Difference between PARTY and CUSTOMER?
Marketing is the process of identifying, creating and retaining a customer. CRM tools essentially deal with that process. It is used by companies to identify potential customers, make them buy something from the company, maintain effective relationships with them to retain them for repeat purchases as well. This is what CRM does.
But an ERP like oracle does not have any relationship with a person unless he buys something from the company. A customer is someone who has a buying relationship with the company. So how do we distinguish between a person who has bought something and someone who hasnt purchased anything from you? This is where the party definition comes into picture. A party is anybody that exists. He/She/It does not have to have bought something from the company earlier. In fact, they do not have any relationship whatsoever with the company. So how does the company make them buy something? This is where CRM helps. It helps the company in identifying such people, create some marketing campaigns to make them buy something and convert them into the company’s customers, and keep maintaining relationships with them so that they will keep buying from them in the future as well.
Oracle purchased Siebel CRM to target these companies which require CRM tools to create, maintain and retain new customers. Prior to 11i, Oracle had the customer tables only. It did not have to deal with non-customers. Anyone who purchases becomes a customer and is stored in the ar customer tables. When Oracle bought CRM, it needed to incorporate the concept of a ‘potential” and “repeat” customer into the existing data model. It could not have had separate schemas or databases for CRM tools and ERP tools. Since CRM and ERP have to talk to each other, they wanted one single model to incorporate customers who bought and people who have not purchased. So they created a layer over the customer definition called party and said “Anyone who exists is a party”. Once this party buys something, it becomes a customer. Kindly note that it is still a party. It is both a party and customer as well after the purchase is made. So for a person to become a customer, he has to exist first. Only then he can make the purchase and become a customer.
So the process would be like this. A company wants to create some new customers. So it first uses some CRM tools to identify new people it thinks can be targeted. It uses some CRM modules like marketing, telesales, telemarketing etc… to target the customer and finally convinces the customer to make the purchase. So, this person has entered the oracle database. Remember he has not bought anything yet. He is only a party for now. How does he buy now? CRM does not have any modules to place or process orders and payments. The party has to place an order in the ERP module Order management. Once he places an order, he becomes a customer too. So he is now both a party and customer. I hope this helps in understanding why some companies need CRM and ERP, and why Oracle bought siebel CRM. Oracle can target companies which deal with a lot of customers in its business like retailers (Walmart, Amazon, Target) and can sell them both CRM and ERP packages as part of a wholesome solution. since ERP and CRM are sold together, they need to communicate effectively and easily with each other and hence one single data model for customers called the “Party model”.
If you understood the above concept, you can easily answer the below questions.
1.When we create New Customer in ERP, why a PARTY will be created automatically?
A: Can a person make a purchase without existing? He has to exist first to make a purchase. He has to become a party first before becoming a customer. Once you place order in OM, the person is created as a party and customer as well. The party information can be used by CRM tools to target the person for future purchases.
2. Can I create a Customer without Party?
A: Can a person make a purchase without existing?
3.Can I create a Party without Customer?
A: Can a person exist independently without making a purchase? He can. So a party can exist without making a purchase. Imagine you went to a store, checked some stuff and did not buy anything. You might be asked to fill some information like your name, your address, what you liked,what you didnt like and things like that. So this information has to be stored somewhere. Here you will be entered in the company’s system as a party, but not a customer. they will then start sending you emails or offers trying to make you buy something using their CRM tools. once you buy something, you become a customer. Until you buy, you are only a party.
The best answer I have ever read to understand the concept of Party and Customer.
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Nicely explained bro.
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Very well explained.
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The way you explained the concept is awesome. I really like it. Any layman can understand without much struggle.
Thanks a lot! Keep going with such answers.
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Very nice and simple explanation
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Thanks Shivmohan. Very well explained. Kudos to you. Would like something to read on PA Setups in R12. Search Internet but did not find much stuff available.
AyeBee
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Excellent easy to understand
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Hi
Very good article but please provide me the steps to create party
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Excellent explanation….where can I find more articles from you?
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Excellent. Good stuff for beginners.
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Thank U so much it was really nicely spoken…
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thankyou so much !!!
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Thanks.. It was nicely written
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very nice article
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It’s a very nice document
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Article so eloquently written…IMPRESSIVE for beginners..Gr8 work Purohit
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Hi,
Thanks for your article.
A very good explanation and really easy to understand.
Greetings from Chile
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nice to know about you and glad it help you. Do share with your friends.
also reach out for any more help and questions.
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Thanks a lot mohan
it is very good document i got now difference between pary and customers. really thank full mohan once again.
Thanks & Regards
Ramna.pakam
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Its very nice and easy to understand….
Keep up the good work.
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Hi Shiva Mohan,
Nice Explanation. Thank you very much for posting this article.
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Hi,
Kudos to you.
U diffrentiate both party and customer very well.
Thnxs Buddy…
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Hi I found this very very useful and cleared my doubts in quicktime.
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Hi ,
It is an Excelent artical. Once i read this artical i come to know the difference b/w customer and party. Could u please send the 02c
cycle flow.
Thanks,
Chowreddy
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Very nicely explained..Clear and obvious….thanks 🙂
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Hi Neha,
Hru?
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Hi,
Excellent and precise explanation on the difference b/w Customer and Party.I am regular visitor to this website and it really helps me in increasing my Oracle apps knowledge .
Thanks for your good work again.
Regards
Rajesh
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wow, I just know after reading this article. Great info and very useful to me. Thanks
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Great post. It is clear You have a great deal of unused capacity, which you have not turned to your advantage.
The way you write shows you have a need for other people to like and admire you, and yet you tend to be critical of yourself.
It seems to me that while While you have some personal weaknesses you are generally able to compensate for them.
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so detailed and need ful approach for the differentiation between party and customer ,even though i am working i n ERP a s a technical consultant , i never get a chance to differentiate these two, infact till reading this article i also assume both party and customer are same . Thanks a ton to ur article
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Good and clear.
But Party model was first implemented in 11.5.10
Even before Siebel was bought.
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its really a nice document for whose are new in Oracel ERP .
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Excellent !!!!
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Excellent
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Very good and so simple to understand for the beginners.
Thanks all the member (Specially To Shivmohan) for this job.
Thanks again and wants to more articles from SHIVMOHAN
for ORACLE RECEIVABLE module ro Entering from OM.
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