lexia lite prospectus -...

0© Lexia Analytics

LEXIA LITE – PROSPECTUS

– Strictly Private & Confidential –

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All intellectual property in these materials, including copyright is owned by Lexia Analytics. These materials are confidential

between Lexia Analytics and Lexia’s direct client. These materials must not be copied or used in whole or in part or disclosed

to/by any party without the express written permission of Lexia Analytics Limited.

1© Lexia Analytics

Consumer Goods Companies

have good reason to be unhappy

with trade promotions,

which seem to grow

more complex,

more numerous,

more expensive,

and less manageable

every year.

“Trade spend keeps going up,

but the impact keeps going

down.”

~ CEO, FMCG

Trade spend for a lot of companies resembles a black hole of expenses ...

2© Lexia Analytics

4-6%

5-10%

4-6%

7-12%

Our clients’ average trade spend is 24% of

Gross Sales vs a profit of 16% (trade spend as

% of gross sales)

Trade spend is, for most companies, the single biggest area of both financial control risk and

potential value creation/destruction

30%

32%

22%

Client 2

Client 1

Client 3

17%

Client 5 11%

Client 4

16%

Weighted average profit as

% of gross sales

Australia

China

Thailand

US

Korea

(1) The Importance of Trade Spend (2) Financial control risks

“Nestle Malaysia has denied allegations

that it fixed retail prices for top

beverage brands Milo and Nescafe in

the country, claiming that it only sought

to prevent their use as loss leaders by

‘selected retailers’.”

Beverage Daily, May 2012

In recent years, multiple companies

worldwide face regulatory and financial

turmoil

Nestle SE Asia

“The troubled wine company, which has

a long history of asset write-downs,

says it expects to lop up to another

$260 million from the value of some of

its brands and associated assets.”

ABC News, Jun 2014

TWE USA

“A monkey can hit his A&P

spend but to nail your trade

spend is like landing a 747

on a postage stamp!”

CFO, FMCG Company

Lexia

benchmark

Impact of TPM implementations in EBIT

(as % of overall trade spend)

Competitor

benchmark

(3) Value Creation/Destruction

“One bad KAM can destroy

more value than 5 good

ones can repair”

Chief Customer Officer ,

FMCG Company

Industry

Benchmark

(Emerging mkt)

Industry

Benchmark

(Dev’d mkt)

3© Lexia Analytics

• Intranet-based paperless

system integrated with SAP

• End-to-end reporting and spend

capture

• Company-wide enforced for any

promotion over pre-agreed

amount

• Optimisation across different

customer formats and across

region and customers

• All basic processes

standardised across business

• Customer segmentation and

regional allocation

More alarmingly, despite the key importance of trade spend, many consumer goods

companies continue to use Excel as their key management system

“Wild West of Trade

Spend”

“Recording spend and

controlling the purse

strings”

“Drive efficiency of

spend”

IT systems

Record & report

Control

Optimisation

Standardisation

Focus

• Mix of paper-based process

and excel macros

• Inconsistent recording of

spend approved, accrued

and paid

• Limited approval processes,

questionable methodology

and no link with ERP system

• Only sporadically – promo

program very much

repetition of what was done

before

• None

• Gain basic control to limit

surprises


system or rigid Excel-based

• Instant overview available of all

promotions approved

• At least a partial link with ERP

and clearly outlined

methodology

• Building blocks in place but not

really driving active spend

allocation

• Still unnecessary differences

between countries but limited

• Enforce / influence behaviour

and remove “inefficiencies”


system integrated with SAP

• Monthly BPM reports

• Other spend captured

• Company-wide standard

enforced

• Fully integrated solution

• Proactive spend allocation

based on brand building and

commercial rationale

• All basic processes

standardised across business

• Optimisation and

standardisation

The Four Horizons of Trade Spend

• “90% of consumer goods companies in the Asia Pacific manage the majority of trade spend management,

reporting and analysis through Excel.”

• “Microsoft Excel still has more market share than any other single vendor,

despite its lack of industry-sector features” ~ Gartner

Most of our

companies are

here!

