overview

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Final Team ProjectEach Team will prepare an Applied Case Project, consisting of a 15-

20 page paper and a presentation. The project is the development of an Information Technology Plan for a small business, a non-profit organization or a department within a larger organization.

Objective• Create a Computer Systems Information Technology Plan.

• Each Team will select a small business, a non-profit organization or a department within a larger organization to use as the subject of the project and for which you will design an Information Technology Plan. In making the selection, choose a subject whose Information Technology Plan can be completed within the time constraints of the course..

• Once your group has selected the subject of the project, you need to begin the analysis of the current goals, objectives and operations of the business in preparation for the design of the Information Technology Plan.

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Project OutlineThe outline should be 2-3 pages and should contain a discussion of the current

operations, goals and objectives of the business being used as the subject of the project.

Current Status Assessment Write a 3-5 page Current Status Assessment. The paper should analyze the

current status of the use of information technology within your organization. The paper should cover the following topics:

• A description of the hardware in use within the organization. The description should include the quantity and types of various hardware devices and who uses them.

• A description of the software used within the organization. The description should include the software products in use from operating systems to applications.

• A description of the applications to which information technology is being applied. As far as possible, an analysis should be made as to the perceived effectiveness of each application.

• An analysis of the information systems organization, including size of staff, skill levels and primary responsibilities.

• Any organizational issues impacting the use of information technology within the organization.

Remember that the Current Status Assessment will also be incorporated into the team final written report. 43

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The report will consist of the following sections:• An overview of the business and its goals and objectives.

• An analysis of the ways in which information technology and computing applications can support the business goals and objectives.

• A Current Status Assessment of the information technology environment including hardware, software, computing applications, information systems, personnel and organizational structure.

• A model of the Future information technology environment required to achieve the business objectives, including hardware, software, computing applications, information systems, personnel and organizational structure.

• A prioritized list of specific projects required to implement the information technology model. Each project will contain information regarding the project objectives, resource requirements, costs and benefits, estimated time frames and potential risks.

• An implementation plan including support requirements, management tools and structure required to make the plan a reality.

• A bibliography.

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Team Case Studies