1. business and industrial
2. advertising and marketing
3. marketing

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2
Global Sponsor
Managing Governance
Challenges in the
Rebate Lifecycle
Motorola Solutions Inc.
Case Study
Sonal Sood – Manager - Deloitte Consulting LLP
Earl Eldridge – Sr. Director - Oracle Corporation
02-Oct-2014
Brands Ultimate Goal…
Increase sales
Differentiate products from the competition
Increase product visibility and brand awareness
with the customers
Increase product’s consumption rate
Enlarge a product’s market segment penetration
Introduce new products and services in the market
place
4
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
© 2012 Deloitte Global Services Limited
Adopt a Go-To-Market Strategy
Sales Channel
1
Brand
1
Direct
Go-To-Market
•
•
•
•
Reseller
2
Customer
Brand
2
In-Direct
•
•
Brand
Distributor
Reseller
3
3
In-Direct
•
Engage companies
sales force
Ecommerce
Own-branded store
Re-seller represents
and sells a company’s
products or services
Other terms: LAR
(Large Account
Reseller), VAR(Value
Added Reseller), Direct
Market Reseller(DMR)
Distributor is engaged
to reach a larger market
often via multiple
channel partners
Other terms: Value
Added Distributor (VAD)
Sales channel is the conduit that drives the transaction
5
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
© 2012 Deloitte Global Services Limited
Go-To Market Funding Strategy & ROI
Allocate Funds
Marketing/Trade Promotion activities
•
•
1
Marketing
Funds
•
•
•
•
2
•
•
•
Advertising on TV and Radio
Marketing Collateral
development
Campaigns and Road shows
Online Promotions
Marketing R&D
Recruit new channel partners
with special "jumpstart"
allowances
Maintain and extend existing
partner relationships through
co-marketing efforts
Trade/Promotional allowances
to channel partners to boost
sales
Improve channel readiness by
enabling training, certification
Expense Realization
•
•
US GAAP : Report
as incurred
expenses as part of
“Selling, General
and Administrative
expenses”
SOX and FASB :
Expenses incurred
as part of
promotional
allowance programs
are viewed more as
perks, or simply
rewards for sales
performance, and
should be classified
as contra revenue
ROI
•
•
•
An investment in
supporting your
greatest asset, your
brand
Evaluate and
measure across
common expense to
sales ratios to
determine their
effectiveness
Perform Average
Selling price
analysis
Marketing expenses that successfully produce sales can offer a high return on investment
6
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
© 2012 Deloitte Global Services Limited
Trade Promotions Spend
2nd largest expense
item on P&L
70% of
marketing spend
10-25% of sales
67% of the Consumer & Industrial Product Companies indicate increasing trade promotion spend in 2014*
Types of Trade Promotions
Off-Invoice
Discounts
•
•
Manufacturer’s deduct
some percentage from the
invoice price for purchases
made during the deal
period
Quantity based and price
reduction in the form of
additional merchandise
Performance
Incentives
•
Discounts on merchandise
that the retailer sells at a
discount to its customers
•
Manufacturer pays the
channel after having
verified the sales
performed to end users
Sales Quotas
•
Discounts or rebate
payments offered to
retailers who meet the
manufacturer’s sales quota
Marketing
Development Fund
CO-OP
•
Program provides
partners with
marketing allowance
that accrue as a
percentage of sales.
•
Discretionary funds
provided by
manufacturers to their
eligible channel
partners based on the
negotiated goals.
Having an effective trade promotion strategy and process is critical in order for companies to benefit from ROI and
allocate funds for other strategic initiatives
* http://www.acosta.com- The_Trend_Behind_The_Spend/trend-behind-spend.pdf
7
© 2012 Deloitte Global Services Limited
How to design effective Trade Promotion execution plan?
Effective trade promotion practices involve the coordination of strategy, process, people and
technology.
4
3
Technology
2
•
•
1
•
•
Integrated planning, funding, rebate
accrual, payment and accounting system
Automation of rebate accrual and
accounting along with robust approval
workflow
Post implementation analysis and tracking
Accurate revenue forecasting analytics at
product/customer level
People
•
Train resources on global standard processes •
•
across the organization
Well defined roles and responsibilities
Incentives to maintain KPIs.