“Customer segmentation

optimisation”

4© Lexia Analytics

(1) Solutions are very expensive

Most importantly, the size of investment and the scope of implementation make these solutions

accessible only to Tier 1 size companies

(e.g. revenue of USD 250M and above)

Typical costs involved with implementing a

TPM solution with leading providers

(in US$M)

0.10.7

0.1

0.6

0.9 1.2

License Acquisition

License Annual Maintanence

Implementation Consultancy

Provider 1

Total

2.2M

1.4M

(2) Solutions take a long time to

implement

• Projects usually last about 9 – 12

months depending on the scope with 2-

5 Full Time Equivalents (FTEs)

• A typical implementation timeline:

Total Project Duration: 9 – 12 months

“Focus on SaaS or managed service

offerings as on-premises and highly

customized solutions typically cost more

than what these companies are willing to

pay.”

~ Gartner Report, 2014

Provider 2

(3) And once implemented

delivers unsatisfactory results

“The result is a high failure rate. The

average consumer products company has

implemented at least three trade

applications over the past five years.”

~AMR Research, 2009 (Cercere &

Steutermann)

• Average life expectancy of a trade

promotion technology project is between

14-18 months after go live

• Common problems include:

“My sales team has stopped using it as they

said it was taking up too much of their time”

“We have changed the way we structure our

business so this tool is outdated”

“Data input was filled with errors which has

impacted the P&L. We may as well go back

to doing it on Excel. At least it will be more

accurate”

“We’ve already spent so much money on this

tool – it will just have to go live whatever the

state might be!”

Responsibility Duration (mth)

TPM implementation

assessment and gather user

requirements

1) 1 – 2

Design TPM tool based on

requirements2) 1

Development engineering 3) 3 - 5

Create test criteria and

scripts4) 1

Perform tests, evaluate

scripts and refine

5) 1 - 2

User acceptance testing6) 1

Launch execution and

measurement (i.e. “Go Live”)

7)

However, very few companies have found an economically satisfactory solution for this

business issue

5© Lexia Analytics

A major part of the cost and implementation scope is driven by elements that are linked to

the solution scope but not intrinsically crucial to solving the key issue

Usually, this is mainly driven by 3 factors:

(1) System interfaces with DMS/ERP taking up lots of developer time before go-live and raising business risk profile

unnecessarily

TPM

ERP, DMS

S&OP

CRM

Fund Mgmt

Procurement

SAP BW / SAS

“The process is never as easy as

vendors say it is or may even know it is”

~ Gartner

Key Integration/ Automation Requirements:

• Customer master data

• Product master data

• Price master data

• Sales performance at brand account level

Key Integration/ Automation

Requirements:

• Base demand

• Historical sales trend

• Forecast accuracy

• Actual sales


Requirements:

• Store promo adoption

• Channel spends

• Consumer offtake

• Consumer billing price

• Planogram compliance

• Store level forecasts


Requirements:

• Budget structure

• Funds and limits

• Actual spend details

• Fund spend status

• Claims & Accruals

Key Integration/ Automation Requirements:

• P&L structure

• Business and customer P&L reporting

• Compliance settlement

• Post promotion evaluation and analysis

6© Lexia Analytics

(2) Change of user requirements and indecisiveness at multiple stages driving rework and extending timeline

(3) Data cleansing and hierarchy setting to be included in project timeline thereby making basic maintenance cost part of

project expense

• Due to the myriad of data sources the TPM solution will need to integrate with, it is essential that naming conventions and data

sources are kept up to date with minimal errors.. Failure to do so will result in incorrect reporting and skewed analysis

• Hierarchy settings can potentially be complicated when each system (DMS,ERP,CRM) uses a different methodology

“The sales report suggested by the sales

department doesn’t fit my needs. We need to

add other details”

~ Finance/Shopper Marketing Team

“Should baseline be

calculated with/without

seasonality? Hmm…”

~ Demand Planner

“We have many different ways to group our

products by the various departments. Can

the tool accommodate all of these?”

~ CIO/Finance/Sales

Often, 20% of

the solution

drives 80% of

the cost

How can this be avoided?

Significant cost and time can be avoided by:

1. Not building system interfaces but simply using upload sheets

2. Fitting within pre-defined template and leave customisation to a minimum

3. By using a more flexible structure, allowing for more data inconsistencies at least at go-live

A major part of the cost and implementation scope is driven by elements that are linked to

the solution scope but not intrinsically crucial to solving the key issue (cont’d)

7© Lexia Analytics

A quick simple solution to trade spend clarity

Rapid Insights

8© Lexia Analytics

20% of the time – A first user ready implementation (inclusive of training) can be done in only 4 weeks!

