SAPMarkets INTERNETSALES 2.0

2Copyright 2001 SAPMarkets, Inc. All Rights Reserved.

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Making the most of the Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5The Internet as a strategic sales channel with SAPMarkets Internet Sales . . . . . . . . . . . . . . . . . . . . 5

SSAAPPMMaarrkkeettss IInntteerrnneett SSaalleess:: YYoouurr SStteepp iinnttoo tthhee IInntteerrnneett .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 66The Internet revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Internet Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Critical success factor Customer Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Key element of mySAP e-Business solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Global solution for global businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10One-step business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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UUssiinngg SSAAPPMMaarrkkeettss IInntteerrnneett SSaalleess TThhee CCoommpplleettee SSeelllliinngg SSoolluuttiioonn .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 1122Customer satisfaction through integrated sales processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Customer Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Searching for and selecting products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14One-to-one marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Product Configuration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Ordering products with a shopping basket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Flexible and secure payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Order processing and Order Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Reporting, Sales Intelligence and Web Shop Fine-Tuning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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5MMaakkiinngg tthhee mmoosstt ooff tthhee IInntteerrnneettThe Internet opens up new markets and sales potentials, candrastically cut sales costs, and bring about stronger, longer-lastingcustomer relationships. Companies of all sizes and from allindustries are moving forward to reap the benefits of this newsales channel. At the same time the Internet is an opportunity toredefine business processes and to gain a much stronger focus oncustomer requirements. Customers whether businesses orconsumers expect any webshop solution to be extremely user-friendly and simple, with strong personalization and interactivity.Also they expect their orders to be processed efficiently and reliably, with an integrated service proposition meeting themwhenever they commit to a vendor.

TThhee IInntteerrnneett aass aa ssttrraatteeggiicc ssaalleess cchhaannnneell wwiitthh SSAAPPMMaarrkkeettss IInntteerrnneett SSaalleessSAPMarkets Internet Sales is a cutting-edge e-commerce solutionfor companies that wish to develop the Internet as a strategicsales channel. The flexibly utilized SAPMarkets Internet Salescomponents enable your company to streamline and optimizeall related Internet sales processes, reduce processing times significantly, cut transaction costs, effectively intensify customercontacts, and strengthen customer relationships permanently.This is achieved by the unique interplay between an open, striking,customer-friendly Internet front-end, and excellent deep reachingback-end business integration. Scenarios include selling directlyto consumers, to business partners, or indirectly via market-places or high-end reselling models along the supply chain andvariations including third parties. The key benefits are: Streamlined business processes: Automated sales processes

(from order entry in the front end through to business execution in the back-end system) make for extremely reliableorder processing, while minimizing transaction costs and processing times. Built on the mySAP Customer RelationshipManagement platform additionally means that you can synchronize all touch points with your customers supportingmulti-channel strategies in an encompassing CRM strategy.

A Flexible, Fully Integrated, High-Performance Solution.SAPMarkets Internet Sales has been designed to give the highperformance and fast response times you need for an effectivee-commerce Website. The solution typically runs on a distributed software platform to spread the processing loadand prevent bottlenecks. The Internet front-end is entirely separate from the business logic back-end, so that changes tothe look and feel of your browser-based applications need notinterfere with the underlying business processes. The tightintegration between SAPMarkets Internet Sales and your back-end enterprise systems allows highly efficient one-step salestransactions, saving time and cutting administration overhead.

Marketing and Personalization. In SAPMarkets Internet Sales,focus is placed on fulfilling customer requirements. A multitudeof tools are included to show the specific profile product set,information, prices of your company to the customer (seg-ment) it is intended for. Sophisticated and attractive productcatalogs can be maintained for specific target groups and evenbe customized for multiple views for one business partner.Online questionnaires allow you to categorize customers intarget groups and to prominently position the most popularproducts. Customer data can also be leveraged to make proactive product recommendations or to optimize cross-sellingand up-selling offers.

Interactive sales dialogs: Whether by utilizing state-of-the-artsearch algorithms, a multitude of multimedia files on productrelated information, product accessories, online product configuration, available-to-promise information at time ofsale, status check of orders and invoices, or by offering a choiceof payment options, SAPMarkets Internet Sales offers a widerange of opportunities for customers to interact with the webshop offering and to become loyal users of the value-addedservices rendered.

EXECUTIVE SUMMARY

6 Creative Web design: The new SAPMarkets flow logic technology gives your Web designers the creative freedom they need to design a striking Web shop. It forms the basis for a flexible approach to your front-end environment, tying inneeded third-party components while enabling you to controlthe interaction between the customer, Web shop and businessapplications.

Supply-chain compliant. SAPMarkets Internet Sales is truly athome in the supply-chain environment offering the necessaryfunctionality and sophistication to deal with high-end auto-mated solutions. Additionally, the inclusion of third parties forlogistics and financial services as well as the ability to representreselling or vendor-managed inventory scenarios are keyrefinements to the standard solution. Scalability, a high levelof security and the flexible platform to integrate or communi-cate with other applications via open interfaces are traditionalSAP strengths and guarantee current and future success.

Marketplace ready: With the advent of aggregated multi-vendor,multi-buyer business hubs, it is essential to be able to play astrong role in positioning the enterprise in any of these newenvironments. In this case, the SAPMarkets Internet Sales isused as an on-ramp, with special functionality allowing topush content (product, pricing, product availability and con-figuration information) to these marketplaces, while easilyconnecting to their routing backbones for incoming purchaseorders and outgoing confirmations or advance ship notices.

SAPMarkets INTERNET SALES: YOUR STEP INTO

THE INTERNET

TThhee IInntteerrnneett rreevvoolluuttiioonnThe breakneck pace at which the popularity of the Internet isspreading is giving rise to massive and even revolutionary changesin the way business is done worldwide. Geographical and temporalrestrictions have disappeared to form a truly global, constantlypulsing business environment. New business models have foreverchanged the ways that goods and services are exchanged, whilenew forms of inter-enterprise collaboration are emerging andrealigning value relationships.

