sap trade management revolutionizing the...

CONFIDENTIAL

SAP NOW @ Riyadh - April 30th, 2018

Yavuz Durgut - Industry Value Manager

SAP TRADE MANAGEMENT REVOLUTIONIZING THE TRADE MANAGEMENT PROCESS

2CONFIDENTIAL© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ

CUSTOMERSARE CHANGING

THE RULES.

TECHNOLOGYIS CHANGINGTHE GAME.


Waves of Change for Consumer Products Companies

1950 1960 1970 1980 1990 2000 2015 2030

THE RISE OF THE

BRAND1950 - 1970

THE RISE OF

RETAIL1970- 2000

THE RISE OF THE

CONSUMER2000 AND BEYOND


The EXPERIENCE at the shelf has changed

Consumer

Marketing

More

Competitors

Digital

Content

Higher

Expectations


End to End In Store Consumer Experience

PRODUCT AVAILABILITY

PLACEMENT

ONLINE EXPERIENCE AT THE STORE

CONSUMER MARKETING

COMPETITIVE PRODUCTS

POP MATERIAL

IN STORE EVENTS

PRICE

PROMOTIONS CONSUMER SERVICE

PRODUCT ASSORTMENT

SOCIAL MEDIA


The Early Signals of a Profound Industry Transformation

9 out of 10

big brands

lost groundAS STORE BRANDS AND SMALLER BRANDS WON

100 brands

collectively

declined 0.8%IN REVENUES, EVEN AS OVERALL SALES INCREASED 6%

Top 100

CP brands

mostly lostSALES AND SHARE IN PAST YEAR


SAP Hybris Integrated Sales Platform for CP

In Store Digital Experience

Manage External information like POS or Market performance

Consumer Marketing

Direct Store Delivery

E-commerce Retail Visit Planning, Execution and Monitoring

Trade Planning, Optimization, Execution & Settlement

Distributor Management

Customer Business Planning

Customer and Consumer Service.


Industry Challenges

10%20%30%40%50%60%60%

OF CONSUMERSWILL SUBSTITUTE AND

SWITCH BRANDS DUE TO AN

OUT OF STOCK PRODUCT

10%20%30%40%50%60%82% OF CONSUMERS AGREE THE PRICEOF A PRODUCT IS MORE

IMPORTANT THAN BRAND

10%20%30%40%50%52% OF EDLP SPEND ARE ASSOCIATEDWITH EVENTS THAT DELIVER

NEGATIVE PROFITABILITY WITH

AN AVERAGE EVENT ROI OF

10%20%30%40%50%60%80%

-20% -50%

OF MERCHANDISING TRADE SPEND ARE ASSOCIATEDWITH EVENTS THAT DELIVER

NEGATIVE PROFITABILITY WITH

AN AVERAGE

EVENT ROI OF -10%(PwC Strategy&)

(PwC Strategy&)

RETAILERSARE DEMANDING

BUSINESS PLAN TAILORED

FOR THE BUYER IN THEIR

OWN LANGUAGES AND KPIS

RETAILERSARE EXPECTING

MANUFACTURER SUPPORT TO ACHIEVE THEIR REVENUE

AND PROFITABILITY TARGETS


Incrementally

better?

Fundamentallydifferent.


The trade management revolution is a full solution re-launch

One Development Team

Continuous Improvement

Address Functional Gaps

UX Innovations

1. 2. 3. 4.

Customer-Driven Roadmap

S/4HANA Strategy

Leverage the power of SAP innovations

• SAP HANA

• SAP Fiori

• Machine Learning / AI

More Pre-configured Options

5. 6. 7. 8.


Imagine yourself as part of the Trade Management Revolution

DRIVE PROFITABLEGROWTH WITHOPTIMIZED ACCOUNTAND PROMOTIONALPLANS.

COPY- RUN - PAYSTRATEGIES OF THE

PAST WITH POORPERFORMANCE.


REVOLUTIONIZING Trade Management

SITUATION TODAY FUTURE SITUATION

OFFLINE, DISCONNECTED TOOLS DRIVE

POOR PERFORMANCE

▪ Customer plans not aligned to company

objectives; roll-up is difficult

▪ Implemented TPM systems that often merely

a “checkbook”

▪ Promotions not consistently analyzed

▪ Repetition, repetition, repetition…with the same

sub-optimal results

DRIVE PROFITABLE GROWTH WITH OPTIMIZED

ACCOUNT AND PROMOTIONAL PLANS

▪ Holistic approach to complete P&L management

across all volume, spend and revenue

▪ Transforms customer relationship from a

promotion manager to trusted advisor

▪ Expand planning and execution beyond trade

▪ Extend performance measures to true post event

analysis and profitability

Copy Run Pay

RETAILERMANUFACTURER

CONSUMERS


We are driven to resolve high dissatisfaction levels in the marketplace

Only 19% of survey

respondents were

able to reduce trade spend

as a percent of sales.