How a typical implementation timeline should look like:

20% of the cost – Costs are less than 20% both in terms of implementation and ongoing expensesCost (at about US$30K) include:

• 2 week support with 2-3 FTE

• Pay per user subscription fee, annually

And 80% of the problem solved! – Whilst the Lexia platform is built on a highly structured approach, the solution is still

customisable by product group, customer hierarchy and promotion mechanism type

Lexia Analytics has developed a solution that address the crucial 80% of the issue in 20% of

the time and cost

Gather master data

SetupTesting and

refiningTraining Hypercare

2 week 2 days 3 days 1 week

Details:

• Assist with

online sign up

• Run through

data structure

and what is

required

Details:

• Set up

customer,

product and

pricing data

• Develop

required

promotion

mechanisms

Details:

• Test sample

promotions with

different

mechanisms

and scenarios

• Make any

adjustments

and refinement

as required

Details:

• User training

including

quizzes to

ascertain

understanding

3 weeks

Details:

• User support

and issue

resolution

“Go Live”

Customer Data

You choose the hierarchy!

Product Data

You choose the hierarchy!

9© Lexia Analytics

Lexia Lite is a completely cloud based, secure, scalable and customisable solution for

companies to manage their trade spend

Easy management of promotions

Key reports to analyse promotions (promotion register, promotion calendar, number of promotions by

month/duration/budget)

Cloud-based platform

Our cloud based platform enables:

Access anytime, anywhere

Scalability: Use the tool across multiple countries, regions and departments

SaaS (Software as a Service) structure: Pay per user on a subscription basis as opposed to the full end-to-end

implementation project fees.

Secure

Using two step verification for user login and database security applications, the tool is secure from unauthorised

activity and malware infections

Scalable

Level of financial analysis and promotion evaluation is scalable according to client needs and available data sources.

Customisable

Customisable product groups, customer hierarchies and promotion mechanisms provides flexibility to your business.

Product Groups

Customer Hierarchies

Promotion Mechanisms

10© Lexia Analytics

Lexia Lite can be set up through 6 easy steps:

1. Provide sign up details

(Name, Company, Login Details, Country/Region)

2. Upload customer data and configure groupings

3.Upload product data and configure groupings

4. Upload product conversion factor and configure

(if applicable)

5. Upload pricing data by product SKU

(option to upload by product and customer combination)

6. Select relevant promotion mechanisms and set promo

guidelines / tramrails

For businesses with 20-30 SKUs,

100-500 customers and 3-5 promo

mechanisms –

It can be done in a morning!


Promotion creation now allows you to select your product &

customer based on the hierarchy!

Whatever product, customer hierarchy you have… Whatever product, customer hierarchy you have…

Region 1

Customisation is easy with up to 10 levels that can be declared

1

GT

Company

MT

Region 1 Region 2

City1 City2 City3 City4 City1 City2 City3 City4

Region 2

Simply upload the data with the template provided and

configure the groupings on the web-based tool

Other customisation options include:

• Including product conversion units based on your naming

conventions (e.g. Box, 9LE, Carton etc.)

• Creating your own promotion mechanisms

• Uploading product price by SKU or by product-customer

combination (i.e. Price of a particular product sold to a particular

channel/customer)

• Should you have any changes to the hierarchy, simply re-upload

and configure!

Simply upload the data with the template provided and configure

the groupings on the web-based tool

2

Promotion creation now allows you to select your product &

customer based on the hierarchy!

3

Other customisation options include:

4


• The Advanced Encryption Standard or AES is a symmetric block cipher used by the U.S. government to protect classified

information and is implemented in software and hardware throughout the world to encrypt sensitive data.

Benefit: Ensures tool is safe from web exploits

Leveraging security features of Google, Amazon and the .NET framework, security settings are

consistently up to date and data is secure from all threats (to the extent possible)

(1) User authentication & activity tracking

(2) Encrypting data transfers

(3) Data storage security

• Auditable trail of user activity (i.e. Reports on when they signed in and what they did – upon request)

Benefit: Ensures tool is secure from unauthorized use/activity

1. User logs in to Lexia-tools.com 2. TOTP is generated on the google authenticator

app on user’s mobile

3. Once password is included onto the

website, user can now log into the tool

How it works….

