Streamlining the Rebate Process Using Channel Revenue Management to Streamline the Rebate Process for Distribution Companies TRIBUS POINT WHITE PAPER COLLABORATE 12
Using&Channel&Revenue&Management&to&Streamline&the&Rebate&Process& for&distribution&companies&& Abstract(( LearnhowaWholesaleDistributionCompanytooktheirrebateandpromotionprocessesfromacombinationof disparatesystemsandexcelspreadsheetstoafullyintegratedandcostsavingoraclechannelrevenue Managementsolution.Thispaperwilldemonstratehowthetimeandcostintensiveprocessofrebate managementforwholesaledistributioncanbestreamlinedbytheimplementationoforaclechannelrevenue Management.Additionally,thispaperwillcoverhowperformancegoalsandincentivescanbeusedtocontrolthe claimsandsettlementprocess. Business(Background( Asawholesaledistributor,AmericanTireDistributorshas100distributioncentersthroughoutNorthAmerica,and over60thousandcustomers/dealersandservicecentersnationwide.atthetimeofthechannelrevenue Managementimplementation,theywereleveragingOracleEBStomanagetheprocessingof45thousandplus orderlinesdaily.oneofthebiggestcompetitiveadvantagestheyhaveintheirindustryistheirabilitytodeliver exceptionalmarketingprogramstotheircustomers.theyneededachannelrevenuemanagementsolutionthat wouldsupportandmanagethemarketinginitiativesandgaindeeperinsightintotheireffectivenessinthe industry. Legacy(State(of(Promotion(Management(( Type(of(Programs(and(Promotions( Tobetterunderstandthelegacysystemstate,wewillbrieflydiscussthetypesofmarketingprogramsand promotionswemanage. Thevastmajority(90%ofthepromotiontransactionsareknownassystemwidepromotions;wheremultiple dealerscanbeenrolledintheprogramtoreceivebenefits.theseprogramscanbeinternallyfundedthroughthe organization,ortheycanbeexternallyfundedthroughvendorprograms.allinternallyfundedprogramsare tracked,managedandpaidtothecustomerbyus.promotionsthatarefundedbythevariousmanufacturers,can eitherbedirectlypaidtothecustomerbyus,ormanagedandtrackedbyusandreporteduptothemanufacturer sotheycanpaythecustomerdirectly.inadditiontoenrollment,mostofthesepromotionshavecustomer purchasingrequirements,usuallyintheformofunitsoramounts(volumebased,thatmustbemetinorderto receivethebenefits. Theremaining10%ofourpromotionalactivitiesstemfromoneoffrebates.Thesetendtobecustomeror customershiptospecificanddonotrequireenrollment.thesepromotionsarespecificforcustomerswithina regionorcustomersservicedbyaspecificdc. COLLABORATE12 Copyright 2014 Tribus Point Page 1
TheoffersthataremanagedforbothSystemWidepromotionsandoneoffrebatesinclude: StandardAccrual Lumpsum Amount Volume Co[Op Legacy(System( AlthoughOracleEBSwasbeingleveragedtomanagethebackofficeapplicationsandordermanagement, promotionsweremanagedinoneoftwoways.themarketinggroupusedacustomapplicationbuiltonsqlserver tomanagethesystemwideprogramsincludingthevendorsponsoredpromotionsandcorporatepromotions.this serverleveragedsalesinformationfromabicubetoperformcalculationsandaccrualsnightly.informationwas collectedinthesqldatabaseuntilapointintimeinwhichitwasinterfacedovertoarforcreditprocessing. OneoffrebatesfortheDCspecificandRegionalspecificpromotionsweremanagedbytheaccountingdepartment usingacombinationofbireportsandexcelsheetstocalculaterebatedollarsforindividualcustomers/customer locations.manualaccrualswerecalculatedmonthlyandmanagedthroughmanualjournalentriesintothegl.the excelcalculationswerethenconvertedtoaflatfileformatandpassedthroughthemarketingsqlservertobe interfacedtooracle.thegraphbelowdepictstheflowofinformationfromthelegacypromotionmanagement SystemstoOracle. BI Oracle EBS ( ( Summarize Report Spreadsheets Extra ct Calculate Pass SQL Server COLLABORATE12 Copyright 2014 Tribus Point Page 2
Business(Challenges(with(the(Legacy(System( Asseentheimageabove,thelegacyprocessreliedondifferenttechnologiesandmultipleinputs.Thechallenges withmanagingthisprocesswithdisparatesystemsinclude: Multiplesystems[burdensmultipledepartmentsincludingmarketing,accounting,IT,sales,andDC managers Multipleprocessingschedules delaysanddatareconciliationatvariouspointsintimebyvariousgroups createsincongruitieswiththedata StaleData Relyingonothersystemsynchronizationsresultingincalculationsperformedonoutdated Information DelayedReporting delaysinprocessingandfinalapprovalofrebatesprovidingoutdatedinformationto bothinternalandexternalusers Asaresultthebusinesswasleftwithmanyuncertaintiesregardingthelargevolumeofdollarssurroundingtheir tradepromotions.questionssuchaswhogetspaidwhat?aremyrebatesoverlapping?whatsourcedatashouldi