Process
•
•
Promotional Fund allocation and management
How funds are earned - discretionary or earned
accruals
•
•
Trade Promotional Plan creation and eligibility
criteria
Performance tracking for disbursing rebates
•
•
Accounting, claim audit and deduction
management, and settlement
Robust post-implementation monitoring and
adjustment
Strategy
•
•
Increase sales, overall or for a specific
product
Focus spending behind specific products(new
product introductions or “end-of-life” items
•
•
Increase utilization rates for select partners,
or select geography
Up-sell and Cross-sell products
•
•
Target new market segments
Onboard new channel partners
Channel Marketing is one of the most comprehensive disciplines in the business environment which extends corporate initiatives across multiple
disciplines including sales, marketing, finance, supply chain and sales operations
8
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
© 2012 Deloitte Global Services Limited
Trade Promotion Management process – Leading Practice
Strategize
• Historic sales data
• Historic consumption
data
• Past Promotion
results
• Distributor/Retailer
performance
• Marketing Plan
• Promotional Strategy
for the brand/Product
• Understanding of the
customer
9
Allocate
Budget
• Establish Allocation
method
• Topdown/Lump
sum
• Bottom-up
• Accrual based
• Allocate to customer
account group,
region, or specific
account
• Get approval from
Go-To-Market team
Create
Promotion
Plan
• The process to create
a plan should be reuseable on
quarterly/yearly basis
• Review and approve
• Products included in
the promotion
• Rebate accruals
based on expected
sales
• Payment methods
(off-invoice, bill back,
separate check etc.)
• Eligibility criteria
Internal/
Customer
Approval
• Discretionary trade
promotion allowances do
not require approval as
they are executed behind
the scene
• Other promotions need
approval from the
customer
• Share the promotion plan
in detail
• Communicate how
performance will be
measured in order for
customers to be eligible for
the promotion
• Lock down the payment
method for settling claims
against rebates
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
Execute
Promotion
Plan
Evaluate
• Review actual product
• Evaluate what’s
shipments to calculate
working and
rebate accruals
what’s not working
• Authorize
• Shift funds
payments/settle claims • Performance
against rebate accruals
Metrics
if customer is eligible
• % Lift
• Make payments (Check,
• PassCredit Memo, Onthrough
account etc.)
analysis
• Reconcile deductions
• Trade
against the promotion
Margin
plan and proof of
Analysis
performance
• Profit and
• Restrict booking manual
cost per
accounting entries
incremental
sale etc.
© 2012 Deloitte Global Services Limited
Trade Promotion Governance Process – Leading Practice
• Review actual product shipments sent to customers
• LOREM
Review
actual consumption data (sell through) rather than
IPSUM
on
shipments
prevent
buying
diverting
This is dummy texttoit is
not hereforward
to be read.
This isand
dummy
text it is not
to be read.
This is dummy text
it is not against
here to berebate
read. This
is dummy
• here
Authorize
payments/settle
claims
accruals
text
it
is
not
here
to
be
read.
This
is
dummy
text
it
is
not
here
to
be
read.
• Reconcile deductions against the promotion plan and proof
This is dummy text it is not here to be read.
of performance
Strategize
Allocate
Budget
Create
Promotion
Plan
• Align program with the current forecast of total
sales, spending and customer performance
• Ensure promotions programs align with strategic
goals and plan
• Modify the program to account for variances
• Obtain approval for revisions – as it has an impact
on projected revenues or budget
• Discontinue promotions which are not profitable
• Make accounting adjustments where applicable
10
Execute
Plan
Customer
Approval
Adjust
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
Evaluate
Monitor
• Track Average Selling Price
(ASP)
• Track Actuals vs. Plan
• Actual revenue generated
• Participation
• Compliance with Promotional
parameters
• Prevent Out-of-Stock during
promotional period
• Expenses and Liabilities
Enable business process with Channel Revenue Management
Strategize
Allocate
Budget
Create
Promotion
Plan
Execute
Plan
Internal
Approval
Evaluate
Adjust
Process
Enablement
11
Oracle Channel Revenue Management
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
Monitor
Case Study
About Motorola Solutions
TECHNOLOGY
LEADERS
GOVERNMENT
ENTERPRISE
NEXT
GENERATION
ASTRO
PCR
TETRA
PRIVATE
BB
iC&C
iDEN
MCD
ADC
RFID
WLAN
CEC
SOLUTIONS
DRIVEN
PRODUCT
+ APPS
+ SERVICES
CUSTOMER
FOCUSED
VERTICALS
GOVERNMENT
13
MANUFACTURING
& FIELD MOBILITY
TRANSPORTATION
& LOGISTICS
RETAIL &
HOSPITALITY
Footer
This
presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
ENERGY &
UTILITIES
EDUCATION &
HEALTHCARE
© 2012 Deloitte Global Services Limited
Motorola Solutions Inc. Channel Go-To-Market Strategy
Goals
Strategy
1
End-User
Motorola Solutions Inc.