Specifically, the Internet serves to intensify networking optionsfor all market participants not only accelerating businessprocesses and making them cheaper and more effective, but alsostrengthening relationships with suppliers and customers.Unlike the reengineering wave of the 1990s, where the focus wason optimizing internal processes, the challenge currently facingcompanies involves redefining, harmonizing, and making cross-company processes more efficient with the help of informationand communication technologies. This gives companies the ability to assert themselves in the face of more aggressive, moreglobal competition, and enables them to remain profitable in thelong term.

Especially when it comes to using the Internet as a strategic saleschannel for interacting with customers, it is essential that companies rethink all of their customer-related processes in aholistic approach. Advantages of using the Internet as a saleschannel are clear: Unrestricted market presence 24 hours a day, all over the world Faster sales processes due to automated process flows Lower transaction costs due to the automation of the entire

process chain associated with selling via the internet Lower personnel costs as a result of a decrease in customer

service calls

7 Customers can be targeted and addressed directly since extensive information on customers needs and wants is available

More customer satisfaction and higher customer retention asa result of better customer services

Higher sales due to new customer groups and exploitation ofcross-selling/up-selling potential

These benefits are already being made reality. E-Commerce isprofoundly changing the business world as we know it. Electronicpurchasing and selling on the Internet is the trend of the future.Recent studies show that companies with a well-thought-out e-commerce strategy have been able to increase revenue byaround 10 to 20 percent, to cut costs by 20 to 45 percent, and toreduce working capital and infrastructure requirements by up to60 percent. Commerce conducted by the Internet is widely projected to grow to $500 billion by 2002 (Andersen Consulting,1999). More than $6 trillion in online B2B trade is expected by2005, representing 42 percent of total US B2B non-service spending,according to research by (Jupiter Communications, 2000).

IInntteerrnneett CChhaalllleennggeessIf the Internet is to provide companies with strategic, lucrativeopportunities, then these companies must ensure that they areoffering their customers real benefits based on this new http-infrastructure. In a first wave of webshop implementations it wassufficient to simply put a business process on the Web withouthaving it fully integrated into the existing business processes.Customers often had to deal with complicated ordering proce-dures, incorrect or no information on the availability of products,goods delivered late or not at all, invoices not matched up to thegoods delivered, and many other problems, when they had pur-chased products on the Internet. So already today to compete onthe Internet, any Web-based business system must also be fullyintegrated into the fulfillment system in order to guarantee the

follow-up services that customers demand which carry the samehigh priority. As such the level of service, responsiveness, andspeed of delivery to your Internet customers have to be the sameor surpass those of the traditional sales channels.

CCrriittiiccaall ssuucccceessss ffaaccttoorr CCuussttoommeerr OOrriieennttaattiioonnIn the e-commerce era, attaining a competitive edge requiresmuch more than a virtual shopping cart. If an e-commerce solu-tion is to succeed, customers must feel that they can immediatelybenefit from using it. This means focusing on your customerswith: An intuitive interface and powerful search engine Comprehensive multimedia information on products An offering tailored to the needs of a particular market, target

group or individual Configurable products Up-to-date, accurate information on prices and (real-time)

product availability Easy-to-use and fast ordering procedure Transparent view of order status Reliable and on time deliveries Correct billingFrom these requirements, sellers can derive the factors that arecritical to the success of their e-commerce solution. In the e-business world, companies that manage to identify and react to the needs and wishes of their customers more effectively,more personally, more quickly, and at lower costs will gain along-lasting competitive edge. Based on sound business intelligence,successful e-commerce solutions are characterized by customer-focused strategies, integrated processes and solutions, and genuinecustomer benefits. This is what enables a company to set itselfapart from its competitors who are just a mouse-click away onthe Internet.

8KKeeyy eelleemmeenntt ooff mmyySSAAPP ee--BBuussiinneessss ssoolluuttiioonnssSAP is the leading provider of inter-enterprise software solutionsthat integrate business processes across company borders. E-commerce with mySAP.com encompasses both buying andselling scenarios. Within mySAP.com, SAPMarkets Internet Salesis the selling side of the equation. The SAPMarkets Internet Salessolution covers the entire process chain for selling products onthe Internet. Core components include product catalog & contentmanagement, a sophisticated shopping basket engine, an enginefor pricing and configuring products, one-to-one marketing,payments handling, and online order status tracking.

SAPMarkets Internet Sales will actively incorporate your cus-tomers into the value chain activities, as it supports the reengi-neering of inter-enterprise business processes that take placebeyond the virtual shopping cart. This means that both you andyour business customers can benefit from integral, optimizedprocesses, more transparency, and lower costs. The quality ofyour relationships with your customers will also move into anentirely new dimension. The unique symbiosis between theattractive Internet front end and the proven operational excellence of the back-end SAP business systems guarantees integrated processes and efficient transactions, thus increasing

9return on investment. The fact that SAPMarkets Internet Sales isintegrated with other SAP applications plays a key role here: It ispossible to incorporate customers via the Internet into processesthat used to be primarily intra-enterprise processes, and to opti-mize these processes in their entirety.

IInntteerrnneett SSaalleess aass ppaarrtt ooff aa CCRRMM ssttrraatteeggyySAPMarkets Internet Sales builds on the mySAP CustomerRelationship Management solution. mySAP CRM supports allchannels of interaction with customers, and its modules coverall customer-related areas in marketing, sales, distribution andservices. mySAP CRM and SAPMarkets Internet Sales form anideal basis for successfully implementing a multi-channel strategy.Regardless of whether your customers are visited by a sales representative, phone in their queries, or order products on theInternet, all information is passed on to the CRM system togetheras all touch points with the customers are synchronized. KeyCRM components such as Marketing Management can be usedfor all kinds of interaction with customers including the

interaction over the Internet. SAP is setting standards with thisunique combination of e-commerce and Customer RelationshipManagement, allowing your company to look after its customerspersonally and effectively.

