SAP has designed an R/3 application module for business functionality in every business area in a company. R/3 application modules are integrated. So when a change is made to one application module, R/3 automatically updates the corresponding data in the other application modules. The automatic update of information in R/3 occurs as soon as data is entered into the system. This is referred to as “real-time” processing.

The application modules are integrated into a work flow business events and processes across department and financial areas. Any business that wants to fully integrate its business processes must use on source for customer, product, and supplier data. R/3 allows for this by providing a set of master records for the enterprise. This means that an entire company can share the same customer or material information that is entered in the R/3 master records.

The integration of application modules in real-time allows all the employees in your company to see the most up-to-date information in real-time at their desktops. It also reduces data redundancy. Globalization is one of the biggest challenges facing any organization seeking to integrate its business processes. A business system must be capable of supporting all of an organization's offices, across the globe. The R/3 system has no organizational or geographical boundaries. It is designed for international use and supports multiple languages, currencies, and taxation systems.

To examine what application modules do and how they connect to each other in more detail, let's take a look at the following application modules:

• Sales and Distribution (SD)
• Materials Management (MM)
• Financial Accounting (FI)
• Production Planning (PP)

Let's say a customer has ordered 100 motors from your company XYZ. You use the Sales and Distribution (SD) application module to enter the customer's request for the motors into R/3. This is done by creating a sales order. Once a sales order has been created, the Sales and Distribution module generates a delivery document, which contains information needed to ship the motors.

For example, the delivery document informs warehouse managers which motors to collect from stock. Once the motors have been shipped, an invoice is created to bill the customer. Materials Management (MM) application module is now used for procurement and inventory management. Elements of this application module include:

• Invoice verification
• Material valuation
• Vendor evaluation

The Financial Accounting (FI) application module manages and reports on sub ledger accounts using a chart of accounts that is defined by your company. Examples of these sub ledger accounts include:

• The General Ledger
• Accounts Receivable
• Accounts Payable

The Production Planning (PP) module is used to plan and control the manufacturing activities of a company. Some of the elements of the Production Planning module are:

• Bills of materials
• Sales and operations planning
• Material requirements planning
• Production orders

Let's look at R/3 integration by examining how the Sales and Distribution application module integrates with other application modules when you create a sales order.

• When a sales order is created, integration occurs between the Sales and Distribution module and the Financial Accounting modules. This is because R/3 checks the customer's credit limit, which is stored in Financial Accounting. Another reason is that the creation of the sales order updates your company's cash forecast, which is also stored in the Financial accounting module.
• When you create a sales order, Sales and Distribution integrates with the Materials Management module. This is to verify that the ordered material will be available on the requested delivery date.
• Sales and Distribution integrates with the Production Planning module when materials entered on sales orders use a planning strategy, such as make-to-order. When this happens, R/3 automatically creates a production order in the Production Planning module.

Application modules share a common user interface and architecture. They are also navigated in the same way. So in addition to being integrated technically, they have an integrated look and feel.

Other R/3 application modules include:

• Controlling (CO)
• Fixed Asset Management (AM)
• Project System (PS)
• Work flow (WF)
• Industry Solutions (IS)
• Human Resources (HR)
• Plant Maintenance (PM)
• Quality Management (QM)
• Enterprise Controlling (EC)
• Investment Management (IM)
• Treasury (TR)
• Service Management (SM)

When R/3 is first installed, each application module will need to be customized to suit a company's business needs. The groups of employees from a company who implement and configure R/3 are commonly called the project team or the implementation team. Sometimes companies implement a core group of R/3 application modules, and then add additional modules or functionality over time.

Project teams can customize R/3 tables, reports, and interfaces. R/3 project teams configure the application modules to increase the efficiency of a company's business processes. R/3 can process and generate information in several ways.

Batch input is R/3's standard method for entering a large number of records from legacy systems or routine interfaces. The R/3 business work flow links company-specific work processes to the business processes of R/3. The business work flow processing capability is a way an R/3 event can trigger one or a number of other events. Work flow applications control the flow of information and documents from one work center to another.

Let's see how the business work flow applies to handling a customer order. When a user is processing a sales order for a customer who has exceeded their credit limit, a supervisor might need to approve the acceptance of the order. As a result of R/3's business work flow, a message is then sent to the supervisor's inbox. The message informs the supervisor that a sales order is waiting for credit approval (Each user on R/3 has an inbox that is part of the R/3 mail system. This mail system handles internal and external mail, system notifications, and work flow items).

R/3 records business transactions and activities by creating documents for them. This is called the document principle. R/3 uses the document principle to record information for the business activities your company carries out.

