Marketing Roi Calculator Pharma by kdh40920

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									    Mike Baiocchi
     DAZ Systems, Inc.
Implementation and Approach
     Trade Management

 mike.baiocchi@dazsi.com
      (714 360-0215)
        DAZ Systems, Inc.
            www.dazsi.com

Focus on Success Through Expertise and
             Experience
                       Providing rapid, cost effective
                        solutions:
                       Oracle Apps E-Business Suite
                        (ERP, CRM, WMS)
                       Upgrades of E-Business Suite
                       Trade Management
                       Data Warehouse/Data Mart
                       Custom Development (interfaces,
                        integration to disparate systems,
                        web front ends, new software)
                    Agenda
• Overview

• Issues to Solve

• What do we hear? / Case Studies / What we learned!

• Implementation Challenges

• Specific Functions:
                        Budgets
       Trade Planning
       Claims
       Indirect Sales

•Q&A
       Who should be interested?

 Target Characteristics:
    – Co-Operative advertising driven
    – Iterative selling driven
    – In need of claim and deduction management


 These include:
    – CPG
    – High Tech
    – Life Sciences and Pharmaceutical
    – Manufacturing and Distribution
    – ANY Company with a Claim / Deduction Problem
                 Sources: Gartner Group, Cannondale Associates


  OVERVIEW
- INCREASING TFM COST CONTINUES TO BE A CONCERN
 Theestimated cost of trade promotions for US consumer goods
 manufacturers is $26 billion per year, or 13% of sales revenues–
 second only to COGS as leading expense

 61%of a consumer product goods company’s marketing budget is
 spent on trade promotion funneled through retailers

                                                      Marginal Increase in
                                                       Trade Fund Spend


                                                                             Marginal Increase
                                                                                in Revenue




        Trade fund spend is increasing at a faster rate than sales!
            Sources: Gartner Group, Cannondale Associates


ISSUES TO SOLVE
NONPRODUCTIVE SPENDING


   Distributors:

    - 84% do not believe they are getting a fair ROI for their trade
      dollars

    - There is a 50% variance between actual and planned results




                                                      Non Productive Spend


                                         Inefficiency                 Ineffectiveness
ISSUES TO SOLVE

LACK OF CONTROLS




                                                 Competition
–Compliance     Concerns
The historical “looseness” in
contract negotiations between
distributors and retailers
brings the Sarbanes-Oxley act   Inefficiency                   Ineffectiveness
into clear focus

–Increasing   Deductions




                                               Regulatory
Retailers are increasingly
deducting from vendor
payments.
        What do we hear?
Why Marketing Expense Management?
  Compliance Requirements
  Profit Maximization
  Know What Works, How Well it Works, to
 Replicate Success
What do we see/hear from companies?
           Case Study 1
  Distributor of Hair Care Appliances
    –   Revenue: $800M - $1B
    –   Sells to: Major Retailers / Discount Chains
    –   Operation: Global
  Issues
    –   27 (TWENTY SEVEN!) Sets of Books – SOX
        Compliance
    –   Claims / Deductions & Tracking
    –   Billbacks
    –   Returns Allowances
    Distributor of Hair Care Appliances – con’t




 Results:
   –   SOX Compliance
   –   1.2% Initial Decrease in Promo Expense
   –   Increased Customer Satisfaction
   –   Increased Market Share
What do we see/hear from companies?
           Case Study 2
  Distributor of Consumer Electronics Products
     –   Revenue: $800M - $1B
     –   Sells to: Major Retailers / Discount Chains / Office
         Supply Chains / E Commerce
     –   Operation: Global
  Issues
     –   Lack of Central Control Point - SOX Compliance
     –   Sell Through Feedback Loop / Verification
     –   “Over & Above” Promotions
     –   Price Protection - SOX Compliance
Distributor of Consumer Electronics Products – con’t


 Results
   –   Containment of Sales/Marketing “Creativity”
   –   98% Control of Promotion Process (Replaced
       Excel)
   –   Decreased Expense via Sell Through
       Verification
   –   SOX & GAAP Compliance
      What we learned!
The Current Perspective:
   Regulations being seriously enforced
   Shareholders are more demanding
   Competition is fierce
   Days of creative marketing and no
  serious tracking are over!
IMPLEMENTATION CHALLENGES

Transformation vs. Technology– Software doesn‟t solve the problem!
 Software is a tool!