IInntteerrnneett SSaalleess aanndd mmyySSAAPP SSuuppppllyy CChhaaiinn MMaannaaggeemmeenntt SAPMarkets Internet Sales actively incorporates customers intosupply chain management via the Internet. The ATP check(available to promise) in the Advanced Planner and Optimizer(APO) enables customers to retrieve real-time information onavailability and delivery dates. The check can be run for produc-tion capacity and stocks in all warehouses and plants worldwide these can be replanned immediately, if required. Working withSAPs APO means that you can provide binding information onyour ability to deliver at the point in time when a customer submits a query via the Internet. This increases customer satisfaction, and means that you can plan internal resourcesearly on, and deploy these resources more efficiently.

Fig. 2: CRM Interaction Channels

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IInntteerrnneett SSaalleess aanndd mmyySSAAPP BBuussiinneessss IInntteelllliiggeenncceeThe Business Information Warehouse (BW) is the central datawarehouse of mySAP, and is responsible for collecting internaland external data, and preparing analyses and reports. Used inconjunction with SAPMarkets Internet Sales, SAP BW can beused for conducting marketing analyses and drawing up salesstatistics. You can draw up bestseller lists for specific targetgroups, run multi-layered evaluations for sales figures, or conductclick-stream analyses of the Internet communication. The BWplays a key role in collecting and using business intelligence tofocus on customers.

GGlloobbaall ssoolluuttiioonn ffoorr gglloobbaall bbuussiinneesssseessUnlike most other software vendors, SAP has the necessary expe-rience in all relevant areas to make your vision of e-commerce areality, and to turn your Internet strategy into corporate success.Many years of experience in business application software, athorough understanding of integrated business processes, andunique industry expertise mean that SAP is ideally equipped forproviding successful e-commerce applications.

As such you can use SAPMarkets Internet Sales to sell your prod-ucts all over the world. SAPMarkets Internet Sales can handlemultilingual catalogs, multiple currencies, different price formatsand different decimalization conventions. You can deploy andmanage different catalog versions for different countries or markets. SAPMarkets Internet Sales is a global solution thatenables you to reach out to every customer who has access tothe Internet, no matter where he or she is.

OOnnee--sstteepp bbuussiinneessssIn one-step business, realtime business transactions involvingseveral business partners can be processed entirely with the click of a mouse. This is where the integration capabilities ofSAPMarkets Internet Sales with e-procurement software come

into their own. In one-step business, the purchasing and salesprocesses are merged into a single process, triggered by the buyer.When a buyer submits an order, a purchase order is created inthe system of the company doing the buying and, at the sametime, a quotation is created in the system of the company doingthe selling. Both order processing on the one side (right throughto delivery and billing) and the remaining procurement activitieson the other side (right through to goods receipt and payment)can be fully automated. One-step business enables everyone toexploit the Internets potential for streamlining business processesto the fullest. The fact that SAPMarkets Internet Sales is fullyenabled to do one-step business with any MarketSet (the jointsolution of SAPMarkets and CommerceOne for B2B exchanges)powered exchange is an invaluable bonus. As such any sellingenterprise utilizing Internet Sales can immediately conduct one-step business with most of the current e-procurement solutions and also most of the B2B exchanges, opening hugeopportunities for new customers and joint efficiency gains.

SAPMarkets INTERNET SALES BUSINESS SCENARIOS

SAPMarkets Internet Sales is an e-commerce solution that sup-ports a whole range of scenarios and business models. Regardlessof whether you plan to sell your products directly to consumers,do business with other companies, or are looking to offer yourproducts via marketplaces, SAPMarkets Internet Sales providesyou with the functionalities and flexibility you need to supportyour sales processes efficiently.

BBuussiinneessss--ttoo--CCoonnssuummeerr SScceennaarriioo ((BB22CC))In this scenario, SAPMarkets Internet Sales provides you with thetools you need to set up an eye-catching, interactive e-shop tosell directly to consumers. The product catalog is multimedia-enabled so that you can present your products on the Internet,and provides the relevant information and data that consumersrequire, whether it be in the form of texts, image documents,sounds, or videos, etc. Powerful search engines enable your customers to find the products they are looking for quickly and accurately.

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You can also use the one-to-one marketing functions to turnyour website into a viable marketing channel. Since informationon the preferences and needs of your customers can be capturedautomatically, this enables you to draw up diverse customer profiles and use these as a basis for defining target groups. Onyour website, you can then propose personalized offers tailoredto the specific needs and tastes of the customers in these targetgroups (personalized product recommendations, for example, or cross-selling/up-selling offers).

It is easy for new customers to register online at your website and to maintain their personal customer profiles and addressdata themselves.

BBuussiinneessss--ttoo--BBuussiinneessss SScceennaarriioo ((BB22BB))This scenario is designed specifically for selling goods andservices to business partners. It takes into account special factors for business-to-business exchange, especially the abilityto build on established business relations concerning commonunderstandings on involved users, pricing, product range,shipping and payment terms.

In the SAPMarkets Internet Sales business-to-business scenario,it is possible to register several users who are allowed to placeorders for a company. The business partner is identified auto-matically when the customer employee is authenticated, andthe software ensures that only the prices and conditionsdefined for this business partner are displayed right from thestart. It is also possible to specify different delivery addressesfor business customers, and different requested delivery datesfor the individual order items.

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SAPMarkets Internet Sales also addresses important businesspartner requirements. For example, there is a fast order entryfunction where professional purchasers can enter article andorder numbers directly. It is possible to create and store ordertemplates for placing recurring orders that are similar. Therequest for more transparency in order processing has also beenaddressed: it is possible to track the status of all orders at anytime via the Internet, and to retrieve information on open items,as well as the status of outstanding orders and invoices. Thisresults in a reduced workload for the companys sales department,since the number of telephone queries is reduced to a minimum.

Of course, the B2B scenario has an interface to the SAPMarkets /CommerceOne Enterprise Buyer applications. The advantages ofone-step business where purchasing and selling are integratedinto a single process apply to sellers and buyers alike.