TRADE SPEND REDUCTION

1

Key management focus areas

72% of companies cite the

need to match historic

spend levels or hit a

specific revenue target

as the primary drivers,

not profitability.

FUNDING ALLOCATION

2

Nearly all companies

reported event-

profitability/ROI as the

primary measure of

success; however, 59%

struggle to translate

learnings into future

plans.

CUSTOMER PLANNING

3

2/3rd of respondents

reported not having

predictive or post-event

analytics systems

capabilities

SYSTEMSAND TOOLS

4


SAP TRADE MANAGEMENT

From TPM to revolutionary Trade Management

SAP Trade Management

enables consumer products sales leaders

to be customer P&L owners to drive revenue, volume, and profitability

that enables both internal margin growth and customer category growth

DIFFERENTIATION

▪ Drive return on relationship

▪ Unleash new growth

▪ Innovate to lead

FOCUS

▪ Sense/predict performance

▪ Optimize outcomes

▪ Act with confidence

AGILITY

▪ Coordinate functions /

channels

▪ Align tactics with targets

▪ Execute at speed


Sales Planning

and Budgeting

Customer

Planning

Promotion

Planning

Execution and

Settlement

Revolutionizing trade management with a holistic, integrated process

from HQ target setting to execution


Sales Planning

and Budgeting

Customer

Planning

Promotion

Planning

Execution and

Settlement

Post evaluation Internal/external actual dataInsights

Machine Learning

Statistical forecasting and optimization

Model driven

Revolutionizing trade management with a holistic, integrated process

from HQ target setting to execution with wrap-around optimization



Only 19% of survey

respondents were

able to reduce trade spend

as a percent of sales.


1

KEY MANAGEMENT

FOCUS AREAS

WHAT TRADE MANAGEMENT

DOES FOR YOU

Only sales leaders with accountability for all volume can develop programs that drive

customers’ category growth and build baseline volume to drive their own margin growth.

Enables CP sales leaders

to drive growth beyond

short-term measures of

promotion effectiveness

to longer-term mutually

defined targets including

category growth,

sustainable baseline

volume growth and

margin growth.



KEY MANAGEMENT

FOCUS AREAS

72% of companies cite the

need to match historic

spend levels or hit a

specific revenue target

as the primary drivers,

not profitability.

FUNDING ALLOCATION

2


DOES FOR YOU

Own the entire p&l and prioritize investments and growth opportunities based on objective

assessments of customer value and profitability

Enables sales leaders to

sense and predict both

the presence and severity

of potential risks to

revenue, volume and

profitability relative to

both company and

customer targets and

KPIs in real-time.



KEY MANAGEMENT

FOCUS AREAS

Nearly all companies

reported event-

profitability/ROI as the

primary measure of

success; however, 59%

struggle to translate

learnings into future

plans.

CUSTOMER PLANNING

3


DOES FOR YOU

Visibility to overall return on the relationship versus simple measures of promotion

effectiveness, enabling both cp sales leaders and their customers to prioritize jointly future

strategies, investments and programs.

Understand

implications for all

strategic and tactical

decisions vs. full-year

targets, plans and KPIs

for both parties. Enable

fact-based decision

making to drive

activities best aligned

to targets



KEY MANAGEMENT

FOCUS AREAS

2/3rd of respondents

reported not having

predictive or post-event

analytics systems

capabilities

SYSTEMSAND TOOLS

4


DOES FOR YOU

Identifying “best course” options for full kpi achievement considering past performance,

forecast results, real-time market conditions and other constraints.

Wrap-around

optimization supports

every single trade

management process

step providing machine-

learning insights that

drive performance

analytics as well as future

predictions and

optimization



KEY MANAGEMENT FOCUS AREAS WHAT TRADE MANAGEMENT DOES FOR YOU

Only 19% of survey respondents were

able to reduce trade spend as a percent

of sales.


1Enables CP sales leaders to drive growth beyond short-term measures of

promotion effectiveness to longer-term mutually defined targets including

category growth, sustainable baseline volume growth and margin growth.

