By: David McCarty, CPG Industry Executive Consultant
In this article:
Over the past three decades, Consumer Packaged Goods (CPG) companies have attempted to find cutting-edge solutions to better manage and optimize their trade promotion investments through the use of Trade Promotion Management (TPM) technologies. Yet, despite excitement at the onset, efforts to derive greater returns from these technology solutions have not gone according to plan.
After a lengthy and costly failed implementation, sales teams revert to using Excel as their planning tool and CPGs are right back where they started - researching TPM providers for another round of bidding on a solution that may or may not improve results.
Why Excel continues to dominate
Since its creation in 1985, Microsoft Excel has been an essential tool in the corporate world. Its widespread use demonstrates how integral it is to businesses of all sizes and scopes. Excel is user-friendly, adaptable to unique needs, readily available, and easy to deploy. Due to these reasons, it remains widely popular as a technology enabler for the management of Trade Promotion processes.
While functionality has been added to Excel, businesses are constantly questioning if it is the optimal tool to do strategic business planning, specifically TPM. As data granularity and availability grow in complexity, Excel can present scalability issues and struggle to provide the necessary security assurance of data veracity. Moreover, a lack of auditability may put some organizations at risk for discrepancies or misreporting.
It's time for an alternative approach to Excel in order to ensure long-term success and explore more efficient ways to promote traded products with better ROI outcomes.
Point solutions Challenges
There have been many attempts by CPG companies to address Excel's challenges by using point solutions or modules within broader solutions such as SAP TPM. However, they often require specialized IT personnel to install and maintain, creating a need for a large IT budget. And flexibility is limited, leaving organizations at risk of not being able to adapt to ever-changing market conditions.
Over the last ten years, TPM point solutions have transitioned to the cloud. Unfortunately, this transition has resulted in diminished functionality and performance as well as user experience issues. Today, the majority of CPGs have adopted a hybrid model of TPM point solutions plus Excel to bridge the gap between transactional source systems and end-user dashboards. The stakes are high for CPGs since Trade Promotions are a key component of an overall Revenue Growth strategy.
Coca-Cola breaks the cycle with Anaplan
The Coca-Cola Company is a perfect example of how a leading CPG broke the revolving door of solution providers claiming to help companies better manage trade investments. Coca-Cola embraced the notion of Connected Planning back in 2017 and has since implemented Anaplan for Revenue Growth Management (RGM) and Trade Promotion Management.
At The Coca-Cola Company (TCCC), managing revenue growth is no simple task. It's a complex challenge that has been compounded by the company's vast portfolio of products coupled with a complicated distribution model leveraging numerous independent bottlers. The bottling partners service unique geographies around the world, each one characterized by distinct consumer interests and demands.
To achieve overall RGM objectives for all involved parties it's essential that these locally owned businesses collaborate in unison under one RGM plan that includes TCCC’s plans for trade investments.
Alex Durham, Director of RGM at The Coca-Cola Company, has overseen several Anaplan implementations. His team first started with a Data Hub, then implemented Long Range Planning and RGM models in Anaplan. Twelve Consulting Group, an Anaplan implementation partner, helped centralize master data across multiple stakeholder groups including standardization of planning hierarchies.
The next phase involved implementing Long-Range Planning models for North America and corporate to create 5-year plans within Anaplan. Our team also implemented models for the creation of an Annual Business Plan, including Bottler & Customer Collaboration, Volume Sales Planning, Sources of Growth / Innovation Planning, and Consensus Planning & Reporting.
"I put in the prior TPM system. We replaced that system with Anaplan. It is 95% cheaper and three times as fast." - Alex Durham
Overall, TCCC connected 65+ independent bottling companies into collaborative and centralized planning platforms to streamline Annual Business Plan development. As a result of aligning revenue plans, this flowed into revolutionizing their customer planning process and TPM. Anaplan allowed them to customize their business processes, while still using terminology that made sense to their business.
Alex Durham noted the high Anaplan adoption rate since the solution was built off of users’ specific needs. Additionally, due to the tool’s inherent flexibility, teams can now continually iterate and respond to the speed of the business with agility. This is a major difference for their team, as they are no longer reliant on IT.
"It allowed us to build a custom-fit tool for the way we work, with our terminology and our processes." - Alex Durham
Anaplan allows them to make adjustments on the fly and in real-time. With the flexibility of the solution and the high level of user satisfaction, the likelihood of falling back into the Excel trap is greatly reduced.
“This is a totally different ballgame and one I'm happy to be playing in. It's speed, it's happy users, its business results quickly, so I'm thrilled to be in this new paradigm.” - Alex Durham
How to break the cycle
You don't have to deploy a new TPM solution, watch it fail, only to revert to Excel. Coca-Cola is leveraging Anaplan to drive a smart revenue growth strategy - one that optimally meets consumer demands with the right products at an attractive price point.
Rest assured that Anaplan-enabled best practices can be deployed at companies of all sizes, from industry giants such as TCCC to smaller, regional brands.
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