BBuussiinneessss--ttoo--MMaarrkkeettppllaaccee SScceennaarriioo ((BB22MM))In the networked economy it is essential to be flexibly able to follow enterprise goals even in distributed or aggregated scenarios.SAPMarkets is a strong player in powering these businessexchanges (with the above mentioned SAPMarkets MarketSetsuite), and has played a significant role in influencing commonstandards necessary for business processes spanning a multitude of enterpriseborders. SAPMarkets Internet Sales is firmly embedded in thisenvironment, and can either be used as an on-ramp, with specialfunctionality allowing to push content (product, pricing, prod-uct availability and configuration information) to these market-places and easily connect to their routing backbones for incom-ing purchase orders and outgoing confirmations or advance shipnotices. Or the functionality of SAPMarkets Internet Sales can behosted on the marketplaces facilitating market commerce forany seller (SAPMarkets MarketSet Order Management).

USING SAPMarkets INTERNET SALES THE COMPLETE

SELLING SOLUTION

CCuussttoommeerr ssaattiissffaaccttiioonn tthhrroouugghh iinntteeggrraatteedd ssaalleess pprroocceesssseess The entire customer interaction cycle of e-Selling is ideally aseamless complement between the customers procurementprocess and the suppliers sales and logistics processes. The entirepurchasing/sales (see figure 4) process can be broken down intothe following activities: Customer registration Searching for and selecting products

involving one-to-one marketing Configuration Available-to-promise checks Ordering products Payment, Order processing, Order status checks, change orders, and Reporting, sales intelligence and web shop fine tuning

SAPMarkets Internet Sales supports all of these activities.Individual functional modules are used for specific parts of theoverall process. The modules and overall process flow selectedcan then be modeled to meet requirements on both the sellerand buyer sides, and integrated into the back-end systems. Thisenables you to map a complete, ideal sales process involving different parties both within and outside of your company.

As the following section walks through this succession of shoppingphases, the SAPMarkets Internet Sales functionality is explainedin more detail. This includes detailing the tools available to compose such a web buying experience for each step.

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CCuussttoommeerr RReeggiissttrraattiioonnIf you wish to determine customer-specific prices or use the one-to-one marketing functionalities, your customers will haveto register with you. Registration is also a security measurebecause you can use it to prevent unauthorized users fromaccessing your shop, or specific information stored in it. All personal data is transmitted in encrypted form.

The customer registration procedures in the business-to-con-sumer scenario and business-to-business scenario are different this is because the customer plays a different role in each case.

Fig. 4: The Sales Process (Form Customers and Suppliers Perspective)

CCoonnssuummeerr RReeggiissttrraattiioonnIn the B2C scenario, prospective customers register themselvesdirectly at your website. Customers only have to enter theirname, postal address and e-mail address (or a special user ID)and also a password to place orders right away. A business partnermaster record and access authorization are created automaticallyin the SAP CRM on the basis of the data entered. Once customershave registered, they can reenter the Internet shop at any timesimply by entering their e-mail address (or user ID) and password.Once customers have logged in, they can conduct business trans-actions, and maintain their own user data. To allow anonymousbrowsing customers can access the catalog without logging in.

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RReeggiissttrraattiioonn ooff bbuussiinneessss ppaarrttnneerrssIn the B2B scenario, you have the ability to manage which part ofyour business offering is seen and accessed by each business partner. This can be in the form of customer-specific information(prices, for example) being displayed in the catalog and on otherWeb pages as part of this customer portal. Your business customerscan name several employees who are then each given their ownaccess authorizations. Each of these registered users is given auser ID and a password which they can use to log into the onlineshop. Of course, users can change their own password at any time.

SSeeaarrcchhiinngg ffoorr aanndd sseelleeccttiinngg pprroodduuccttssEase of use is very important when customers find their waythrough the products on offer, as such powerful search functionsare key. Generally speaking, a product catalog is used for selectingor finding products. It is also possible to select products frompersonalized product recommendation lists, bestseller lists, ordertemplates, and past orders. An electronic product catalog offersobvious advantages over traditional hardcopy catalogs: it costsless to produce, can be distributed more easily and at lower costs,is a more attractive way of presenting your products, contains aneasier-to-use search engine, and the information it contains ismore up-to-date.

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CCaattaalloogg aanndd ccoonntteenntt mmaannaaggeemmeennttYour product catalog is set up and its contents defined in theProduct Catalog Maintenance. Depending on your situation,you can design a catalog that is either more functional or moremarketing-oriented. Catalog areas are used to structure yourcatalogs to meet specific requirements and needs. Usually youwill structure these catalog areas hierarchically, assigning productsand/or further catalog areas to each catalog area. Products areassigned simply by selecting them from the product master. Theproduct master is supplied automatically with data from thematerial master of the SAP R/3 System. Changes in the R/3material master are passed on automatically and immediately this means that your catalog is always completely up-to-date.

You can, however, include much more than just master data inthe product catalog. Indeed, from a marketing point of view, it isoften essential that you complement the product informationcontained in the catalog with texts, documents and attributes ofyour choice, options are: Product characteristics that make it easier for customers to

find the products they require, and the product informationthey need.

Explanatory texts in different languages for individual productsand catalog areas.

Graphics, thumbnail images, sound files, video sequences, andmany other types of documents to product and catalog areas.

You are completely free to design your Web catalogs as youplease there are no special restrictions as to how your sitedesign should look. This applies both to the page layout (HTMLdesign) and to the information you intend to display at yourwebsite. You can tailor the standard HTML catalog templates tomeet your design requirements. You also freely decide thesequence in which the Web pages should appear. In other words,SAPMarkets Internet Sales provides you with the conditions youneed for presenting striking, customer-oriented catalogs on theInternet. You can publish one or more catalogs, or different versions of a catalog (different language versions, for example)on your website. Release and staging functions are used to support the publishing process of specific catalog contents.

