Unlocking Value
Consumer goods companies (CG) typically roll out Trade Promotion Management (TPM) solutions in two distinct phases. The first phase could be described as foundational, with a launch of traditional TPM functionality focusing on the classic closed-loop trade promotion business process. The second phase is typically advanced analytics, including predictive modeling, detailed customer profitability analysis and examining variables impacting promotion success.
In addition to these two distinct phases, CG companies now often focus on an intermediate phase related to their TPM and front office solutions, which typically happens after the initial implementation of core TPM business processes but before the launch of advanced analytics. The rational for this intermediate phase is threefold.
1. Lack of actionable data for advanced analytics. Often after an initial TPM deployment, CG organizations do not have enough promotion and customer planning data for advanced analytics. The delay between the initial solution deployment and when enough meaningful data has been collected is typically two or three planning cycles. This lag time presents an ideal window to build out other areas of functionality.
2. End-user feedback and increased collaboration throughout the organization. CG firms often look to strengthen functionality from the initial TPM roll-out based on user feedback and newly created cross-functional interactions and dependencies. Increased collaboration between departments uncovers new opportunities for managing customer-facing processes more effectively.
3. The desire to tackle related business processes not within the traditional TPM loop. These process areas often represent "low hanging fruit" that can deliver a considerable return on investment by their inclusion in the enterprise solution. This consolidation also allows companies to leverage their existing capital investments in hardware and software from the initial deployment.
Building Functionality
The strong desire to leverage current TPM implementations and build out additional functionality before embarking on advanced analytics has led CG organizations to tackle five major functional areas for their intermediate solution phase:
The management of custom displays and merchandising vehicles: CG firms spend billions of dollars each year trying to plan and approve custom displays and merchandising. This often is a drag on productivity and doesn't provide front-line managers with a clear indication of how custom merchandising impacts revenue and profitability. The inclusion of display management within the overall TPM solution can provide better visibility across the organization as to what types of display programs are delivering profitable revenue growth.
Enhanced settlement functionality: CG manufacturers are continually looking to improve the settlement process and make it more efficient for their sales professionals and customer service team. This can be accomplished through either developing advanced deduction matching functionality or deploying advanced deduction research capabilities (usually combined with digital assets management functionality). Increasing the speed of deduction resolution provides more time for sales professionals to focus on value added work. In addition, automated deduction matching functionality allows claims analysts more time to focus on invalid deductions and deductions that are not explicitly linked to customer performance.
Sales volume planning integration with funds management: Companies that are implementing sales volume planning processes are strengthening the integration between their funds management and volume forecasting efforts. This increased cohesion between managing funds and volume planning leads to more accurate accrual projections and greater financial transparency.
Enhanced integration with Marketing Resource Management (MRM) business processes: This allows marketers to understand the impact of trade promotion on marketing return on investment. This holistic view will enable marketers to understand how certain levers (trade promotion, TV, print, merchandising, gorilla marketing) impact brands and if these vehicles deserve continued investment.
Strategic selling work benches: CG firms are looking to integrate tactical trade plans with strategic objectives and sales methodologies. This will allow management to better understand the impact of category management objectives or sales initiatives on customer plans and retail promotions. It also sheds light on the cause and effect of strategic selling methodologies against key business metrics.
It is important to point out that this intermediate TPM solution phase does not need to occur between the base TPM deployment and the roll out of advanced analytics. These areas of opportunity can be perused at any time, either in the context of a technology solution or simply as a business process improvement project. However, those organizations who seek to tackle these functional areas within the context of their enterprise-wide solution and fully leverage the power of their current TPM application will potentially have a greater return on investment and a better chance to achieve operational excellence.
In addition to these two distinct phases, CG companies now often focus on an intermediate phase related to their TPM and front office solutions, which typically happens after the initial implementation of core TPM business processes but before the launch of advanced analytics. The rational for this intermediate phase is threefold.
1. Lack of actionable data for advanced analytics. Often after an initial TPM deployment, CG organizations do not have enough promotion and customer planning data for advanced analytics. The delay between the initial solution deployment and when enough meaningful data has been collected is typically two or three planning cycles. This lag time presents an ideal window to build out other areas of functionality.
2. End-user feedback and increased collaboration throughout the organization. CG firms often look to strengthen functionality from the initial TPM roll-out based on user feedback and newly created cross-functional interactions and dependencies. Increased collaboration between departments uncovers new opportunities for managing customer-facing processes more effectively.
3. The desire to tackle related business processes not within the traditional TPM loop. These process areas often represent "low hanging fruit" that can deliver a considerable return on investment by their inclusion in the enterprise solution. This consolidation also allows companies to leverage their existing capital investments in hardware and software from the initial deployment.
Building Functionality
The strong desire to leverage current TPM implementations and build out additional functionality before embarking on advanced analytics has led CG organizations to tackle five major functional areas for their intermediate solution phase:
The management of custom displays and merchandising vehicles: CG firms spend billions of dollars each year trying to plan and approve custom displays and merchandising. This often is a drag on productivity and doesn't provide front-line managers with a clear indication of how custom merchandising impacts revenue and profitability. The inclusion of display management within the overall TPM solution can provide better visibility across the organization as to what types of display programs are delivering profitable revenue growth.
Enhanced settlement functionality: CG manufacturers are continually looking to improve the settlement process and make it more efficient for their sales professionals and customer service team. This can be accomplished through either developing advanced deduction matching functionality or deploying advanced deduction research capabilities (usually combined with digital assets management functionality). Increasing the speed of deduction resolution provides more time for sales professionals to focus on value added work. In addition, automated deduction matching functionality allows claims analysts more time to focus on invalid deductions and deductions that are not explicitly linked to customer performance.
Sales volume planning integration with funds management: Companies that are implementing sales volume planning processes are strengthening the integration between their funds management and volume forecasting efforts. This increased cohesion between managing funds and volume planning leads to more accurate accrual projections and greater financial transparency.
Enhanced integration with Marketing Resource Management (MRM) business processes: This allows marketers to understand the impact of trade promotion on marketing return on investment. This holistic view will enable marketers to understand how certain levers (trade promotion, TV, print, merchandising, gorilla marketing) impact brands and if these vehicles deserve continued investment.
Strategic selling work benches: CG firms are looking to integrate tactical trade plans with strategic objectives and sales methodologies. This will allow management to better understand the impact of category management objectives or sales initiatives on customer plans and retail promotions. It also sheds light on the cause and effect of strategic selling methodologies against key business metrics.
It is important to point out that this intermediate TPM solution phase does not need to occur between the base TPM deployment and the roll out of advanced analytics. These areas of opportunity can be perused at any time, either in the context of a technology solution or simply as a business process improvement project. However, those organizations who seek to tackle these functional areas within the context of their enterprise-wide solution and fully leverage the power of their current TPM application will potentially have a greater return on investment and a better chance to achieve operational excellence.