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View full profileJim Cook

Head of CRM
Bluefin Solutions

SAP TPM - evolution not revolution

SAP Trade Promotion Management (TPM) has been around for a while now and it seems an appropriate point to assess where it is on its journey and where it's going. Clearly I've been involved with SAP TPM for too long as I seem to be already talking about it as though it is a living, breathing member of my family! But anyway back to basics...

What is it? 

In simple terms it's a set of processes to help organisations manage their trade spend. These are the financial incentives they use with their retailers or distributors to encourage them to stock and promote their brands. However, this hides complexity in terms of the different schemes that might be run, how they are created, planned and executed, ans whether they actually work. See Seb Jones' blog on some of the challenges in this area. You also need to control the payments resulting from the promotion being run.

Technically, what is it?

The promotion object is a special version of a marketing element and so it sits in SAP CRM. The promotion planning and validation is done using BPS in BW. In order to plan a promotion you need the base volume forecast from APO and you need to send the promotional uplift volume back to APO. The collection of rebate values and creation of off-invoice discounts is done in SD in ECC and the collection of actuals is done in CO-PA and passed to BW. Deduction claims start in Dispute Management using FSCM in ECC, with the claims being processed back in CRM.

So as you can see, it's a complex technical solution that sits across many elements of the SAP landscape. "So what", I hear you cry. Well it does mean that it's hard to  implement, especially if many of these standard back office processes are missing BUT it also makes it incredibly powerful because it is fundamentally integrated with your billing, financial and reporting processes.

How has SAP TPM developed...and is it any good?

It started a number of years ago now with a few early adopters (ConAgra, Wrigley, Sara Lee to name a few) and one big co-development partner Nestle. Nestle has continued to work closely with SAP and is still on a roll-out and upgrade programme. We started working with TPM in 2006. With the early versions of the product, the focus was what I call core operational TPM - creating and planning the promotion and releasing the data for pricing into ECC for processing. Since then, the product has developed in a number of ways. Firstly, the user interface was rewritten for all of SAP CRM so the account manager interface is now web based, simple and easy to use. In the same version, Claims Management and Funds Management were added - I've already mentioned claims; funds is a way of controlling spend across different dimensions other than the individual promotion e.g. customer group and brand. In newer versions - CRM v7 and v7 EHP1 - the functionality has again been improved (particularly the marketing calendar) but not the step changes mentioned above.

What does this mean?

A number of organisations considered SAP TPM a few years ago, decided it was still too immature and hit the pause button. However, the core part of the solution has been around for a while, its stable, it works and yes it can provide real business benefit.  Admittedly this isn't quite the case for some of the newer functionality (for example around claims integration) however it is becoming mature as more organisations implement these processes. So my advice to those who hit the pause button...you can press play now!

So what's next?

Well I don't see fundamental changes in the core solution. Yes there are issues, particularly the fact that the planning functionality is based on old technology. There is also still confusion as to how some of the integration should work, particularly around accruals, but these are minor in the grand scheme of things.

The exciting aspects for me are how this core solution can be expanded and provide greater benefit to the rest of the commercial organisation. SAP TPM is just one element of a potential planning solution - see Sue Kirby's blog on this - and SAP is also publishing BusinessObjects based apps for trade promotion effectiveness and optimisation. A mobile app for in-store execution and validation has also recently been announced. How all these solutions fit together isn't yet clear however, we're working on it!