CCuussttoommeerr--ssppeecciiffiicc ccaattaalloogg vviieewwssThe contents of a catalog often have to be tailored to the needsof individual customers, particularly in business-to-business scenarios. That is why SAPMarkets Internet Sales allows you toset up and publish customer-specific catalogs on the Internet.When a customer logs into your online catalog, they will seeonly the products that are of interest to them, and the pricesthat apply specifically to them.

IInnttuuiittiivvee nnaavviiggaattiioonn aanndd ppoowweerrffuull sseeaarrcchh ffuunnccttiioonnss iinn tthhee WWeebb ccaattaallooggThe catalog structure makes it easy for Internet users to navigatearound the Web catalog so that they can find the products theyare looking for quickly. Besides browsing through the cataloghierarchy, customers can also use the powerful search enginethat directly takes them to the product they require. The searchfunctions access all product data, attributes and texts that arestored on the index server. It is possible to combine search criteria,and to set price limits. This makes searching for products partic-ularly fast and effective, and helps increase customer satisfaction.One particularly attractive search option involves using check-boxes to specify desired product characteristics. The customerselects the characteristic values required, and the system thendisplays all products that fulfill these criteria.

If customers find a product they wish to purchase they place itinto their shopping basket simply by clicking their mouse. Theycan then decide whether or not they would like to shop forother products, or order the product which they just had placedin their shopping basket.

OOnnee--ttoo--OOnnee MMaarrkkeettiinngg ((PPeerrssoonnaalliizzaattiioonn))In e-commerce, and in business-to-consumer scenarios especially,particular value is placed on personalizing website contents andthe products on offer. This direct interaction with customerscomplements conventional marketing and traditional advertisingin the mass media. The SAPMarkets Internet Sales marketingfunctionality allows you to leverage the Internet as a one-to-onemarketing instrument.

DDeeffiinniinngg ccuussttoommeerr pprrooffiilleess aanndd ttaarrggeett ggrroouuppssInformative customer profiles drawn up from customer purchasingcharacteristics (hobby, age, income, product preferences, gender,and so on) form the basis for successful one-to-one marketing.These customer profiles can then be used to define target groups(for example, men aged between 30 and 40 who work out in theirleisure time, and earn more than $5,000 a month). SAPMarkets Internet Sales allows you to create an online questionnaire so that you can collect this information on theInternet. All customers who match up to a specific profile areautomatically assigned to a target group. This means that youcan target your marketing to specific target groups (for example,by recommending specific products for these groups). This func-tionality is available in both the B2C and the B2B scenarios.

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PPeerrssoonnaalliizzeedd pprroodduucctt rreeccoommmmeennddaattiioonnss aanndd ttaarrggeett--ggrroouupp--ssppeecciiffiicc bbeessttsseelllleerr lliissttssEffective marketing strategies supported by SAPMarkets InternetSales further include personalized product recommendationsand bestseller lists aimed at specific target groups. Personalizedproduct recommendations are lists of products that are drawnup for specific customer profiles. They could, for example, contain new products that are deemed to be of particular interestto customers with a specific profile.

Target-group-specific bestseller lists provide invaluable information.They are based on analyses of the products sold in a target group.The idea is that products purchased frequently by customerswith the same profile will be of particular interest to customerswho have not yet purchased this product. These bestseller listscan also be offered as a service to B2B customers so that they candisplay the products they have purchased most frequently in aseparate list in the online shop (in this case, the customer profileshows only the customer number as a characteristic).

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EE--mmaaiill mmaarrkkeettiinnggThe CRM Promotion & Campaign Management componentallows you to generate personalized e-mails aimed at specific target groups. The contents of these mails are generated on thebasis of the customer profiles discussed above. The emails cancontain hyperlinks to specific products in the webshop catalog.

HHiigghheerr ssaalleess wwiitthh ccrroossss--sseelllliinngg aanndd uupp--sseelllliinnggA feature of SAPMarkets Internet Sales that is of particular interestfrom a sales and marketing point of view is the automated product proposal feature. After a customer has selected a product,additional products with higher-quality and higher prices can bedisplayed in the shopping basket (up-selling), or additional products such as accessories or complementary services listed(cross-selling). The corresponding relationships between theproducts are maintained in the product master. When a customerclicks a product proposal, it is placed in the shopping basket (inan up-selling scenario, it replaces the product previously selected).The aim of this is to encourage customers to purchase moreexpensive products and additional products, thus generatinghigher sales volumes.

PPrroodduucctt CCoonnffiigguurraattiioonn CCuussttoommiizziinngg pprroodduuccttss oonnlliinnee -- ccoonnffiigguurree--ttoo--oorrddeerrThe Internet poses a particular challenge to companies thatmanufacture configurable products. Customers will often placea value on being able to configure or influence the design of the products they are buying. In SAPMarkets Internet Sales,interactive product configuration is made possible by theInternet Pricing and Configurator (IPC). It allows to identify thevarious product variants, dependencies, and restrictions, andautomatically calculates the correct price for the componentsand options selected by the customer.

The IPC can be used for product models of varying degrees ofcomplexity. If customers select a configurable product, the IPCwalks them through the configuration process. The options thatare possible are displayed (as are the corresponding additions ordeductions to the basic price), and can simply be selected by the

customer. Detailed descriptions and images can be provided tohelp customers decide which options to choose. The IPC checksthe consistency of the configuration constantly, and the price isupdated online.

It is essential that the configuration uses the same conditionsand rules that are defined in the back-end application. This is theonly way of ensuring that the configuration variant drawn up bya customer can actually be manufactured, and that the pricethat is displayed on the Internet is the same as the price thatappears on the invoice. The IPC guarantees this configurationintegrity by the configuration models defined in the R/3 System.It also saves you time and money since you do not have to modelproducts again for your website. When a customer orders a product that he or she has configured, the configuration data is passed on to the back-end system along with the order for further processing.

The IPC provides a unique configure-to-order scenario thatinvolves customers (and customer requests) actively in value-added activities early on. This scenario is complemented by theintegrated ATP check of the Advanced Planner and Optimizer,which enables customers to retrieve accurate information onavailability and feasible delivery dates at the same time.

