As a leading provider of trade promotion management (TPM) solutions, we understand what facilitates a smooth implementation—and what doesn’t. From our experience, we’ve identified five pitfalls that can keep consumer packaged goods companies from achieving their desired return on their TPM investments.
The RFP Hangover.
We’ve seen this happen over and over. An organization assigns a team to develop its requirements for a TPM request for proposal (RFP). That team does so, issues the RFP, evaluates the vendors’ proposals, sits through TPM software demonstrations, chooses its vendor—and then walks away. That’s a problem. Vetting and selecting a TPM partner is only half the battle. The development team needs to stay engaged to make sure that the selected partner is, in fact, the best partner for implementing a TPM strategy or application. And they need to work with the implementation team to ensure that the actual intent of the TPM program—to improve efficiencies and effectiveness of trade spending—is being realized. TPM implementation is a long journey; organizations considering partnering with a TPM vendor need to understand that from the start.
Sometimes, TPM software vendors do “too good” a job promoting their solutions. In those cases, buyers can become enamored by the software, the snazzy features and the promises of ROI—and completely forget about the people who will use the system and the processes that the system is meant to support. The truth is that software—no matter how alluring—can only do so much. The skills of the organization’s people and the maturity of its processes are the other two legs of the TPM stool.
The bottom line is this: If your people are doing the wrong things, a TPM’s functionality will simply let them continue doing the wrong things efficiently. And if your processes are not doing what you need them to do, TPM applications will simply help you be more efficient at being ineffective.
We’ve heard this one a number of times: “The software looks great! So, why do I need to care about the culture of the vendor we will be partnering with?” The answer is, if your organization’s culture, values and management style is at odds with the culture, values and management style of your TPM vendor, the implementation will almost always cost you more and take much longer than you anticipated.
How will you know if your cultures are incompatible? Be aware of warning signs. If the vendor has no business people working with you to understand your processes and people, run. If correspondence and responses to specific questions are sporadic, run faster. If training or coaching of your people is an afterthought, or if the vendor’s implementation team is not revealed until after the contract is signed, run farther. Vet your vendors thoroughly. And don’t take the concept of “partnership” lightly.
It’s Someone Else’s Problem Now.
In many cases, it’s the sales and marketing teams that are involved in selecting their TPM vendors. Once the choice is made, those teams call in the IT folks to take over the implementation. That’s a mistake. TPM application installations are rarely turnkey projects. And while your IT organization might be highly capable, members of the IT staff typically can’t answer the business-related questions that need to be answered during installation. Someone has to be in charge of answering the business questions that will inevitably arise about sales processes and workflows, finance practices, marketing imperatives, etc. Every discipline needs to be involved to help ensure the application performs as intended.
What Are We Trying To Do Again?
Often, consumer packaged goods companies believe that success criteria are built into the TPM application. They are not. What are built in are metrics. It is critical for organizations to define their own criteria for success. Only then can metrics from the TPM application be aligned. We’ve seen organizations institute a range of success measures—from general ROI to cost-per-incremental case. These become the key performance indicators. Even if benchmarks for measures like ROI are not available, trend data can show that you are moving in the right direction. Benchmarks, if already established, need to be circulated to every person within the organization that touches the TPM application. And key metrics and measures, along with the communication of event success, should be reported on a quarterly basis, at a minimum. Remember why you wanted TPM in the first place, and keep your eye on the prize!
By avoiding the pitfalls, you’ll be in a much better position to avoid TPM failure. So, know what you’re getting into, be prepared for the long journey, and make sure your people, processes and success measures are ready for the changes that a TPM solution will afford you. Only then will you have a TPM solution that’s truly working to your advantage.
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