Marketing Distribution
Distributor
14
2
Reseller
• Increase Sales of Products
and other value-added
services by engaging more
reseller in new markets
• Drive transactions at the
point of sales by having
channel partners promote
products vs. the competitions
• Improve channel readiness
by enabling training and
sales incentive programs
• Promote cross-sell and upsell
Reseller
3
Trade Promotions
Promotion Construct
MOU( Memorandum of
Understanding) : Channel
•
Significant business
volume and complex
rebates structure e.g.;
Tired discounts by
dollar volume and
quantity
•
150+ MDF, CO-OP,
MOU, SF) across 12
countries
•
Country specific
requirements adds
another layer of
complexity
partners earn a rebate on
their purchases once their
revenue
target/KPIs/measureable
criteria are reached
MDF(Marketing
Development Funds):
Discretionary funds
allocated to partners to help
them create and participate
in joint marketing and
business development
programs that can help to
increase sales of Motorola
Solutions products and their
value-added services.
CO-OP: Designed to help
business partners leverage
valuable resources to
enhance business
development initiatives
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
© 2012 Deloitte Global Services Limited
Issue-to-Impact
Issue
Process
• Rebate calculation inaccuracies due to lack of system
capabilities to use accurate data to compute simple to
complex rebates
• Manual creation of JE for Expense and Liabilities in GL
results in transaction traceability and audit issues
• Average Selling Price (ASP) for shipped and backlog
orders is not reflected accurately until end of the month
• Everything is booked at Invoice price and during the end of
the month the ASP suddenly drops
• Inability to course correct within an incentive program
duration
• Manual claim settlement process results in inaccurate and
duplicate rebate payments along with delays in payments
People
• Lack of communication between marketing, pricing and IT to
setup promotional pricing
• Resource intensive manual accrual, revenue forecasting,
and claim processing reduces operational efficiency and
increases operating cost
Technology
• Promotional plans maintained in Excel
• Shipment and Billing information was exported out of
reporting system in Excel and complex macros were written
to compute accruals and Journal entries
15
Solution
Impact
Process
• Automated accrual calculation and settlement process
• Established one global process for offer setups, accrual
tracking, revenue forecasting and claim settlement process
• Established a central command center to review the offers
and claims being created in the system and catch
inconsistencies
People
• Followed crawl-walk-run approach to train users on the
new tool and engaged them starting from the
CRP1through CAT
• Adopted train the trainer approach to train others and new
hires
Technology
• Automated Trade Promotion process using Channel
revenue management which has standard integration with
Pricing, OM, AR, AP, SLA, GL and other modules
• The solution is deployed with pure Oracle vanilla out-ofbox functionality in R12.1.3
• Reports in OBIEE were developed to provides users real
time visibility into rebates and liabilities for both shipped
and backlog orders
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
• Automated accrual calculation eliminated
inaccuracies rebate calculation
• Increased operating efficiency as users
can focus on more value added activities
• Provides visibility into net ASP for what is
sold and what's in the backlog in the
subledger for the first time
• Finance teams have real-time visibility into
liabilities and expenses resulting in
accurate revenue forecasting
• Sales operations teams can respond to any
ASP issues in timely manner and make
adjustment to offers midway
• Users can drill down to the original
transaction from the subledger
• Sales team can perform promotion health
check s frequently and alter strategy or
approach in a timely manner
• Timely and accurate claim settlement
processing
• Users were able to pull reports directly
from the GL during month end for
reconciliation purposes
© 2012 Deloitte Global Services Limited
Issue-to-Impact (Trade Promotion Governance)
Issue
Process
• Each region had established its own execution plan in
terms of how they allocate budgets, structure
promotions, computer accruals, settle claims, and
account for
• Budget and Promotions offer approvals were via emails
• Offers were maintained in excel with no governance