AAccccuurraattee,, ccoonnssiisstteenntt pprriicciinnggPricing often represents a major problem on the Internet. Timeand time again, online customers are upset when they see thatthe amount for which they have been invoiced does not correspondto the price listed in the Web shop. Here SAP again utilizes theIPC. The IPC uses the same conditions and pricing procedures asthe R/3 back-end system. The pricing elements defined in theR/3 System are downloaded constantly to the IPC and kept completely up-to-date. This means that Internet users can takeadvantage of the powerful pricing functionality of the R/3System. It also ensures that the prices in the front end are alwaysconsistent with the prices in the back-end system. Since pricingmodels and conditions are maintained at one location, you donot need to enter the same data twice.

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The standard R/3 condition types (such as individual prices, discounts, or scale conditions) are automatically taken intoaccount when a sales price is determined online in a shoppingbasket. The net price, gross price, shipping costs and tax are alldisplayed separately both for the individual items in the order,and for the total price of the order. The IPC can handle multiplecurrencies and units of measure. In the B2B scenario, customer-specific prices are even displayed in the product catalog.

AAvvaaiillaabbllee--ttoo--PPrroommiissee ((AATTPP cchheecckk))AAccccuurraattee aavvaaiillaabbiilliittyy cchheecckk aanndd rreelliiaabbllee ddeelliivveerr ddaatteessSAPMarkets Internet Sales allows you to provide your customerswith reliable realtime information on availability and deliverydates. An ATP check (available-to-promise check) is run for everyorder item in the shopping basket (including configurable products). Unlike other online shopping solutions, which providea less reliable average delivery time, SAPMarkets Internet Sales isfully integrated with Supply Chain Management. The ATP checkis run in the SAP Advanced Planner and Optimizer (APO), andthe result is passed on to the SAPMarkets Internet Sales shoppingbasket. In this way, SAPMarkets Internet Sales via the SAP APOcan calculate a precise delivery date on the basis of the currentstocks and production capacity in all plants as well as thethroughput times for picking and shipping. Customers also havethe option of specifying a requested delivery date (in the B2B scenario, they can even request a different delivery date for everyitem). This requested delivery date is then taken into accountduring the availability check and delivery scheduling.

The importance of accurate availability checks and reliable deliveryscheduling should not be underestimated. They play a key role inincreasing customer satisfaction especially in a business-to-business scenario, where customers will often only place an orderif they can be certain that the goods will be delivered on a specificdate. As web-based commerce turns to the trading of directly production-related goods and services, this capability will be astrong differentiator compared to other web-shops.

For customers who do not choose to implement SAPs APO anATP check in R/3 System is available.

TThhee OOrrddeerr pprroocceessss TThhee sshhooppppiinngg bbaasskkeettThe procedure for ordering products in SAPMarkets InternetSales revolves around a virtual shopping basket, as customersselect products and place them into their shopping basket in asingle step (point and click). They can then order all products inthe shopping basket at once. SAPMarkets Internet Sales also givesyour customers the option of saving the contents of their shoppingbasket provisionally. If customers decide to interrupt their shopping, this does not pose a problem. They simply save theirshopping basket under a name of their choice, and then call it upat a later point in time to continue ordering.

To make it easier for customers to select products and to placethem into their shopping basket, the point-and-click techniquecan be used not just in the product catalog, but on all pages ofyour Web shop where products are displayed. These include thedetailed information views for products, the configuration pages(which are retained even if the configured product is placed intothe shopping basket), the bestseller lists, and the lists of recom-mended products. It is also possible to use the point-and-clicktechnique in saved shopping baskets, quotations, past orders, andorder templates. In the B2B scenario, it is even possible to enterarticle numbers directly in the shopping basket.

Prices and other cost factors (shipping and tax, for example) aredisplayed in the shopping basket, as are accessories and deliverydates. Customers can enter order quantities, configure products,specify a requested delivery date, add comments on the orderand, if necessary, change delivery addresses. Your customers canalso save, load, clear (either entirely or partially), or delete theirshopping baskets.

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OOrrddeerriinngg wwiitthh oorrddeerr tteemmppllaatteessSAPMarkets Internet Sales enables your customers to create their own order templates (called shopping basket templates ornotepads). Customers can select products that they frequentlyorder and place them into a template shopping basket, whichcan be saved under a self-explanatory name. This order templatecan then be called up at any time from a list of templates. Thecustomer only needs to enter the quantities required (if this isnot already specified in the template), and the order is ready. All of the shopping basket functionalities are available for these templates.

FFaasstt oorrddeerr eennttrryyYou can also provide your business customers with a fast orderentry option. All they have to do is enter the product numberand order quantity in the shopping basket, and the order is ready.This means that you can fulfill the wishes of many professionalpurchasers who often know article numbers by heart by providing them with a fast, efficient ordering procedure.

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OOnnee--cclliicckk oorrddeerriinnggAs soon as customers have selected the products they want, haveentered the appropriate quantities, method of payment, and thecorresponding prices and delivery dates determined by the system,customers can order the contents of their shopping basket simplyby clicking once. If required, customers can enter a specific delivery address (in the B2B scenario a different address can beentered for each individual order item). Customers also have theoption of attaching comments to their orders. In the B2B scenario,it is even possible to enter a separate order text for each item.This means that even orders that deviate from the norm can beprocessed smoothly.

In SAPMarkets Internet Sales, it is possible to create a quotationinstead of actually placing an order. Customers can call up all ofthe quotations they have saved at any time. If they wish, customerscan then later create an order that references this quotation, or they may transfer individual items from the quotation to the order.

FFlleexxiibbllee aanndd sseeccuurree ppaayymmeennttSAPMarkets Internet Sales allows companies to take advantage of automated payment options on the Internet. Companies canoffer their customers different methods of payment. For example,customers can pay by credit card, and have payment authorizedimmediately online. Alternatively, a customer can decide to payupon receipt of the goods, or request that an invoice be sent. Inthis case, billing is performed automatically in the R/3 back office.The integration with a back-end system also ensures that discountsare taken into account, invoice amounts are calculated correctly,incoming payments are posted correctly, and reminders are sentout at the right time.