 Process    – lack of standardization in process and trade fund terms drives „ad-hoc‟
 approach and increases complexity to manage

 Technology     – fragmented technology cannot support data and system integration
 requirements

 Organizational     – individuals within your organizations are comfortable with
 traditional approach – no incentive to change

 Cultural   – belief that art, experience, and „gut feel‟ cannot be replaced by tools

 Partner   expectations – increasing retailer leverage and competition drives
 increasing expectation for trade fund support
Oracle Integration Points
Oracle Product     Supported Functionality

Advanced Pricing   • Offers
                   • Price Lists (for Chargeback solution)

Order Management   • Execution of offers
                   • Update of accruals and expenses in Budget
                   • Claim settlement by RMA

General Ledger     • Postings for accruals and/or expenses

Receivables        • Deduction and overpayment claim creation
                   • Claim settlement by credit, debit, write-off, others

Payables           • Claim settlement by check

Costing            • Getting Cost of Good Sold for Offer ROI Calculator

Inventory          • Budget, offer, claim, indirect sales, product use the product definitions

Demand Planning    • Trade Management publishes business events based on sales
                   forecasts created by sales users. Such forecasts can be inputs into the
                   Demand Planning application to impact demand plans.
Oracle Integration Points
Oracle Product            Supported Functionality

Partner Management        • Special Pricing Request (Ship & Debit)
                          • Partner Fund Management
                          • Lead Referral Compensation

Data Quality Management   • POS data management

Tax Engine                • Estimating taxes of transactions generated by claims

WebADI                    • Indirect Sales Data Import

XML Gateway               • EDI 844 and 867 Inbound; EDI 849 Outbound

Marketing                 • Offers can source from marketing campaigns
                          • Marketing uses some limited functionalities of Budget and Offer
                          • Trade Management and Marketing share basic common
                          administrative setups
CRM Foundation            • Territory Management, Task, Note, Attachment, Calendar, Resources

Trading Community         • Customer
Architecture              • Buying Group
Other Integration Points

Third Party Systems           Support provided by Trade Management

Budget Planning Tools         • Budget creation API

Receivable or Payables        • Claim / Deduction creation API
                              • Claim assignment API
                              • Configurable settlement workflow

General Ledger                • Accounting entry interface table

Order Management              • Third party sales import program

Demand Planning, Costing or   • Business events
any other systems
Sales Force Automation
  –Trade  Management is a Sales Application for
  “iterative sales” products
  –Difference between Trade Management &
  Oracle Sales?

“Sales”        Selling       Industry Focus Business Flow
Apps           Model         Examples       Examples
               Iterative     CPG, Life Science /    • Promotion Analysis to Execution
Oracle Trade                                        • Deduction Creation to Settlement
                             Pharma, High Tech
Management                                          • Third Party Accrual
                                                    • POS / Chargeback Processing
               Lead and      High Tech, Financial   • Campaign to Lead
Oracle Sales   Opportunity   Service,               • Lead to Opportunity
               Based         Telecommunications,    • Opportunity to Quote
                             Transportation         • Quote to Order
 Complete Promotion Solution
  Trade Management is a Complete Promotion Solution

Plan
• Set sales quota / target            Execute
• Create budget for                   • Create offer
  customer / product                  • Validate eligibility             Settle
• Set budget thresholds               • Price sales orders               • Create check / credit
• Allocate to sales hierarchy         • Calculate accruals               • Manage claims /
• Create account plan                   and discounts                      deductions


        Plan            Analyze            Execute             Monitor           Settle


                    Analyze                              Monitor
                    • Analyze historical sales           • Capture POS data
                    • Forecast sales volume              • Update checkbooks / General Ledger
                    • Calculate forecast ROI             • Calculate actual ROI
                    • Review prior activities            • Verify field activities
Key Differentiators:
    Integrations – Financials, Supply Chain
    Comprehensive Promotion Types
    Accrual Management and GL Integration
    Flexible and Retroactive Adjustments
    Indirect Sales Management
    Deduction Management
    Lockbox Integration
    Customer 360 View
    Robust Customer Relationship / Buying
     Group Support
                                                             Planning
                                            Tracking