A key feature of successful business integration is that information should be entered only once. R/3 facilitates this requirement by rolling information down the business process. Rolling information means that the system copies or transfers data from one document into another, thereby reducing data entry and making problem resolution easier. For example, during the customer order management process, information in the sales order, such as the customer name, materials or services requested, and so on, is copied into the delivery document. And all the information from the sales and delivery document is copied into the invoice.

The management of a company needs to be able to retrace the steps of a business process in order to see what caused a situation. They can do this because all R/3 documents are linked and because R/3 has drill-down capability. Using drill-down capability, one can establish the document numbers of all documents connected to a sales order.

The chain of documents in R/3 is called the document flow. The document flow provides the history and status of related documents in R/3. The output processing capability allows to exchange information between a company's business partners and employees. One way you can use the output processing capability is to send confirmation of an order to a customer. Another way you can use it is to bill a customer for a delivery.

R/3 provides several ways to send and receive information. R/3 provides several ways to send and receive information. These include:

• Print
• Fax
• E-mail
• EDI (EDI is the acronym for Electronic Data Interchange. It is a standard for the transfer of data between companies using networks such as the Internet).

The information that is sent to business partners using R/3 defaults from the electronic documents contained in the R/3 system. For example, much of the information entered on the sales and delivery document is transferred to the invoice.

The conditions processing capability allows a company to decide how R/3 will calculate the values of company-specific data or process a document in the system. Conditions are used to determine prices, discounts, surcharges, requisition release strategies, and work flow output.

Let's say your company manufactures engines and has created a condition to price them. Suppose a customer would like to order engines from your company and that you must create the sales order. Because a condition has been created to price engines, the price of the engines will default into the sales order. This saves you from having to enter a price manually.

The reporting tools in R/3 are flexible and meet internal and external reporting requirements. Reporting tools are useful for analyzing your company's performance so you can develop future business plans. R/3 includes two types of reporting - Standard reporting and Information Systems reporting. Standard reporting allows users to view transaction level data in each R/3 application. Information Systems reporting allows users to view summary-level statistical data from R/3 applications and external applications. This means a single report can display information from different application modules.

One can import data or export R/3 reports to external systems. One can import or export reporting data to and from Microsoft Access, Microsoft Word, Microsoft Excel, and many other applications. One can run reports for the whole of your company or for sections of it. It is possible to create a report for a section of your company by specifying which organizational unit you want to report on. Organizational units identify the hierarchical structure of an organization.

Let's say your company has divisions in the USA, Canada, and the United Kingdom. Each division forms an organizational unit called a "company". A company is an SAP term for an independent legal entity. A company can be further defined into smaller organizational units, such as plants and purchasing organizations.

R/3 provides a number of standard reports. However, one can also define your own reports to display information in a way that suits your company's needs. The archiving capability allows you to transfer information from R/3 onto storage media. To do this, one can use the ArchiveLink application. ArchiveLink is a communications interface between the R/3 system and an optical archive system. This allows you to store R/3 documents on optical disks that can't be overwritten.

Customers are expecting higher-quality goods, better service and quick delivery. This is where CRM comes in. How does CRM improve your relationship with customers? Some examples of its value to your business include expediting responses to customer inquiries, increasing company knowledge of customers, and identifying profitable business activities. With the information gained from a CRM system you'll receive customer feedback to improve products or services. This means sharing information with your partners to ensure customer satisfaction.

What's the value of implementing a CRM?

Your knowledge of your customers will grow. You will better understand your customer's needs and will therefore, be more able to meet those needs resulting in satisfied customers.

Your goods and services will improve based on input from your customers. Valuable feedback from your customers will allow you to more directly meet their needs. You will increase the speed of your response to customer concerns. This will result in happy and loyal customers, which, in turn will impact your company's bottom line.

“There is only one boss: The Customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.” - Sam Walton.

Customer Relationship Management puts the business focus back on the customer, where it belongs. CRM combines business process and technology to create a better understanding of customers.

CRM helps identify new customers and retain existing customers. To reach consumers who will truly benefit from your services, its important that marketing campaigns define clear objectives and goals directed at an appropriate audience. This audience is defined through CRM.

Marketing team uses CRM to identify commonalities among clients. With this information, the company's marketing strategy becomes more focused and effective.

Sales team as a consequence notices the number of new customers and profits from existing customers increases as the company improves its ability to meet client needs.

CRM can create personal approach to customer service. CRM allows you to customize relationships with individuals to provide a higher level of service. An effective CRM system will help you exceed your customers' expectations by offering them what they need, when they need it - before they have to ask for it.

