Chapter 10 The Order Entry/Sales (OE/S) Process

Process Definition and Functions

Order entry/sales (OE/S) process is an interacting structure of people, equipment,

activities & controls that is designed to achieve certain goals
Primary function of the OE/S process is to create information flows that support the
following
o Repetitive work routines of the sales order dept., credit dept., & shipping dept. by
capturing, recording & communicating sales-related data (ex. on pg 344)
o Decision needs of those who manage various sales & marketing functions

Organizational Setting
A Horizontal Perspective

Refer to figure 10.1 which portrays a horizontal perspective of the OE/S process
Refer to table 10.1 for descriptions of horizontal information flows
o These two figures present a horizontal view of the relationship between the OE/S
process & its organizational environment
o The ultimate goal of the activities show in figure 10.1 is to create value for the
customer
Organization assign an owner (order-fulfillment process) to this process to
coordinate the process to ensure customer value expectations are met
o Figure 10.1 flow briefly explained on pg 346
2 important activities must be performed in a typical commercial operation where goods
are sold to ongoing customers
o Data maintenance must be performed to create a customer master record
including a credit limit
o Data maintenance must also be performed to create 1 or more inventory master
records, including sales prices
A Vertical Perspective

Refer to figure 10.1 to see a vertical perspective of the OE/S process

Managing the OE/S Process: Satisfying Customer Needs

Connecting with Customers with Web 2.0 and Cloud Computing

Web 2.0 is a set of tools that allow people to build social & business connections, share
information & collaborate on projects online (tools like blogs, wikis, social networking
sites)

o Marketing managers can utilize these tools to inform customers about new
products and reaching new customers
In Web 2.0, trust becomes the real differentiator & customers want trust companies as
they dont want to build trust all over again
o Transparency is 1 way to build this trust
It includes tracking orders, following up on e-mails & phone calls,
viewing an organization as one entity, including catalog, phone, web site
& using customer feedback innovation (ex. abt some companies on pg
349)
o Refer to Technology Application 10.1 on pg 349
Cloud computing is used to facilitate connections to customers, to improve customer
service, to reduce costs & to improve process timeliness
o Refer to Technology Application 10.2 on pg 350
Decision Making and Kinds of Decisions

Some typical questions marketing managers must confront on pg 350

Using Data Mining to Support Marketing

Data warehousing applications in organizations are usually viewed as being focused on

either operational or analytical applications
o Operational applications focus on providing decision makers with the information
they need to monitor & control their business process (ex. on pg 351)
o Analytical applications which include data mining are intended to allow the use of
sophisticated statistical & other analytical software to help an organizations
members develop insights about customers, processes & markets
o Refer to Technology Application 10.3 on pg 351
1 of the major analytical users of warehouse data is the marketing department
Mastering Global E-Business

E-business systems are broken into 2 categories

o Buy-side
Uses internet to automate & manage purchases & the vendors from which
these purchases are made
EDI, SCM, e-procurement, e-sourcing are mainly used
o Sell-side
Designed to allow a company to market, sell, deliver & service goods to
customers throughout the world through internet
Can handle both B2B & B2C business transactions

Can process many customer-related functions such as catalog browsing,

sales, payments, customer support & analytics
CRM is mainly used
Other softwares are marketing management, catalog management, epayment & order management

Customer Relationship Management (CRM) Systems

Concept behind CRM is to cultivate customer relationships by prospecting, acquiring,

servicing & retaining customers
CRM contact management facilitate the recording & storing of information related to
each contact the organization has with a client & the context of conversations or meetings
(ex. on pg 353)
CRM softwares also facilitates by matching sales promotions with customers buying
trends & forecasting future sales (ex. on pg 353)
CRM software also need support for customer servicing mainly automation for operators
handling customer support at call-in centers (ex. on pg 353)
CRM softwares also offer customer self-service (CSS)
o CSS allows a customer t complete an inquiry or perform a task within an
organizations business process without the aid of the organizations employees
(ex. on pg 353)

Logical Description of the OE/S Process

Logical Data Flow Diagrams

Figure 10.3 portrays the OE/S process in the form of a context diagram
o Refer to the process on pg 354-355
Figure 10.4 presents a level 0 diagram (physical DFD)
o Refer to the process on pg 354-355
Figure 10.5 presents a logical DFD
o Refer to the process on pg 355-358
Figure 10.6 shows Sales Order Inquiry Screen
o Refer to the process on pg 358-359
More on pg 359
Figure 10.7 is a lower level view of bubble 2.0 from figure 10.4
o Refer to the process on pg 359
Figure 10.8 presents a lower level view of bubble 3.0 from figure 10.4
Logical Data Descriptions

Customer master data contain a record of every customer with whom we are authorized
to regularly do business (includes unique customer #, name, address, telephone #,
industry, etc)
Inventory master data contain a record of each item that is stocked in the warehouse or
is regularly ordered from a vendor (includes unique item #, unit of issue, weight, volume,
warehouse location, price, cost, etc.)
Sales order master data are created on completion of a sales order
o After goods have shipped, sales order master data is updated
o Includes the time & date of the picking, packing & shipping of the goods & who
completed each step
Logical Database Design

Refer to figure 10.9 for E-R diagram

o More on pg 362

Physical Description of the OE/S Process

Electronic Data Capture

Bar code readers are devices that use light reflection to read differences in bar code
patterns to identify a labeled item
o Warehouses also use bar coding systems for inventory racking
o FedEx & UPS uses bar coding systems also
Optical character recognition is similar to the way bar code readers work for pattern
recognition of handwritten or printed characters
o This fulfills a need where bar coding is not possible (ex. on pg 365)
Scanners are input devices that capture printed images or documents & convert them
into electronic digital signals
Digital Image Processing

Digital image processing systems are computer-based systems for the capture, storage,
retrieval & presentation of images of objects such as pictures & documents
o On pg 366, describes the major steps in a typical digital image processing system
Digital image processing system can make an electronic image instantly available
anywhere in the world where a connection to the system can be established (ex. on pg
366)
The OE/S Process

Figure 10.11 presents a systems flowchart of the model process on pg 367

o Process described on pg 368 (important read it)

Management Reporting

In online system that incorporates an inquiry processing capability, the need for regular
preparation of printed management reports is reduced or eliminated
o Each manager can use a PC to access a database & retrieve relevant management
information (ex. sales manager can access the marketing database at any time &
assess the performance of particular sales people)
o Refer to figure 10.2 which shows sample SAP sales analysis report

Application of the Control Framework

Figure 10.13 presents a completed control matrix for the systems flowchart in figure
10.11 (pg 367)
Control Goals

Following are the operations process control goals that are typical for the OE/S process
o Effectiveness of operations
Goals A, B & C in figure 10.13 identify 3 representative effectiveness
goals for the OE/S process
These goals relate to the reasons for which the process exists
These goals address the issue of satisfying customers & creditworthiness
o Efficient employment of resources
People & computers are the resources found in most business processes
o Resource security
Information process control goals make up the 2nd category of control goals in figure
10.13, following are the information process control goals
o Input validity (IV)
Example on pg 372
o Input completeness (IC) & input accuracy (IA) of sales orders & shipping
notices
Example on pg 372
o Upper completeness (UC) & upper accuracy (UA) of the sales order &
inventory master data
Example on pg 372