around changes being done to the offers
• Manual Journal entries during month end to record
liabilities and expenses for trade promotions
• Each region was using a separate balance sheet and
expense account, making reconciliation and
consolidation of promotion expenses a challenge
• At year end Go-To-Market finance users would perform
write backs of liabilities booked against discretionary
funds
• Manual Credit memos were created for settling claims
and were not associated against eligible offers
Solution
Impact
Process
• Established standard template for all offers which also took into
account regional variances
• Performed GL account consolidation for multiple liability and expense
accounts into on global account
• Account reconcilers were also consolidated
Execute
• Corporate guidelines were
established and communicated to ensure
Plan
no direct journal entry into GL
• Responsibility to process claims was also shifted from Accounts
receivables to Go-To-Market finance
• Established a monthly cadence call with sales and finance operations
team to review actuals vs. plan and whether any adjustments are
required prior to month end
Governance
People
• Standardized processes
• Integrated solution provides
comprehensive visibility which is
imperative for successful channel
revenue management.
• Complete traceability and auditability
• Users were able to proactively find
exceptions and react on-time
• Subledger is always in sync with your
GL making reconciliation easier
• Reduced month-end close by 2 days
• Constructed a core group within Go-To-Market finance who would
approve all new offers and claims to ensure adherence to guidelines
Monitor
• ThisAdjust
group would be a single point of contact
for managing all activities
associated with execution
Technology
• Monitor Utilization and Earnings for promotions offers in Trade
Management
• Established two key OBIEE reports that would provide insight into
current liabilities and expenses incurred for both shipped and backlog
order
• Mandated use of Offer adjustment feature to make any mid-term
adjustments
16
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
© 2012 Deloitte Global Services Limited
Handling adjustments to “in-flight” trade promotions
Business Events
• Sales and Marketing
strategy changes
• Promotional
Performance based –
Adjust offers to
distributors or resellers
who are performing
better to give better
benefits
Product Feature
1
2
• Complete traceability on
promotion adjustments
from subledger to GL
4
• Reverse Liabilities and
expenses for
unused/unallocated
marketing development
or CO-OPS
17
Benefits
This presentation should not be interpreted as a representation about or endorsement of any third party products, including Oracle software.
3
• Accurate revenue
forecasting and ASP
(Average Selling Price)
at any given time
• Complete audit trail
• No manual GL
adjustments required
© 2012 Deloitte Global Services Limited
Oracle Applications: Current Release and Roadmap
Release 12.2.4
What’s Next
Future Directions
August 2014
0-12 month planning cycle
Post 12 month planning cycle
Continued OA Framework updates
• Offers create and update OAF UI
• Offer adjustment OAF UI
Channel Rebates & POS Management
• Volume Offer Enhancements including
backdating flows
• Ongoing Endeca Integrations
• Enhanced offer and budget checkbook
• Miscellaneous Offer Enhancements including
• TCA Hierarchy Support
• Line Level Advanced Option
AR Deductions Settlement
• Autopay Settlement by OU
Continued OA Framework updates
• Claims, Budgets, Offers
Channel Rebates & POS Management
• Mobile Support for Offer & Approvals
• Ongoing Endeca Integrations
AR Deductions Settlement
• Deferred Accruals
• Revenue Recognition
• Autopay Settlement by OU
• Mobile Support for Claims & Approvals
Oracle Supplier Ship & Debit
• Manual Approve/Reject for Ship & Debit
Batches
AME Integration for all ChRM products
AR Deductions Settlement
• Ongoing Endeca Integrations
• Provisional Accruals and Reconciliation
Support
Channel Rebates & POS Management
• Completion of Offers in OA
• Cascading Offers/Promotions
• Flow through Offers/Promotions
• Sellers Workbench with OM
• Indirect Sales Error Processing
Oracle Supplier Ship & Debit
• Vertical Industry Support
Oracle Price Protection
• Sell side support
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. |
Restricted to event use only.
18
Questions and
Answers
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. |
19
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