## Managing the eSales Cycle

### Alan Naumann

Calico Technology, Inc.
4 North Second Street
San Jose, CA 95113
Fax: (408) 975-7410
E-mail: anaumann@calicotech.com

Questions addressed in presentation:

- What is the eSales cycle?
- What is eSales?
- Why implement eSales into your supply chain cycle?

The audience will gain:

- An understanding of eSales and other customer-facing applications that are a critical link in the ERP chain
- Knowledge of what is required to add customer-facing applications to ERP system
- A concrete understanding of electronic sales as it differs from the common perceptions, and current practices of electronic commerce

Introduction

With the rise advent of the digital age, buying and selling has, for the end-user, become a far easier process. End-users, wWhether they are customers, sales reps, suppliers, distributors, or other links partners in your value chain, users expect to easily place, change and track and modify orders, have that order delivered to them with 100-percent perfect accuracyand to receive delivery, all with 100% accuracy and as instantaneously asthe speed of they have come to expect in an era of digital communications. suggests it should.

Forget about how complex it is to build and manage a system that can perform what was impossible 5 years ago -- your customers don’t care. Whether you're selling toothbrushes or turbine engines, your customers simply expect and demand seamless efficiency.

To match this demand, leading Enterprise Resource Planning (ERP) and Sales Force Automation (SFA) solutions vendors have been exhaustively searching through mergers, acquisitions, and best-of-breed partnerships for the Holy Grail of back-office solutions, what we call the customer-facing solution. To meet these demands, companies are seeking to extend their Enterprise Resource Planning (ERP) and Sales Force Automation (SFA) systems with more customer-facing applications. These new applications leverage these systems’ enterprise data and planning capabilities to help both the sales channel and customers find the products and service solutions they need, configure and price orders, and obtain up-to-date status and availability information. This This is thelink that brings the power of their back-office capabilities directly onto the screens of your customers. Simply, graphically, and seamlessly giving the customer an interface with which to access and interact with the data they most want…product, purchasing, shipping, compatibility, availability, and pricing information about your products.

The Supply Chain Cycle

On the back-end, ERP and other electronic business solutions have become critical to the supply chain—the lifeline—of businesses across industries. Transparent to the customer, these systems have been designed to help your companiesy better manage its resources, finances, inventories, and other supply chain mechanisms. Their primary function is to improve efficiency and trim costs from the manufacturing and supply processes.; Hhowever, they do not intrinsicallynothing to directly increase sales nor improve overall customer satisfaction.

ERP is indeed necessary for the enterprise, but it does not complete the loop of the supply chain and the sales cycle any more than a standalone SFA solution would. The bottom line is they do not provide what I previously referred to as the customer-facing application, the point at which the realm of electronic sales and the electronic sales cycle can begin.

Over the next half-hour or so, I will describe in more detail what the customer-facing application means, where eSales fits in, and how eSales solves the critically missing link in the supply chain and ERP cycle. Finally, through an actual case study, I will demonstrate, how companies have derived near immediate benefits from an eSales implementation.

What is eSales

eSales tools enable direct sales forces, telesales representatives, distributors and end users to analyze requirements, access marketing data, configure solutions, develop quotations, generate proposals, and place orders using the Internet, intranet, and laptop computers. An effective eSales solution allows customers to increase their competitive advantage at the point of sale, by expanding channels of distribution, reducing costs, boosting revenues, increasing customer satisfaction, and building brand.

Studies have shown that inaccurate quotations and orders can cost a company as much as 2% of total revenue annually. Leveraging technology to prevent mis-configured, mis-priced, or incomplete orders from entering the demand chain can also deliver valuable side benefits including increased customer satisfaction, reduced sales training time and cost, and higher order-to-quote ratios. Capabilities required to deliver the above can also facilitate an organization’s deployment of technology-enabled sales channels, including customers purchasing directly via the Internet.

Rationale for Integration

We have seen strong market demand for integrating configuration systems into ERP systems. Integrating customer-facing applications with back-office applications, businesses have the ability to enable direct sales forces, telesales, distributors and end users to analyze requirements, access marketing data, configure solutions, develop quotations, generate proposals, and place orders using the Internet, intranet, and laptop computers. The integration will allow your customers to increase their competitive advantage at the point of sale, by expanding channels of distribution, reducing costs, increasing customer satisfaction, and building brand.

Before the integration, a sales rep would have to process an order in the field via their laptop, then take the order back to the office and transmit to an order entry clerk. The order entry clerk would have to manually enter the order into the system. This process required a trained order entry clerk, allowed room for error in the transmitting process, and took additional time because two people (sales rep and order entry clerk) are processing the order.

With a direct eSales link, the sales rep captures the order on the laptop, hooks the laptop to the network and the order is processed. This direct link eliminates a manual step, thereby decreasing the number of mis-configured orders, and increasing order fulfillment.