• Two-step verification via Google Authenticator

Every time user logs into Lexia-tools.com a time-based one time password (TOTP) will be sent to their mobile phone

• Built through Amazon Web Services (AWS), we could utilize the most up to date technology to keep your data safe

AWS infrastructure puts strong safeguards in place to help protect customer privacy. All data is stored in highly secure AWS data centres

Benefit: Ensures data on our databases are secure and prevents data leakage

User

User encrypts

file using

session key

Encrypted

data

Server

Server decrypts

data using

session key


Lexia Lite is scalable solution that over time can transition to a fully integrated TPM solution

Lexia Lite

(Basic)

Lexia Lite

(Basic+)Lexia Lite (Professional) Lexia (Enterprise)

Features

Platform

Benefits/

Additional

Benefits

AWS Cloud AWS Cloud AWS Cloud Private cloud- or on-premise

• Limited customisability

• Customisable marketing

guidelines for approval

• Limited customisability



• Upload/entry of actual sales

• Baseline calculation

• Greater customisability





• Account planning

• Upload trading terms

• Greater customisability

• Customisable approval

structure and guidelines



• Account planning

• Fully automated data

upload and posting

• Record of promotions

• Automated approval flow

• Customisable promotion

mechanisms

• Auditable accrual estimate

In addition to previous

benefits

• Generating P&L with

customisable P&L lines and

trading terms

• Account planning (Manage

base forecast and create

incremental promotions

against KPIs)


benefits

• Automated baseline

calculations & co. forecasts

• Claims reconciliation

• Post promo evaluation vs.

plan


benefits

• Data integration (automated

download and update of

database for ERP, DMS

and CRM systems)

• Automated report suite

(including sales reporting

and accrual postings)


Gather master

dataSetup

Testing and

refiningTraining

“Go Live”

Hypercare

2 week 1 week 3 weeks1 week

Lexia Lite’s pricing is as simple as it is economical

One-time Implementation Fee Cost (US$)

Implementation - DIY 0

Implementation – to Go Live (4 weeks of support) 20K

Implementation – Go Live + Hypercare (7 weeks of support) 30K

Monthly Subscription Fees Cost (US$)

Min. user base of 5 users 600

Up to 10 users 1,000





31+ users Corporate rate


Both during and post implementation, Lexia resources are available for support

WOUTER VAN RIJ

• 7 years top tier management consulting

experience with Boston Consulting Group

• 10 years of experience in software development

and bespoke IT solutions

• MSc Engineering (Chemical), MBA (INSEAD)

JELLE DE JONG

• 5 years top tier management consulting

experience with McKinsey & Company and

Partners in Performance

• 5 years with Diageo in London and Australia

• Worked with Unilever in the Netherlands

• MSc Engineering (Mechanical), MBA (INSEAD)

Our leadershipExperienced leadership Dedicated Team of Analysts

KUAN WEN SANG (B.E. – Civil)

• 2 years experience with Lexia on projects including

customer finance, TPM

• Prior experience in project management

• B.E. from University of Auckland in New Zealand

MATTHIAS VAN DUN (MBS)

• 3 years experience with Lexia supporting projects across

SE Asia

• Prior experience in consulting within Europe and Asia

• MBS from University of Antwerp in Belgium

STEFFI TEDJO (B.Sc. – Econ & Finance)

• 1 year experience with Lexia on consulting and IT

implementation projects

• Prior experience in consulting, project management and

commercial sales

• B.Sc. from SMU in Singapore

YEE HWA CHING (B.A. – Finance)

• 3 years experience with Lexia on projects including

customer finance, TPM and consulting projects

• Strong analytical skill set and expertise in FMCG

• B.A. from NUS in Singapore

Our MissionA comprehensive service offering

• Develop and deliver customized trade spend management and

optimization platforms

• Trading term review and re-designs

• Metric and dashboard development and implementation

• Promotional effectiveness analytics

• Commercial strategy development

• Field sales operational effectiveness

• Customer marketing process and effectiveness optimisation


A quick simple solution to trade spend clarity

Rapid Insights

Go online or reach out to us for a live demo!Lexia-tools.com

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