Payment transactions conform to the strictest safety standardscurrently available to increase reliability and reduce risk factorsto an absolute minimum. State-of-the-art security mechanismsensure a high level of security for transmitting sensitive data.

AAuuttoommaattiicc ccoonnffiirrmmaattiioonn ooff oorrddeerrssAs soon as a customer submits an order, the order number ispassed on from the back-end system and is displayed on theInternet. Written confirmation of the order is also e-mailed tothe customer. Of course, this also applies to quotations that customers have created themselves on the Internet.

OOrrddeerr pprroocceessssiinngg aanndd OOrrddeerr SSttaattuussIf customers are to remain satisfied, then the Internet ordermust be processed efficiently and reliably right up to the pointwhen the goods are delivered to the customers. A powerful back-end system is required if this efficiency and reliability are to beensured. And it goes without saying that the Internet shop mustbe integrated seamlessly with this back-end system to allow ahigh degree of automation. Online order tracking enables customers to track the progress of their order online at any time.This is an invaluable customer service, which on the one handincreases customer satisfaction, and on the other hand has greatcost-cutting potential.

EEffffiicciieenntt oorrddeerr pprroocceessssiinnggThe seamless integration of SAPMarkets Internet Sales (as a CRMcomponent) with the R/3 back-end system ensures that theorders received via the Internet are processed smoothly rightup to the point in time that the goods are delivered and billed.This means that, thanks to the proven efficiency of the R/3 backend, you can really keep the promises you make at the front end.This results in increased customer satisfaction and long-termcustomer retention. The entire process is automated from theplacing of orders in the Internet front end right through to theprocessing of orders in the back-end Logistics Execution System.This high degree of automation speeds up the entire salesprocess, and reduces transaction costs drastically.

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OOnnlliinnee oorrddeerr ssttaattuuss aanndd oorrddeerr ttrraacckkiinnggSAPMarkets Internet Sales enables your customers to view theirorder templates, quotations, orders and invoices on the Internetat any time, and also allows them to track the status of individualorders and order items. Hyperlinks can take customers to thetracking systems of your carriers so that they can monitor theshipping progress of the goods they have ordered.

CChhaannggeess aarree nnoott aa pprroobblleemmIf one of your customers changes their mind about an order,they have the option of canceling this order either entirely orpartially (they can cancel individual items). They can also ordernew or different products at the same time. Of course, the degreeto which the order has been processed in the fulfillment systemwill determine whether or not this is possible.

RReeppoorrttiinngg,, SSaalleess IInntteelllliiggeennccee aanndd WWeebb SShhoopp FFiinnee--TTuunniinnggGGaaiinniinngg ee--BBuussiinneessss IInntteelllliiggeennccee Through the use of the SAP Business Information Warehouse(BW), a full evaluation of the success of the Internet Sales channelis possible. The information in SAP BW is gathered from ordersplaced through Internet Sales, click-stream analysis of customerbehavior, as well as all other touch-points to your customerswhich are managed in the CRM system. This encompassinginformation base can then be built upon for key business analysis,webshop fine-tuning and marketing functions.

Evaluation of the Internet Sales channel can be categorized intoattraction, conversion, and retention. Customer attraction is e.g.evaluated by determining how customers find out about yoursite and whether or not they register once they reach it. Conversione.g. analyzes how effectively browsing customers are turned intobuyers. CRM data is important in analyzing channel revenue,customer segmentation, and buying patterns of your customers.Click-stream data provides the means to determine e.g. whichproducts are viewed but not purchased, or at what point customerschoose to drop out of the shopping process. Retention measuresthe stickiness of your site, including the number of visits ofyour active customers versus the visits of your inactive customers.

CClliicckkssttrreeaamm AAnnaallyyssiiss aanndd WWeebb SShhoopp TTuunniinnggMuch of the success of your web shop is based on how quicklyand easily your customers can navigate your site, find relevantproduct information, and place orders. The customer experienceof your site cannot only be measured by the orders that areplaced. It is critical to find out how customers behave on yoursite, e.g. to know whether or not they are looking at productsand not purchasing them, or whether or not they are abandoninga shopping basket prior to making a purchase. With the use ofclick-stream analysis, provided by TeaLeaf Technology and fullyintegrated into SAPMarkets Internet Sales, this information iscaptured and can be evaluated.

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This click-stream information assists the marketing, businessanalysis, service, and IT departments within your organization.Click-stream data allows you to optimize your look-to-buy ratioand configure your catalog, product location and supplementalinformation based on actual customer behavior and expectations.Another important feature is the trouble-shooting of customerproblems by replaying their sessions, and in general measuringthe technical health of your site. Customer behavior on the website can be combined with other CRM-side information on involvedbusiness partners, products, and buying history, for a completepicture of your customers wants and needs.

COMPONENTS AND ARCHITECTURE

SAPMarkets Internet Sales is a modular solution. Various components each perform specific tasks, as such there are:Internet components, Business Services and Business Executioncomponents (see figure below).

In this multi-level architecture all functions that are not directlyrelevant to business processes (catalog search engine, browsing,pricing, and configuration) are located at the Internet front-endlevel. This means that you have a large degree of flexibility in

Fig. 9: SAPMarkets Internet Sales Architecture

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scaling your systems, and high performance is guaranteed even ifthere is a heavy system workload. This architecture also meetsstringent security requirements since it is possible to build inmechanisms that protect your internal network at several points.Additionally, since presentation, interaction and business processesare all kept strictly separate, you have a large degree of creativefreedom to design an Internet shop that meets your needs.

