The Relationship Between Your ERP and TPM Solutions
The right software solution means the difference between wasted time and time well spent.
It’s the difference between scrambling for insights and having them automatically generated in visual dashboards.
The right software solutions should accelerate and simplify the revenue realization and for many in the CPG industry, that starts with ERP and trade promotion management software partnerships.
The Case for the Cloud
Because of the pandemic, many of us have moved our work life into our homes. As more of us work remotely, cloud software solutions that increase collaboration, visibility, and business outcomes are indispensable.
Software as a service (SaaS) solutions offer speed, agility and adaptability. SaaS has become the standard in nearly every industry.
Companies typically decide to upgrade or add software to their suite of tools to grow business, expand efficiencies and gain visibility.
Determining your motivation for new software is no small undertaking. Growth and change are the primary reasons CPGs upgrade or add to their tech stack.
Collecting data and automating business functions all starts with a CPGs ERP system.
- Growth: In CPG, you have to be good at tracking and quality control – as CPG companies grow, they bolt on key pieces of supply chain technology, and eventually, “we see it break or become too manual,” says Blacksmith Applications’ Account Executive Matt Caldwell.
- Change: For every organization, there comes a time when leadership recognizes that their current software isn’t sparkling and new. If your legacy ERP system is outdated and causing inconveniences for your team, then it’s time to reevaluate. Some CPGs site the reason for change as a digital transformation – a time to (according to CIO.com) “uncover new monetization opportunities.”
The reasons CPGs look at ERPs are really the same reasons they look at trade promotion management software vendors. With trade promotions, once you’ve grown to a certain transaction volume, it’s time for automation.
Dual System Evaluation
Evaluating ERP solutions and trade promotion management software solutions at the same time is beneficial. “Looking at both ERP and TPM system capabilities right from the start gives CPGs a stronger understanding of what their tech stack should look like and there’s no surprises related to budget,” adds Caldwell.
First, let’s backup… You might be thinking “Why do I need a TPM solution? Can’t I just stick with the promotion management module that’s built into the ERP?”
Sure, some ERP systems already have a trade promotion module or elements of pricing software, but is it the right functionality for you? Does that module have all of the capabilities you’re looking for?
System Requirements
We suggest that CPGs write out their trade promotion management software requirements:
- We’ll put in new tech to transform business…
- Workflow automation
- Faster deduction validation
- Ability to analyze in-store promotions automatically
- We’re going to have software help us do our jobs…
- Create efficiencies
- Ability to change our plans to create profitability
- Report the data more often
If you document your business requirements, you guarantee that those ERP trade modules or TPM capabilities match your objectives.
There’s often a mentality of wanting to stick with your ERP provider across the board – it’ll be easier on the company, it all works together out of the box, right?
That’s not always the case.
No ERP providers offer CPGs ALL of the functionality that is required in the complex trade spend world. Because of this, many CPG companies decide to address their needs for trade promotion software at the same time as their ERP evaluation.
A trade promotion software should really simplify your trade spend processes. TPM enables efficiency, control and profitability. And a great TPM vendor will have an ERP agnostic solution.
What is ERP Agnostic?
When software is marketed as ERP agnostic, it means that it can successfully integrate with your ERP software. Being agnostic refers to a system’s ability to combine various software, hardware, and/or business systems. For example, Blacksmith TPM and TPO solutions are ERP agnostic. We’ve implemented our trade management solutions more than 150 times with 90+ customers in the last 15 years. We’ve proven successful integration with 20 different ERP systems (among them: SAP, Oracle, Microsoft Dynamics, Sage, Prism, Infor, and Aptean).
Evidence of Success
Smithfield Foods: Leading Change through Integration
Smithfield’s history of acquisition and consolidation had, unsurprisingly, created a hodgepodge of internally used technologies. Smithfield implemented SAP HANA to manage the new and the old business from start to finish.
Since Smithfield was combining 2 separate divisions under a single SAP instance – each with a different trade tool in use – they needed to decide on a single trade tool.