CRM helps to create a personalized approach:

• Ease the exchange of information throughout every department in a company
• Personalize interactions with consumers to increase customer satisfaction
• Assist in pinpointing potential clients and monitoring relationships with current clients

In a nutshell, CRM will assist you in identifying new customers and retaining existing customers. It will streamline information exchange, and it will customize relationships with individuals to provide a higher level of service.

CRM won't make you smarter; it will help you serve your customers by identifying their expectations CRM focuses on enhancing service to exceed your customers' expectations. How is this accomplished? By allowing all departments' access to the same information. The second goal of implementing a CRM system is using integrated information to create top-quality service. Customers don't want to repeat the same information over and over to everyone they speak with. You'll save time and minimize customer frustration by sharing information internally.

Research has shown that it costs 6 times more to sell to a new customer than an existing one, and your odds of selling to an existing customer are 50% better than selling to a new one

Goals of implementing CRM:

• To create a sense of loyalty with your customers
• To realize higher profits through netter customer relationship
• An effective CRM system takes the customers' view, not the products' or company's view

There are three stages in CRM. None is more important than the others, but you will need to make one your primary focus - without abandoning the other two.

• Acquiring new customers
• Increasing the profitability of existing customers
• Retaining existing customers

The first stage of CRM is acquiring new customers. Through existing customer testimonials, product quality and availability convenience, and innovation, you can attract new customers to your company.

The next stage of CRM is increasing the profitability of those existing customers. Enhancing your relationship through cross-selling and up-selling offers the consumer great convenience at reasonable costs. If you have everything the customer currently needs, make sure he knows it.

To truly see the benefits of the customer/seller relationship, you must sustain customer loyalty. The third stage of CRM is retaining existing customers. Not only do you have to offer products the market wants, but you must also offer what your customers want. Your goal is to retain your customers for life. Many companies focus in this aspect of CRM because the greatest percentage of sales comes from existing customers.

Focusing a company's goals on customer satisfaction is a major benefit of CRM. Another advantage of implementing CRM is that it redefines marketing strategy so that it is more effective Transforming to a CRM system aligns your organizational structure with actual business operations A key advantage of implementing a CRM system is that it re-concentrates the single focus of product performance onto the customer CRM is a bridge linking an organization to its valued customers Implementing a CRM system dramatically affects everyone involved. It requires a political, cultural and organizational change. CRM cuts a wide swath across the entire organizational body that it demands a more cohesive approach toward meeting goals Current incentive systems may work against CRM because they reward only a portion of the customers' relationships with the company. Therefore, your organization may lack an incentive program that supports a CRM system.

The challenge of implementing a CRM involves the cultural resistance to the change it requires. You also need to embrace the international market and create an infrastructure to facilitate the new system.

To find out what your customer wants, you need to understand and identify the elements of the CRM loop. The CRM loop is the fundamental cycle of activity that drives CRM programs:

• Comprehension and Differentiation
• Development and Customization
• Interaction and Delivery
• Acquisition and Retention

The four stages of CRM loop are an interdependent and continuous cycle of activity. All your initiatives and objectives must be intrinsically connected to this core cycle of action to get the best results.

As you transition from one stage to another, you will become more adept at implementation processes and achieve deeper insights that will improve each successive effort.

So how does the CRM loop work? What are the purposes of the four stages? And how do they interrelate with each other? This underlying core of activity will be your primary method for gaining knowledge and understanding your customers. The CRM loop will also help you decide what subsequent actions to take. This helps you identify, connect, and hold on to your most valuable customers.

Comprehension and Differentiation: As you learn, you will be able to zero in your valued customers quickly. And you will also attract new ones with similar learning's. Retention comes by listening vigilantly so you are prepared to modify your services when customers change their preferences.

Development and Customization: Use analysis and research to comprehend what your customers' value. Then use your understanding to show customer that your organization is differentiating its service based on what they have told you and what you have learned independently.

Interaction and Delivery: A basic principle of CRM is to develop products and services based on customers' needs and expectations. Although most companies can't afford to customize products for individual customers, they can customize their products for a proven customer sector. Acquisition and Retention: Besides marketing and sales channels, customers interact in many ways with your organization, including shipping and distribution and customer service. With new information, you can progressively enhance the value you deliver to your customer.

Value is the quality of product, the service, the convenience, the ease of use, the responsiveness, and the excellence of customer service. Value isn't just about the price of the product.

A customer interacts with an organization in many ways, including shipping, distribution, and customer service.

