Joint business planning with your customers can be a tough task to get right. It takes time, resources and a lot of soul-searching over the “right” plan for volume, sales, margin and joint investment with customers. Margins are tight and the wrong assumptions can make or break the success of your annual plan. Getting this right is tough, however help may have arrived!
Too many spreadsheets, too little time
It’s a common scenario, familiar to all consumer products businesses: Excel spreadsheets constantly emailed between business planners, endless meetings, unnecessary duplication of planning efforts, and a lack of visibility of the total plan and how it impacts the P&L. The lack of one common set of figures results in a higher need for reconciliation and more effort for you in explaining the numbers.
How can the pain and uncertainty be removed from this process?
This is exactly the challenge SAP has attempted to address with its latest offering in the trade management space: Customer Business Planning, (CBP). You may say that creating a new product complicates things and ask what’s wrong with using SAP’s Trade Promotion Management (TPM), a mature and widely used solution?
TPM remains a powerful, integrated tool that covers an extensive range of business processes from promotion planning through to execution and evaluation of the effectiveness of spend. CBP builds on the capability of TPM to cooperatively plan trade spend with customers, which is traditionally an area lacking in its functionality and often implemented using other tools, sometimes outside of SAP.
To help you to understand this difference let’s go back to the start and consider how CBP addresses some of the challenges faced by consumer businesses.
Challenge 1: Reduction of offline, siloed planning and duplication
CBP has an intuitive UI accessed via a web browser, bringing the user experience into line with the latest offerings from SAP, particularly those that use Fiori (if you don’t know what that is, read more here). Its architecture and integration with the wider Sales & Operations process via SAP TPM and external data sources ensures the following:
- An online plan, accessible to all required stakeholders in your business.
- The ability to switch between manufacturer and customer view for KPIs to ensure you can also consider the retailer’s perspective at an individual, personalized level.
- The ability to plan both promoted and non-promoted volume in the same place.
In my view, it’s clear that a joined up plan that incorporates all necessary inputs can be realised with CBP. With tight integration with SAP S/4HANA expected to come soon, this can only strengthen as the product matures.
Challenge 2: A need for scenario planning to analyse the effect of assumptions, constraints and objectives
A typical use of multiple offline spreadsheets is to analyse planning scenarios. This quickly becomes complex and hard to govern and manage. CBP has the ability to plan scenarios and take action on the result. Some key features are as follows:
- Fast operational planning to test and reconcile bottom-up plan with top-down targets.
- Profitability and effectiveness KPIs for plan is updated in real-time thanks to in-memory technology.
- What-if scenarios/scenario planning functionality and the ability to easily turn a scenario plan into the operational plan.
- Tight and real-time integration with TPM to keep track of the contribution of planned trade spend activities to the overall plan.
Scenario based planning is important in accelerating the joint business planning process and I can see this is a key component of CBP and one of its main strengths. SAP have taken learnings from previous planning tools to ensure ease of use.
Challenge 3: One version of the truth
Back to my earlier point regarding the proliferation of offline spreadsheets making “one version of the truth” an aspiration rather than a rule. CBP exists to ensure one version of the plan is always available, which is realised via the following features:
- Different plan views depending on your need: a promotion plan view, a P&L view including customer perspective and product hierarchy view across multiple KPIs.
- The ability to interact with the plan using a graphical interface or table view and real-time (planning) calculations.
- Multiple integrated calendar views.
The need for different perspectives on a plan often leads to multiple versions of the truth. To me, there’s a clear benefit in how CBP addresses this by ensuring you have access to multiple views of the plan and the ability to interact with the plan in each view.
Beyond the features listed above, embedded predictive analytics is on the roadmap and given SAP’s investment recently in this area this could further enhance CBP, for example in statistical forecasting or optimisation of planning scenarios.
Whilst I’ve focused on three main challenges, depending on an organisation’s systems and processes there are likely to be others too. Globally, the maturity of different markets can have a bearing on the suitability of the use of tools such as CBP and it’s important to ensure a business case is in place. You could base this on an assessment framework using something as simple as a questionnaire with the right questions to assess process and technical fit by market.
I welcome CBP as a timely addition to SAP’s trade management suite of tools, particularly now that in-memory solutions make real-time planning a reality. If you are looking for a planning tool that truly gives you a full 360-degree view of your business and customers, CBP is definitely something for you to consider.