The steering committee evaluated each TPM solution, and unanimously decided to go with Blacksmith TPM – largely because of its user-friendly interface and history of integrating successfully with SAP tools. The laborious process of trade, retail, and foodservice requires a large number of users with varying skill sets to access their trade management tool, so front end user experience became the big deciding factor.
At the end of the day, these changes required a big investment, but the end-to-end system integration offers enough benefits to offset any difficulties faced during the transition.
Kraft Heinz Ingredients: Eliminating Manual Pricing with TPM / ERP Relationship
If you merge commodity pricing from multiple sources every month, then you can understand the Kraft Heinz Ingredients’ team excitement when they could rely on TPM functionality instead of loading a ton of data into their ERP system.
Blacksmith TPM’s formula pricing module automatically retrieves commodity prices from designated commodity sources. In the TPM’s module, the user creates a program and selects the schedule for how often the program should price (weekly, monthly, quarterly). Next, you build the formula calculation based on your specific commodities and weighting set for that specific item. Once the program is approved, the pricing interfaces to your ERP. Based on the program you created, it automatically reprices with the updated commodity data.
Since formula pricing interfaces with SAP, there is NO manual uploading. The automation has saved the Kraft Heinz Ingredients team over a whole days’ worth of time every month.
What Do You Get with Blacksmith TPM?
The Fact Sheet: Blacksmith’s tiered TPM structure has the functionality your business needs:
- Approval workflows
- Calendar promotion planning
- Contract management
- Bid management
- Margin analysis
- Deduction management
- Claim validation
- Off-invoice allowances
- Reporting templates
The Brief on Trade Promotion Management System Expertise
While ERP vendors say they have promotion management covered or can write customizations, in reality, there are a million parts to this trade spend functionality puzzle. “TPM is a specialty, niche application. It’s important that you work with the right software provider,” continues Caldwell.
“All the stuff we market is true. Our credentials, knowledge, networking, leadership, education… everything we do is to help the manufacturer,” says Blacksmith Applications’ Account Executive David Thorne.
The motivation behind Blacksmith’s tech solutions has always been to find a better way to help you spend money better.
Questions to Ask TPM Software Vendors
We suggest asking trade promotion vendors these five questions:
- How often does the TPM system sync with the ERP system?
- What’s the product roadmap? What new technology or functionality are you thinking about for the future?
- What’s involved in a system upgrade? What fees am I looking at?
- How can I use this data to draw reports and create insights?
- Can I talk to a few customers?
ERP Software Evaluation
CPGs of all sizes will tell you the importance of ERP software; a system that can manage backend operations. ERP software is a company’s first step to automation. It manages day-to-day business activities; specifically accounting, procurement, risk management, and supply chain.
ERP software is a data source designed to give companies real-time insights, reduce costs and unify business analysis.
When Should I Consider Adding or Upgrading My ERP?
- Expansion – If your company is quickly growing
- Broken – If your current solution is outdated or manual
- Vendor Support – If the vendor has decided to stop supporting your system
If you’ve checked one of these boxes, then it’s a great idea to complete a full assessment of your needs.
Important considerations before you implement a change:
- Benefits of change
- Technical needs
- Organizational change management
- Budget
- Time
- Goals
Questions to Ask the ERP Vendor
Ask ERP software vendors these five questions:
- How often do you upgrade the system? Are there costs involved?
- What’s the product roadmap? What new technology or functionality are you thinking about for the future?
- Is training available? Is the solution easy to use?
- How can I use this data to draw reports and create insights?
- Can I talk to a few customers?
The Verdict: A Deep Relationship
There are serious benefits to having best-in-class solutions in your technology stack – from ERP to TPM. The connectivity between your ERP and promotion management systems will improve your productivity and add to your profitability.
Our goal is to help you accelerate lucrative business decisions by helping you spend smarter, analyze faster, and increase efficiency.