The infrastructure provides the solid foundation, but the core competencies provide the heart and soul of a successful CRM system. It is here that the philosophy of CRM is expressed. The first vital core competency is the fine art of up-selling. Up-selling in a CRM environment means identifying your customer's needs and then matching their needs and then matching their needs to complementary products and services. The result is a richer, more profitable customer relationship.

One aspect of up-selling is event-driven marketing. By implementing up-selling software, you can track customer contacts and establish triggers to identify prospects for additional sales.

A second core competency of a successful CRM system is direct marketing. Direct marketing is the pre-sale interaction with potential customers. This involves the use of advertising techniques to influence and provide your customer with the information needed to make a purchase decision. As your business grows, you will be deluged with requests for information; be sure to manage the fulfillment end of this potentially overwhelming process.

The third core competency of a CRM system is customer service. The goal of an effective customer service program is to provide support and to assign, create, and manage service requests for the customer.

Walking hand in hand with customer service is field operations, the fourth core competency. Field service is the hands-on extension of customer support. It comes into play when a problem cannot be solved over the phone. In a nutshell the core competencies of CRM are:

• Up-selling
• Direct Marketing
• Customer Service
• Field Operations

To involve the entire organization in CRM, you must be able to identify the benefits of such a system. What are these benefits? An effective CRM system will help you remain ahead in competition, tap into the worldwide market, instill loyalty in your customers, decrease cost, and increase profits.

Integrating a CRM system will help you decrease costs and increase profits, tap into the worldwide market, and remain ahead of the competition Effective sharing of client information throughout a company is a key ingredient for successful CRM Some examples of CRM information sources are:

The Internet: tracking visits to your website can give you a good idea of what customers are looking for some pages might get more hits than others indicating a demand for certain products. Using this information within a CRM. framework will help you focus on customer needs.

Customer Surveys: Surveys can be given online or through the mail. An effective CRM system can take this information and make it available to marketers, sales people, and customer service people. With a clear understanding of customer needs, each department is more likely to meet those needs.

Customer Purchasing Habits: With data mining and other techniques, you can learn what your customers buy from you. What are your top selling items? Who's buying them? What isn't selling? Answers to these questions and more lie in customer purchasing habits.

Customer Service Calls: Anytime a customer calls you is an opportunity to learn more about him. A CRM system designed for your company can help service representatives increase knowledge of your customers.

The second way to understand your customers is to integrate customer information into your company's system. This allows everyone access to customer information. Marketers can identify customer demographics. Sales people can generate new leads based on customer buying trends. Customer service based on the information gathered.

The Internet is driving a revolution of one-to-one marketing and mass communication Effective sharing of client information throughout a company is a key ingredient for successful CRM The first key to successfully implementing CRM is Integrating Internal Business Processes Creating a seamless flow of information throughout your own company isn't always enough.

You should include external business partners in your information stream. Sharing customer information is essential to meeting your customers' needs. Consider third party suppliers and vendors as an extension of your business, and use them to provide solutions for your customers. A CRM infrastructure using Web-based applications can eliminate communication hassles and cost overruns.

To successfully create your own CRM infrastructure, you must integrate computer systems. These systems are known as “enabling technologies” that work together to provide more fluid CRM system.

With more powerful applications in the future, this integration might not be necessary, but because methods of delivering information are so varied, you need a CRM solution that can handle information across al delivery channels.

Legacy Systems: Many companies rely on 20year old systems that cannot simply be replaced. Because of this fact, special software tools, such as “middle ware”, become part of the CRM solution. This software helps integrate old legacy systems with new CRM applications. Computer Telephony Integration (CTI): CTI is used to manage incoming calls. It allows information about a caller to be entered into a CRM data repository. This information becomes a valuable part of the entire CRM process because it helps determine what solutions the caller requires.

Date Warehousing: With all the information gained through CRM, data warehouses become invaluable tools. Not only do they store the enormous amount of information you have gathered, but they also supply you with the material needed for customer research. Data warehouses offer customer data for later analysis.

Decision Support Technology: You need a way to analyze the information in your data warehouse. Decision support technology is a set of analytical tools that help you make decisions based on accumulated customer data. You won't get the most out of your CRM system without these tools.

A CRM system creates a new approach to customer service. To ease the transition, everyone in the organization must understand and contribute to the CRM process.

The first step is involving the entire management team is to establish the CRM strategy throughout the company. Adopt an approach that is consistent with your company's overall approach to its business. Involve leaders from marketing, sales, IT, and customer service. Discuss their future goals and explore ways that CRM can help them meet these goals.