beanalyzing?whichofmypromotionsaresuccessful?andeventhemoredisconcertingquestions,aremy customersgettingthecorrectcredits?aretheyreceivingtimelycredits,oraretheynotreceivingthematall? ( Desired(State( Primary(Drivers( Theircontinuingfocusthroughourmarketingprogramsisthreefold. First,toprovidetherealtimeinformationtoourcustomersanddealerssothattheymaymakeinformedbuying decisionssotheycaneasilyanswersuchquestionsaswhatpromotionsamieligiblefor?whatproductsare includedinmyprograms?howcloseamitoachievingmygoals,andwhatdoihavetobuytoreachthem?second, reducethecostpertransactionbystreamliningtherebateprocessthroughautomationandintegration.providea systemthatleveragesdataintheexistingebsenvironmentandreducethetimeofmanagingpromotions,claims andsettlement.andfinally,driveanincreaseinvolumethroughincentivizedprogramsthatworkforallpartiesin thechannelfromthevendor,distributor,dealersandthroughtotheendconsumer. Thebusinessteamrequiredasinglesoftwaresolutionthatwouldprovideaseamlessprocesstomanagetrade promotions.functionalitiesneededincluded: Unifiedsystemforbuilding,executingandmanagingpromotions Abilitytomanagehighvolumesofdataandperformaccurateaccrualcalculations Timelyandaccuratedata Automatedyetflexible Accurateinvoicing/creditingatthecustomeraccountlevel Generateaccountingentriesatthetransactionallevelforaccruals,invoiceandpayments. Analyticstomanageliabilityandtradespend? ( ( COLLABORATE12 Copyright 2014 Tribus Point Page 3
Oracle(System(Solution( Out(of(the(Box(Benefits(from(Oracle(Solution( OracleChannelRevenueManagementsoftwarewasselectedforitsabilitytobuildbothsimpleandcomplex promotionaloffers,itsbudgetmanagementandliabilitytracking,itsadvancedcalculatingengine,andits automatedsettlementprocessandclaimsmanagement.additionally,byintegratingthesolutionwiththecurrent E[businesssuite,wewereabletoleveragecriticalintegrationpointsinEBS(seegraphbelowincluding: AccesstodirectsalesinformationfromOrderManagement IntegrationforautomaticCMcreationthroughAccountsReceivable AccrualandExpenseaccountingwithintegrationwithGL AdvancedeligibilityandqualificationthroughAdvancedPricing ProductInformationthroughInventory Accounts Receivable Channel Revenue Order Management Enter Order Credit Memo Created End Add Line View Adjustment Offer Discount Book Order Budget Utilization Settlement Fetcher Ship Order Auto Claims Settlement Concurrent Job Send to AR Accrual Auto Pay No Yes Auto Claim Creation Manual Claim Creation Manual Claim Settlement Highly(Configurable(and(Extensible( OracleChannelRevenueManagementalsoprovidesveryflexibleconfigurationoptionsthatwewereableto leveragetomanagecomplicatedbusinessrequirementsandprocesses.afewofthehighlightsinclude: PricingQualifiersforidentifyingMarketEligibility:Someoftheexternallyfundedprogramsrequiredavendor definedlistofparticipantsfrequentlyupdated.thislistwasprovidedviaaflatfileandhousedinaseparate schemainebs.thefileincludedshiptolocationaswellasvariablelevelsofparticipation.qualifierswereusedto identifyspecificvaluesfromthisschematodeterminecustomereligibilityacrossvariousprograms COLLABORATE12 Copyright 2014 Tribus Point Page 4
PerformanceMetrics:Mostofthesystemwideprogramsrequiredsomeformofavolumebasedincentive.In manycasesthisincentiveincludedaseriesofcomplexand/orgroupingsofmultipleproductcategoriesorbrands. Forexample,oneoffermayrequirethatthecustomerpurchase75ofXtoachievegoalwhileanotherofferwould requirethatthecustomerpurchase75ofxandycombinedaswell100ofzbeforegoalisachieved. Autopayandautomatedsettlement:Theoffersandautopayenginewereconfiguredinsuchawaythat payments/creditswereautomaticallycreatedfordealerswhoachievedtheperformancerequirementsinthe allottedtimeasdefinedbytheprogram. AccountGenerator:AccountingmeasuredpromotionspendandpromotionperformancetoeachDCandtheir respectiveregions.accountgeneratorprovidedaflexibletooltoderiveaccountingbasedonvariousfactorssuch asbudgettypes,datahouseindff saswellasdefaultwarehouseonthecustomermastershiptolocation. ( Conclusion( Results( OracleChannelRevenueManagementhasprovidedadependableandextensibleplatformtomanageagrowing numberoftradepromotionprocesses.thesolutionhastransformedalegacysystemwithmultipletoolsetsand entrypointsintoastreamlinedandmanageableprocessonaunifiedplatform.benefitsinclude: TighterIntegrationwiththecoreERPdata IncreasedAutomation CentralizedDataRepository TimelyInformation ReducedTouchPoints IncreasedCustomerAwareness COLLABORATE12 Copyright 2014 Tribus Point Page 5