72% of companies cite the need to match

historic spend levels or hit a specific revenue

target as the primary drivers, not profitability.

FUNDING ALLOCATION

2Enables sales leaders to sense and predict both the presence and

severity of potential risks to revenue, volume and profitability relative to

both company and customer targets and KPIs in real-time.

Nearly all companies reported eventprofitability/ROI

as the primary measure of success; however, 59%

struggle to translate learnings into future plans.

CUSTOMER PLANNING

3Understand implications for all strategic and tactical decisions vs. full-

year targets, plans and KPIs for both parties. Enable fact-based decision

making to drive activities best aligned to targets

2/3rd of respondents reported not having

predictive or post-event analytics

systems capabilities

SYSTEMS AND TOOLS

4Wrap-around optimization supports every single trade management

process step providing machine-learning insights that drive performance

analytics as well as future predictions and optimization

Source: Strategy& Trade Management and Customer Planning Survey, Strategy& analysis Source: SAP


Breaking modern trade management into pieces

SAP Trade Promotion

Planning and ManagementSAP Customer

Business Planning

SAP Advanced Trade

Management Analytics

SAP Demand Signal Management

Customer Driven

Roadmaps


SAP TRADE MANAGEMENT BUILDING BLOCKS


SAP Trade Management provides and holistic and integrated solution from HQ

target settings to execution, with wrap-around optimization.

With Customer Business Planning now combining Manufacturer and Retailer

perspectives to plan faster and more effectively.

BENEFITS

▪ Manage overall process to drive decisions that

balance non promotional and promotional activities

▪ Allow Account Managers to understand how to

impact volume and margin from internal and retailer

perspective while planning

▪ Actively manage execution and towards overall plan

and foster shift towards profitable promotions

▪ Provide real-time visibility into key performance

indicators (KPIs) for daily measurement of business

performance, target achievement and ROI.


Go beyond CRM with SAP hybris

INDUSTRY SPECIFIC PROCESSES

SOCIAL & MACHINE LEARNING ANALYTICS

SERVICE SALES MARKETING COMMERCE

SAP HANA CLOUD/CUSTOMER ENGAGEMENT PLATFORM

TRADE

E-MAIL

IN-STORE/

BRANCH

CONTACT

CENTER

SEARCH

KW/ADS

WEB

MOBILE

SOCIAL

MEDIA

IOT

MARKET-

PLACES

CONTENT

CENTER

DIGITAL

GOODS

MARKETING

CHANNELS

REAL-TIME CONTEXT

CONSISTENT,

END-TO-END USER

EXPERIENCE

ACROSS CHANNELS &

DEVICES

SAP Model Company for Trade Management


Time to value is key in assuring a successful digital transformation

Long and costly implementation

times

Line-of-business (LoB) and

industry-specific know-how

recognized as a need, not a nice

to have

Fast-changing business

challenges requiring a flexible

solution

SAP Model Company service to

deliver preconfigured, end-to-end

SAP reference solutions

Tailored to an industry or line of

business with end-to-end

business processes

Enriched with real life experience,

delivered as an engineered

service

Accelerated innovation adoption

and simplification of the digital

transformation

THE

challengeTHE

solutionTHE

outcome

Transform to SAP S/4HANA

Accelerate implementation

for faster time to value

Adopt early and fast, and free

up resources for innovation


Time to value is key in assuring a successful digital transformation

Accelerated innovation adoption

and

Simplification of the

Digital Transformation

Pre-configured, end-to-end

SAP reference solutions

Tailored to an industry or LoB

Enriched with real-life experience

Delivered as a service

OUR

ambitionOUR

answer


A SAP Model Company is a pre-

packaged, ready-to-use, end-to-end

reference solution, tailored to an

industry or line of business.

It comprises state-of-the-art

applications and proven best

practices and encapsulates the

experience from successful, real-life

digital transformation projects.

Embedded in an overall

transformation road map and

delivered as a service, a model

company driven approach enables

you to reduce cost, decrease risk, and

accelerate adoption during discovery,

preparation, exploration, and

realization activities.