Many ERP vendors have taken some initial steps to over come the above challenges, including recently added configurators to their offerings, these systems are designed simply to verify order accuracy. They are not customer-facing, fully-interactive eSales systems that can guide a customer from requirements to a solution. They handle only relatively simple configurations, are generally unavailable on the Web or to a disconnected laptop user, do not offer a model logic maintenance tool, offer minimal user guidance. More fundamentally, these systems are designed and architected from the ground up to serve the internal needs of a company-they were never designed to be truly customer-facing and customer-accessible. In short, these systems are inwardly-focused, back office order-checkers, not customer-facing interactive sales systems.

In contrast, eSales selling tools have the ability to help users who may lack detailed product expertise-such as sales reps, distributors and unassisted buyers over the Internet-to gather requirements and configure orders that are accurate and meet those requirements. Effective eSales tools provide requirements-based, guided configurations, immediate feedback, interactive feature and pricing tradeoffs, sales tips, context-sensitive Marketing Encyclopedia information and more-in short, a truly assisted selling paradigm as opposed to a data entry model. By combining these customer-facing applications with an ERP system, this integration (i) allows users to send completed quotes directly into an ERP’s order entry system, (ii) allows sales reps, distributors and other less sophisticated users to place accurate orders that meet customer needs, and (iii) provides the Web-based ordering infrastructure for electronic commerce systems, expanding sales channels and boosting profits and customer satisfaction.

Ease of Use

By definition, theUnlike an internal application, a customer-facing application must be easy to use, since your customers have neither the time nor inclination to use your applications. It is at this moment—at the point of sale—where your company, and the complexities of your ERP system, are interacting with the customer. Beyond being simply a front-end for the ERP system, customer-facing applications, such as eSales, must also be able to manipulate, massage, understand, and configure the data coming from the ERP.

In practical terms, these ease-of-use features extend configuration functionality to whole new classes of users.

Benefits of Integrating Front-Office to Back-Office Applications

Link Best-of-Breed eSales Capabilities to an ERP:

eSales tools capture customer requirements and interactively guide users to solutions that are accurately configured and priced to meet their needs. The resulting solution (in the form of a quote) can then be sent into an ERP’s order system, triggering the manufacturing, business and financial processes required to build out the order for the customer.

Benefits for all your sales channels, present and future:

An eSales solution is designed to support and work seamlessly with all your sales channels including unassisted electronic commerce buyers, direct sales reps with disconnected laptops, telesales, distributors, VARs and resellers.

Streamline Processes:

Integrating an eSales solution with an ERP system allows a company to enter quotes directly into the ERP order system, thereby a manual process is eliminated, speeding execution and making operations more efficient.

Simplify Data Maintenance:

The integration extracts data from the ERP system for use in an eSales configuration model. This provides a single point of data maintenance and avoids duplicative data, saving costs and reducing errors.

Avoid Duplicate Data Entry:

When orders from the field must be entered manually into an order system, the inevitable errors and omissions can wreck havoc on production processes and schedules, causing delays and customer dissatisfaction. By entering accurately configured and priced orders directly into an ERP order system, the integration eliminates these problems.

EXAMPLE: CALICO/ORACLE CASE STUDY

Situation

: Missing link in supply chain

Solution

: Integrate ERP system with eSales solution

Result

: Lower cost of sales, efficient access to new customers, satisfied sales force and end users

Calico Technology, Inc. and Oracle Corporation are teaming to meet these customer demands. Through Oracle’s Cooperative Applications Initiative, Oracle’s Design and Migrations Services organization works with Oracle Alliance members like Calico Technology to integrate complementary applications with Oracle Applications.

By providing a seamless integration of Calico’s eSales solution and Oracle applications, particularly Oracle Enterprise Resource Planning (ERP) systems, Calico and Oracle are combining Calico’s best-of-breed configuration, technology-enabled buying, and interactive selling technologies with Oracle’s world-class ERP applications.

Product Background

Oracle recently introduced its first-generation configuration module for its ERP system. This system handles simple configurations that don’t include composite modeling, and this system is not available on the Web, or for a disconnected laptop user. It does not offer a model building and maintenance tool such as the Calico eSales Configuration Workbench, provides very little user guidance, and lacks the functionality needed for an interactive selling system. Oracle’s functionality meets the needs of some customers, but for many that need more capabilities, the new Calico/Oracle integrated product offers a best-in-class, guided configuration tied into Oracle’s world-class ERP systems.

Before the availability of this new product, orders were entered into Oracle’s ERP system through Oracle Order Entry—a series of text-based screens designed for a knowledgeable order entry clerk. This system is currently unavailable over the Web or standalone on a laptop and provides very little user guidance—users must know details of the company’s products and how they are configured to use the system effectively. The benefit that Calico’s eSales configuration products bring to the integration is assistance for less knowledgeable users so that these users can configure orders that are accurate and meet customer requirements.

