- Order Management: (e.g. SAP eCC, SAP R/3, Oracle ERP, SAP CRM). This is the typical realm of Enterprise Resource Planning Systems (ERP). Let's review the general process flow. After the customer accepted our quote he will send us a purchase order (PO) to order the products we quoted. When this happens we might need to check that the PO matches the quote we issued (e.g. same quantity as quoted, same price as quoted). These checks can happen automatically or manually. The Sales Reps probably also want to know when the order comes in since their Sales Compensation is tied to this order. When the order is created for Software Products the processing is somewhat easier since we don't need to check the availability of the product. This is true at least when the Software is electronically downloaded. When we still ship physical DVD's it's slightly different. But the availability check obviously needs to happen for physical products to ensure our customer receives the products as requested. There are a number of checks that happen during order taking (e.g. Credit Check from Dun & Bradstreet, Global Trade Compliance Check). In some cases there might be different order acceptance criteria for different products (e.g. every region might have other accpetance criteria). Note that the team that accepts the order might be different from the team that issued the quote, at least in larger companies. One specific note here is regarding professional services. There are two different flavors of professional services 1. pre-packaged services (e.g. training classes, certain services that are always charged the same amount). These services could be added to the configuration tools we reviewed last week. 2. custom services (e.g. consulting services to implement an SAP CRM system). These services will require a Statement of Work (SOW) to agree what services are included and what is not included. If these services are added to a product configuration tool they will require manual follow up (e.g. to link the physical/paper contract to this offering, agree how and when the services will be invoiced). Invoices for these services will most likely require different handling (e.g. VSOE/Revenue Recognition rules) than HW or SW products. One key task to keep in mind is how the CRM and the ERP system (that is where the order management traditionally sits) are integrated. Generally there are two approaches: Best of breed (e.g. quote in system A, order in system B) or Integrated systems (e.g. quote in system A, order in system A) approach. But that is too much for today's post and will be covered in a future post.
- Software Licensing Let's first clarify the difference between the Software (the bytes) and the Software License (the key that makes the software useable). By now the standard delivery method for Software is electronic, meaning our customers can go to our website and download the products they need. This can happen for demo purposes (e.g. first month is free, limited functionality for unlimited time) or for a regular download (license is paid from day 1 of usage). In order to use the downloaded software our customers will need (in most cases) a Software License Key. We can further distinguish between perpetual licenses (they don't need to be renewed) and temporary licenses (e.g. Demo License, 2 year license, 4 year license). An additional point is if a customer buys a new license or an additional license. Example: If a customer already has 50 licenses and they buy an additional 10 licenses then the new Software License key needs to be for 60 licenses. There are different ways how this can be handled for end customers and for business customers (e.g. they buy more than one product for more than one customer). All these processes should ideally be available on a webstore so that a customer can trigger the license key generation himself/herself w/o any support from us. Further it is desired to have only 1 License Key Generation tool (many Software companies have more than 1 due to merger & acquisitions etc.). Note that for Enterprise License Agreements (selling of the complete or large part of our Software Product Portfolio) a different handling is needed.
This was a lot for these two topics and so let's conclude the overview for today and continue this next week (to come --> upfront Support for HW and SW products, Support Renewal quotes and orders, Consulting and Education Services, Enterprise License Agreements)
