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Chapter 3
Chapter Summary
• Fitter Snacker’s unintegrated information systems are at the root of an inefficient and
costly sales order process. Because information is not shared in real time, customers are
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often asked to repeat initial sales order information. As an order is processed, errors in
pricing, credit checks, and invoicing frequently occur, presenting a poor company image to
customers. Integrated ERP software would help Fitter avoid errors by storing all customer
data in a central database that is shared in real time by all company employees.
• 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, so tracking an
order’s status (partial shipments, returns, partial payments, and so forth) is easily
accomplished.
• Installing an ERP system means making various configuration decisions, which reflect
management’s view of how transactions should be recorded and later used for
decision making. For example, the system can be configured to limit selling price
discounts, thus avoiding unprofitable pricing.
• An ERP system’s central database contains tables of master data—relatively
permanent data about customers, suppliers, material, and inventory—as well as
transaction data tables, which store relatively temporary data such as sales orders and
invoices.
• Customer relationship management (CRM) systems build on the organizational value
ERP provides; specifically, they increase the flexibility of the company’s common
database regarding customer service. Various kinds of CRM software are available,
some from ERP vendors (including SAP) and some from third-party software
companies. CRM software can lead to operational savings, but most companies buy it
because they believe that creating better customer relationships will result in higher
revenue. Uses of CRM have evolved since the software was initially launched; what
began as a customer contact repository has extended its capabilities to include
sophisticated business intelligence. CRM can be installed in-house or on-demand.

Key Terms

audit trail delivery
condition technique document flow
customer master data material master data
customer relationship management (CRM) on-demand CRM
software organizational structure
data mining

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