The second step is involving the entire management team to define your CRM integration goals. Identify how you'll track your customers; what software is most appropriate, what vendors can help you, etc. Understand your customers and create a business plan to meet their needs. Once you have defined your vision and established a strategy, its then time to measure company readiness. This is the third step for involving the entire management team.

The final step in involving the entire management team is to monitor progress through stages. Because of the complex nature of CRM, approaching is through stages will create a better chance of success. Create a time line for strategy evaluation. Set milestones you hope to reach and continually check your progress.

Through an effective E-CRM system, you can personalize interactions with your customers and expedite the closing of business transactions.

E-CRM and data mining systems help personalize interactions with customers. It also creates interactions with customers. It also creates interactions based on relevant customer information, and expedites business transactions.

E-CRM makes it possible to recreate the customer service of the past. Companies can use technology to combine a personal touch with customized service and the illusion of the one-to-one shopping of the past. The four features of e-CRM are:

• Information Analysis
• Customer Personalization
• Direct Marketing
• Simplified Transactions

The first feature of E-CRM is information analysis. With e-CRM, your ability to collect and analyze information is more efficient. It will help you determine inventory sizing, product pricing, sales items, credit policies, and other business decisions. With the analysis you will be able to effectively use the second feature of e-CRM: Customer Personalization.

Individual relationships with customers can be created and maintained through e-CRM. An effective e-CRM system will gather customer preferences and ensure customer-made shopping experiences for each customer.

Technology allows mass-market efficiency with a personalized feel. You can recreate the shopping experience of a mom-and-pop store at minimal cost through the third feature of e-CRM: Direct Marketing.

Customers can order goals online and give you permission to send them additional personalized messages about new products, sales item, and other services you want to offer.

E-CRM allows you to simplify transactions, analyze information, and create effective direct marketing material.

Companies that focus on customer information and use that information to maintain relationships are most successful in the market place What is data mining? It is the process of analyzing enormous amounts of data to identify meaningful patterns. Data mining is used for:

• Research
• Process Improvement
• Marketing

Data mining is an important tool for lowering overhead costs. The first way data mining facilitates business operations is as a research tool. Research and Development is a costly process that can be streamlines and automated through data mining.

Data mining lowers costs from the beginning of the manufacturing cycle, during the research and development phase, by quickly shifting through vast amounts of information.

Manufacturing and inventory control is another area in which data mining can help your company cut costs. The second way data mining facilitates business operations is through process improvement. Data mining systems can monitor processes to ensure that variables are kept at expected levels. Huge amounts of measured data for the hundreds of variables can be monitored and corrected through data mining.

Although both research and process improvement; are valuable aspects of data mining, they are the least customer - oriented aspects of it. The most successful use of data mining is in marketing. This is the third way data mining facilitates business operations.

Data mining uncovers information that reveals buying behaviors of existing customers. All useful marketing information is available in your customer database. Data mining will help you sift (distinguish) through it all.

Data mining streamlines and automates research methods, improves business processes, and identifies valuable marketing information.

Customer databases are an unlimited source of information. They are important business tools, but there are technical aspects of data mining that require knowledge of algorithms, decision trees, and predictive models. Some technical aspects of data mining are:

• Decision Support Technology
• Directed Classification and Prediction
• Undirected Association, Clustering, and Recognition

The first technical aspect of data mining is decision support technology. Decision support covers the entire information infrastructure system that companies use to make informed customer decisions. It's based on recognized data patterns. Data mining helps, identify those patterns.

Data Warehousing: A data warehouse is a database that stores information from a variety of operational systems. It allows companies to view information as a single entity rather than as a collection of information bits.

Online Analytical Processing: OLAP databases are often speedier and more clearly organized than data warehouses, OLAP databases organize information along specified variables and allow for more precise analysis of the information they contain.

Integration of Decision Support: Facts churned out by databases and mainframe computers don't always create a vivid enough picture to create solutions. Decision support technology is a collection of software and hardware that allows you to visualize the information gained through data mining.

In data mining, you use data to build a model demonstrating how every record in your customer database can be categorized based on any combination of variables. This method is the second technical aspect of data mining: classification is the method of categorizing records in a database by predefined criteria - for e.g. assigning customers to specific purchasing categories. Prediction is taking the mined customer information, analyzing it, and predicting how customers may react in the future.

Undirected data mining is an automated process in which similarities among all records in a database of customer records are found. The third technical aspect of data mining is undirected association, clustering, and recognition.

Some technical aspects of determining are directed classification and prediction, undirected recognition and clustering, and data warehousing and OLAP In directed data mining, you use data to build a model demonstrating how every record in your customer database can be categorized, based on any combination of variables.