IInntteerrnneett ffrroonntt eenndd RRuunnttiimmee EEnnvviirroonnmmeennttBehind the Internet front end, you will find the componentsthat make up the customer experience. The customer sessionsare held together by the Internet Transaction Server (ITS), whichmixes together the relevant information from the dedicatedcomponents allowing to create unique customer experiences.The following modules are used at the Internet front-end level: Internet Transaction Server (ITS): The ITS is the key component

at the Internet layer as it connects all business componentswith the Web server. In other words, it regulates communica-tions between the Web server and the back-end systems (viaCRM), the index server, the IPC and any other Internet applications. The flow logic for regulating interaction betweenthe application components and the customers browser iscontrolled by so-called flow files.

Index Server: The catalog data that is presented on theInternet is stored on the index server. This index server ensuresthat product information can be accessed quickly. It is usedprincipally for catalog browsing and speeding up searches inthe product catalog, as well as for reducing the workload inthe CRM System.

Knowledge Provider (KPRO): All of the multimedia documentsused in conjunction with the product catalog are stored auto-matically in the Knowledge Provider and replicated on theWeb server. The required documents are then called up from the Web server so that they can be displayed in the customers browser.

Internet Pricing and Configurator (IPC): The IPC enables customers to interactively configure products on the basis ofthe product models defined in the R/3 System. This meansthat customers can access powerful R/3 pricing and variantconfiguration functionalities on the Internet without actuallyaccessing the R/3 System directly.

BBuussiinneessss SSeerrvviicceessThe Business Services for SAPMarkets Internet Sales provide thebasic functions that are essential for setting up and running anInternet shop. They are provided by the SAP CRM System (SAPCRM) and, optionally, by the SAP Business Information Warehouse(SAP BW) and the SAP Advanced Planner and Optimizer (SAPAPO). These functions do not necessarily have to be Internet-specific. They can, in principle, also be used for other sales channels (e.g. call center).

The main function blocks include product catalog management,marketing management, the business partner master data, andthe sales order component all of these are located in SAP CRM.The SAP APO component is responsible for running availabilitychecks (ATP checks). The SAP BW can be used as an analysis toolfor conducting sales and marketing analyses (for example, generating bestseller lists for specific target groups).

BBuussiinneessss EExxeeccuuttiioonn --IInntteerrnneett SSaalleess aanndd EERRPPSAPMarkets Internet Sales is based on SAPs Internet businessframework architecture, and combines SAPs established client/server technology with forward-looking Internet technologiesthat have been tried and tested. Thanks to its architecture,SAPMarkets Internet Sales is exceptionally reliable, scalable andsecure, and boasts a balanced workload distribution.

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The various Business Execution components (R/3) and theBusiness Services components (CRM, APO, BW) are linked toeach other via CRM Middleware. This middleware regulates thereal-time synchronization of product, business partner and orderdata in CRM and R/3. It also controls the exchange of data withthe SAP BW and APO applications. This means that accurate,real-time product and price information can be made availableto the website. Orders that customers have submitted on theInternet are passed on for processing to the R/3 System automat-ically and without delay. The R/3 System processes these orderswith ease right through to delivery and billing. It is this seamlessintegration between SAPMarkets Internet Sales and R/3 thatmakes it possible to automate processes fully, at high speed andlow costs. In this interchange, the R/3 back-end system should be seen asthe system in charge, although it also receives changes in thecustomer master and, of course, orders from CRM. Materialmaster records and data relating to pricing and variant configu-ration are maintained in the R/3 System and are passed on viathe middleware to the CRM system. R/3 conditions and proceduresfor pricing, as well as bills of material, characteristics anddependencies for configuration are written directly to theInternet Pricing & Configurator (IPC).

AAuuttoommaatteedd BB22BB CCoommmmuunniiccaattiioonnThe SAPMarkets Internet Sales solution fully builds on the SAPBusiness Connector (BC) for seamless XML communication (BCnot shown in the architecture diagram). With this additional EAIcomponent the SAPMarkets Internet Sales solution is open toany marketplace communication based on XCBL Standards (following the XCBL 3.0 specification, see www.xcbl.org). Thebelow XCBL messages are currently supported out-of-the-box,many others can easily be added over time to reflect related business processes: Purchase Order inbound Order Change inbound Order Response outbound Shipping Notification outbound Invoice outbound

For the integration with other XML standards the SAP Business Connector is able to map between XCBL and the otherXML format.

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NNeeww ffllooww llooggiicc pprroovviiddeess mmoorree fflleexxiibbiilliittyyThe new flow logic technology involves a strict separationbetween the presentation of information on websites using HTMLtemplates, and the actual business processes themselves (forexample, pricing, creating orders, or changing a customersaddress). Separate flow files are used to link the presentation layout with the business applications. These flow files define theinteraction logic, which determines the information that is displayed and the business processes that are triggered. Thisopens up an exciting range of new opportunities for influencingthe interaction with your customers even without strong previousprogramming experience. It also gives you a large degree of freedom in designing the visual appearance of your Internet sitesince there are no restrictions imposed on the page layouts in theHTML templates. You can use any HTML editor to rework theHTML templates. As such you can use Internet Sales to makeyour online shop an integral part of your entire Internet presence,so there is nothing to stop you from exploiting your corporatedesign to the fullest.

AVAILABILITY

Any customer with an existing R/3 (releases 3.1H and upward)can use SAPMarkets Internet Sales today. Starting in the thirdquarter 2001, any company will be able to deploy SAPMarketsInternet Sales, and position it within their own specific back-office environment for all of their outbound business needs.For further information, e.g. on functions in detail or customerreferences, please consult the SAPMarkets homepage atwwwwww..ssaappmmaarrkkeettss..ccoomm or contact your SAP sales representative.

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SAPMarkets Headquarters,

SAPMarkets Inc.

3475 Deer Creek RoadPalo Alto, CA 94304Tel. +1 (650) 849.4100Fax +1 (650) 849.4101

www.sapmarkets.com

50047951 June 2001Copyright 2001 SAPMarkets, Inc. All Rights Reserved. SAPMarkets and Business Beyond Boundaries are trademarks of SAPMarkets, Inc. MarketSet and Enterprise Buyer are jointtrademarks of SAPMarkets, Inc., and Commerce One Inc. Other product or service names mentioned herein are the trademarks of their respective owners.