McCormick Integrates Sales & Marketing Activities

In a time when most everyone is challenged by cost pressures in a weak economy, the spice and seasoning maker McCormick and Company Inc. is focused on creating value for its customers by continuing to develop new capabilities.

With $2.9 billion in net sales for 2007, McCormick is the largest spice company in the world and a leader in the manufacturing, marketing and distributing of spices, seasonings and flavors to the entire food industry. Customers range from retail outlets and food manufacturers to food service businesses.

For the past few years, the company has taken steps to integrate its sales and marketing activities as part of an initiative designed to achieve business process improvements. After completing a three-phased implementation that awarded the company new capabilities in the areas of retail audits, campaign management and trade promotion management, McCormick is now tasting the fruits of its labor, gaining the ability to better anticipate and meet the needs of customers and consumers while simultaneously driving profitable growth.

A Massive Undertaking

McCormick's integrated sales and marketing initiative has been a two and a half year project, starting in February of 2005 and culminating in the go-live of its trade promotion management and settlement application in June 2007.

The project was completely business process-oriented at the start, and McCormick only collaborated with technology partners in order to identify process gaps and project requirements up front.

"We collaborated with SAP and others, and orchestrated workshops that were facilitated by industry leaders and experts," reported Dave Garriott, commercial manager, Global Business Solutions for McCormick at SAP's international customer conference, SAPPHIRE 2008, this past May. "We invited key stakeholders to participate in those roadmap sessions and mapped out business processes for all key areas, from marketing, planning, sales planning, marketing research, sales and marketing to, ultimately, analysis. We wanted to focus purely on our business process."

With a fit gap analysis complete, McCormick then engaged long-time partner SAP to provide the technology portion of its integrated sales and marketing project. McCormick first rolled out SAP R/3, BW and APO in June 2002 in its U.S. Consumer Products division and has subsequently rolled out the same instance throughout its Foodservice, European and Canadian operations. With senior management's support, McCormick's business and IT departments would work closely together on the roll out of SAP CRM as part of its integrated sales and marketing project.

Three Pillars

The implementation took place in three phases and addressed desired business process improvements for the functions of headquarters planning, account planning, sell-in and negotiation, retail execution, validation and settlement, and evaluation and analysis. The three phases were Retail Audit, Campaign Management and Trade Promotion Management (TPM), the latter of which was the largest in scale and complexity.

"The phased approach was critical for us to get early wins with business users. We needed to understand the software and the challenges across multiple landscapes. Getting users involved during the campaign management and retail audit projects then prepared us for the roll out of our TPM project," reported Garriott.

Pete Tridone, business systems manager, McCormick, provided an in-depth overview of the three-phase implementation at SAPPHIRE 2008. Here is a summary of the challenges, objective and benefits presented in each phase.

Phase 1 - Retail Audit: Live in June 2006, Retail Audit enables McCormick to audit stores as well as its brokerage firms for compliance to McCormick's retail standards.

Prior to implementation, this was a completely manual process characterized by multiple data points and a lack of data integrity. Under Phase 1 of the sales and marketing integration project, retail managers now can audit conditions in the store (including rotation, planograms, out of stocks, product distribution, etc.) using a standardized audit form that they can retrieve on their Blackberry device. Upon completion, retail managers simply hit send and the audit information is uploaded into SAP BW, an improvement that enhanced data integrity and analysis capabilities.

"From a process standpoint, we improved it with one audit form, standardized scoring for brokers so they can understand the appropriate follow-up actions and enabled BW-supported reporting, significantly increased our ability to analyze the data," explained Tridone.

Phase 2 - Campaign Management: As part of the account planning function, Campaign Management enables marketing and sales planning to build brand plans, manage collateral and create recommended customer promotion events. There were two main areas of focus during this second phase.

First, the implementation of knowledge management enabled the storage and distribution of collateral (brand plans, selling story, sales action plans, etc.) for support of marketing campaigns and themed events.

"This was a big change in business process for us given that a few years ago we were all paper in terms of marketing collateral," said Tridone.

Second, the implementation of CRM Marketing Planner enabled marketing to record campaigns, which support McCormick's annual promotion calendar. Meanwhile, it allowed the sales planning function to create deals in CRM that field sales could copy into trade promotions.

"We evolved from a manual process to standardized campaign creation and collaboration; a central and secure repository for all collateral; web-enabled access; and one version of the truth. This has been an overriding factor throughout the entire CRM project where we now have more control, more visibility and more transparency across functions," said Tridone.

Phase 3 - Trade Promotion Management: The last module, and by far the most complex in nature, was implemented with go-live in March 2008. TPM provides an end-to-end solution from annual planning to promotion execution and post-event analysis. There are four main parts:

1. Forecast accrual transformed a manual and informal application into a CRM-based application that is fact-based and manager-approved. This feeds into a reliable accrual checkbook, which is user-owned, up-to-date and links to the annual planning cycle.

2. Prevention planning changed from being a legacy system with inflexible integration, few controls and a six-month cycle to an R/3 integrated application that has strong controls, enhanced security and a 12-month cycle. This also feeds into demand planning.

3. Promotion settlements were previously managed in a legacy system. This process is now marked by strong controls, linked to a deduction management system, is user-owned and feeds into the accrual checkbook.

4. Reports/analytics: Several reliable reports and are now enabled by BW/Web reporting.

The integration of these four areas leads to important benefits. For one, McCormick has achieved full lifecycle integration with its enterprise resource planning system. "Using middleware, we are able to read information on an as-needed basis rather than batch processing at night or on weekends," said Tridone.    

Standardized processes for promotion execution as well as automation are also wins in terms of efficiencies. Plus, field sales and brokers are now equipped with better tools and more information to support customer promotional activity.

The Journey Continues

With regard to the progress made so far, Garriott said that, "We're happy with what we've done, but we still have a lot more to do," including an SAP CRM upgrade.

Right now, Garriott and Tridone reported that they are reaching out to the business users to identify where challenges still exist.

"We want to refine our settlement process; improve the ease of use for our workflow application; we want to develop proactive audit and exception reports; and we want to try predictive analytics," listed Garriott. "We believe we are in a good position with the history we're collecting, the data that we have and the initiatives we are working on to move in that direction."