The Integration

Marrying Calico’s eSales solution with Oracle’s ERP applications extends a customers configuration and pricing functionality. Since Calico configuration solutions permit the same models to run over LANs, the Internet, and on disconnected laptops, this new Calico eSales Integration for Oracle products also extends functionality to those platforms. In addition, by using Oracle parts and pricing data in Calico models, the integration leverages existing data maintenance efforts and tools and avoids duplicate or redundant data. The integration will particularly benefit those companies that have compelling business needs to:

- Enable on-line buyers, distributors, and resellers to configure and order solutions over the Internet.

- Allow sales reps that operate in a disconnected environment to perform configurations at a customer site and then upload the resulting orders to Oracle Order Entry when reconnected to the network.

- Handle complex configurations, such as network configurations.

Integration Features

Data Extraction:

Automatically extract parts, product and other data from Oracle ERP for use in Calico models. Database views incorporate new data from Oracle and automatically populate Calico models built with pre-defined integration templates.

Order Entry:

Once a user has configured and priced a solution, the resulting quote is sent automatically to Oracle Order Entry. Any additional required processing (such as credit checks and the like) can be completed and the order entered into Oracle.

Enhanced Pricing:

The completed quotes can be priced using Calico’s eSales Pricer, providing accurate and up-to-date pricing for the order. The full quote, including products and parts ordered and final pricing information, is then sent to Oracle Order Entry.

Automatic Notifications:

The system can automatically put orders with conflicts on hold and send notifications to the appropriate persons to review the order. This adds great flexibility to the system since a qualified engineer may be able to approve a configuration that a sales reps may not.

Change Order Processing:

Process change orders in concert with Oracle’s change order processing rules.

Model Updates:

Templates for Calico configuration models map directly to the data extraction routines for Oracle, ensuring that models remain in synch with the latest enterprise parts and product data.

Order Creation

Order Creation allows customers to use Calico’s eSales products to interactively create a product or service solution, obtain a quote for that solution, and then order it, all without further human intervention. "Ordering" entails passing Calico quote information to the proper data formats into Oracle’s Order Entry Application. This makes the order information available to other Oracle Applications such as Oracle Manufacturing and Oracle Financials. Order creation functionality will be available over the Web, over intranets and LANs, and using remote synchronization software, for the disconnected mobile user.

Data Extraction

Oracle Applications stores product, part, pricing, discount, customer and other data that may be used within a Calico model. Many customers prefer to keep this data in Oracle relational databases, are comfortable with the Oracle formats and security, and prefer to use familiar Oracle data maintenance tools. Importing this data into the Calico model eliminates the need for separately maintaining this data in the Calico product. However, the Calico Workbench greatly simplifies the maintenance of configuration rules and logic. Thus, in the integrated product, a hybrid approach is used in which basic model data (products, parts, pricing, etc.) is maintained and stored in the Oracle product while model logic is created and stored in the Calico product. The Data Extraction module allows customers to leverage the strengths of both Oracle and Calico products by importing Oracle data into Calico models.

The Data Extraction module will extract data from Oracle Applications’ data tables and translate that data into an appropriate format for use in Calico models. Because customer implementations of Oracle Applications differ, the Data Extraction module will complete the following actions:

- Extract data from the most frequently used tables and structures
- Allow rapid customization to fit the customer’s environment

The Data Extraction module is comprised of two main parts. The first part consists of Select Statements. These are pre-written SQL queries designed to extract the data from Oracle Applications tables that is needed to run Calico eSales configurations and provide the necessary inputs for Order Creation. The second part consists of the Model Templates. These represent an imposed-base structure for the Calico models that will be linked to Oracle applications. This structure will contain the minimum required classes, class structures, and pre-defined Calico product functionality required to run the configuration and to provide the necessary inputs to the Order Creation module. In short, the Select Statements provide the parts and product data from Oracle Applications to "fill in" the data structures in the Calico Model Templates. Additional model complexities (classes, properties, configuration logic etc.) can be added on top of this base structure with the Calico eSales Configuration Workbench without affecting the integrity of the basic integration.

Change Order Processing

Sales reps and Web-based customers can make changes to an existing order only when the change order business rules in the Oracle application permit this action. That is, at some point in the order cycle, an order’s status moves to "frozen" and no further changes are permitted. This status is determined according to the company’s business policies and might be set to begin when manufacturing begins or when the product is completed. As long as a change is permitted, the user will be able to recall the prior quote, reconfigure it, get updated pricing, re-submit the order, and receive confirmation that the change has been accepted. In the integrated product, this transaction occurs with a minimum of data re-entry.

Customizing an Integration

There is simply no such thing as a completely "out-of-box" integration into a complex application suite like Oracle ERP. Oracle has many optional and user-defined fields, customers differ in how they use items such as "smart parts," and business processes differ. However, this integration template and related methodologies should cover many if not most customer integration needs and will provide a ready framework for further tailoring integrations to specific customer implementations. All of which will make the benefits of integration available faster, at less cost, and with easier maintenance than a fully custom integration.