The SAP Model Company


Accelerators

Business Content

Configuration and how-to

guides, test and demo scripts,

implementation tools

Business process hierarchy,

end to end scenarios and

process diagrams by roles

Preconfigured Solution

Engineered Service

Available as a ready to run

appliance, incl. all applications,

configuration and sample data

Hand-Over and enablement

workshops to jumpstart discovery,

exploration and realization

Foundation

Activate Industry Reference Architecture Digital Business Framework

The SAP Model Company

Building Blocks of a unique Offering in the Market


Sales Planning & Budgeting1

Customer Planning

& Optimization2Promotion Planning

& Optimization3Execution & Settlement

4▪ Sales Planning & Budgeting covers all

necessary Sales Management activities to

initiate and facilitate the account planning

process. It results in the proactive execution

of the plan and the regular forecasting

cadence after planning turns into customer

management.

▪ Customer Planning & Optimization covers

all Account Manager activities to create &

understand the customer plan P&L by

understanding customer volume and use

this plan to work against the targets given

by the organization.

▪ Promotion Planning & Optimization focuses

on the entire sales organization from

customer service to field sales to ensure the

accurate & detailed planning & execution of

specific promotional activities in

collaboration with the customer.

▪ Execution & Settlement contains all of the

necessary steps in the sales organization

and in adjacent functions to make sure that

non-promotional & promotional activities

planned by the KAM are being seamlessly

executed in the day to day business both

internally and at the point of sales

ExecutionPlanning Planning ExecutionExecution Planning Execution

Sales Planning & Budgeting1

Customer Planning

& Optimization2Promotion Planning

& Optimization3

Planning

Execution & Settlement4

▪ Organizational sales volume, revenue & profitability

as a waterfall for plan, actual & forecast (LE)

▪ Investments vs. revenue vs. ROI vs. budget

▪ Key promotional & marketing activities

▪ Major accounts (HQ deals)

▪ Competitive positioning in retail channels &

category-specific product portfolio analysis

▪ Customer-specific sales volume, revenue &

profitability as a waterfall for plan, actual & forecast

▪ Investments vs. Revenue vs. ROI vs. Budget

▪ Commercial terms strategy

▪ In depth understanding on planned promotional

activities and promotion history

▪ Internal COGS & trade spends

▪ Post Event Analysis results

▪ Tactic-specific uplift factors

▪ Off & On Invoice Rebates

▪ Promotion Survey Results

▪ POS data

▪ Payment Schedules

▪ Promotion Compliance & Perfect store

▪ Promotion accruals & Claims data

▪ Out-of-Stock & Out-of-Shelf

▪ Funds & Deduction Updates

Analytics Data ModelsKPIs Analytics Data ModelsKPIs Analytics Data ModelsKPIs Analytics Data ModelsKPIs

Optimization Optimization Optimization Optimization

SAP Model Company for Trade ManagementAsset: Business-centered Trade Management Reference Processes


I – Sales Planning & Budgeting

▪ Responsibility Areas

▪ Marketing Campaigns

▪ Funds Management

▪ Fixed Budget Postings

▪ National Promotions

▪ Headquarter Promotions

▪ Targets (KAM-Internal and Buyer-Retailer)

SAP MC4 Trade Management for Consumer Products v1

Process scope*

II – Customer Business Planning

▪ Buyer setup and targets

▪ Buyer specific planning product hierarchy

▪ Best practice trade spends

▪ Assortments

▪ Baseline Volume Planning for Key Accounts

▪ Promoted/non-promoted Volume Planning for non-Key

Accounts

▪ Fast Promotion Entry

▪ Calendar based planning

▪ Budget monitoring

▪ Plan approval

▪ Plan Versions

III – Promotion Planning

▪ Long Term and Short Term promotion types at account

hierarchy and product level

▪ Best practice trade spends and tactics

▪ Promotion volume planning

▪ Bulk actions for copy/change/approvals

▪ Status driven events / overlap check

▪ Promotion life cycle phases

▪ Promotion monitoring

IV – Execution and Settlement

▪ CRM based accrual calculation (funds)

▪ Invoice deduction and claim processing

*Process scope is based on the Trade Management Golden Process definition


SAP TRADE MANAGEMENT VIDEOS

• Solution Overview

• The Trade Management Revolution – Reimagining the End-to-End Process

• Trade Management Solution Overview

• Henkel Co-Innovation Story

https://youtu.be/oVSJvIQp1UA

https://youtu.be/L2ne0LaMXGg

https://youtu.be/mTLWLC6o0Xo

https://youtu.be/oT89A8JPPOI

Yavuz Durgut

Industry Value Manager – Consumer Industries

E [email protected]

M +971 56 216 8755

www.sap.com

mailto:[email protected]

http://www.sap.com/

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