Budget Functions                                       Execution

  Creation
     –   Fixed
     –   Fully accrued with multiple parameters

  Allocation
     –   Top-down allocation along a territory hierarchy
     –   Allocation based on prior year sales
     –   Bottom-up submission

  Validation
     –   Budget-offer validation
                                                           Planning
                                          Tracking

Budget Functions (continued)                         Execution

  Sourcing
     –   Request funds
     –   Transfer funds

  Monitoring Usage
     –   Threshold alerts
     –   Recalculated committed

  Reconciliation
     –   Reconcile committed but not earned
     –   Reconcile earned but not paid
                                                            Planning
                                           Tracking

Budget Functions (continued)                          Execution


  Accruals Management
    –   Integration of all ordering channels
    –   General Ledger integration
    –   Account Generator workflow
    –   Manual adjustments
    –   Retroactive offer adjustments
    –   Spread lump sum offer postings
    –   Scan data offer accruals and adjustments
    –   Volume offer accruals and AP updates
    –   Third party accrual API with AP simulations
                                                     Analysis/
                                   Tracking
                                                     Planning
Trade Planning Functions                      Execution

   • Account Manager Dashboard

   • Creation of offers including lump sum, off
     invoice, accrual, promotional goods, order
     value, terms upgrade, scan data, volume and
     accrual

   • Volume forecasting based on historical sales
     data

   • Manufacturer’s ROI based on forecast volume
     and cost of goods sold, calculate forecast ROI
                                                           Analysis/
                                         Tracking
Trade Planning Functions                                   Planning

(continued)                                         Execution



     Advanced Pricing Integration
        –   All offer information passed directly to
            Advanced Pricing
        –   Uptake of Attribute Manager
        –   Multiple currency price lists

     Integration with All Ordering Channels
        –   Offers automatically or manually applied to
            orders
        –   Both hard and soft promotional limits
                                                        Analysis/
                                      Tracking
Trade Planning Functions                                Planning

(continued)                                      Execution


     Performance Monitoring

     Actual ROI
       –   Based on actual sales data and cost of goods
           sold, calculate actual ROI

     Views
       –   Budget view
       –   Customer view
                                                      Creation/
                                    Settlement
Claim and Deduction                                   Assignment

Functions                                      Research


     Creation
       –   Deductions and overpayments created in
           Oracle Receivables
       –   Claims and debit claims created in Trade
           Management
       –   Mass create claims
       –   API and claims import

     Assignment
       –   Claim territories, teams, and API
                                                     Classification
                                     Settlement
Claim and Deduction
Functions (continued)                         Research



     Task Management
        –   Tasks
        –   Action template defaults based on reasons

     Audit Trails
        –   Source
        –   History based on rules
        –   Attachments and notes
                                                   Classification
                                   Settlement
Claim and Deduction
                                            Research
Functions (continued)

     Discoverer
        –   Customizable
        –   Claim business area provides information on
            all customer transactions

     Associate Earnings
        –   View all customer earnings available for
            claims
        –   Search for customer earnings using multiple
            criteria such as transactions and products
        –   Buying group support
                                                  Classification
                                  Settlement
Claim and Deduction
Functions (continued)                      Research



     Claim Aging View
        –   Configurable aging buckets
        –   Grouped by customer

     Claim Details
        –   Split claims
        –   Related documents
        –   Duplicate claims
        –   Others
                                                       Classification
                                      Settlement
Claim and Deduction
Functions (continued)                          Research


  Oracle Receivables Integration – Auto
   resolution
     –   Deductions from Oracle Receivables are passed
         automatically to TM with owners assigned.
     –   Automatic settlement by credit or debit memo.
  Oracle Payables Integration
     –   Automatically create invoices for check payments
  Order Management Integration
     –   Automatic creation of RMAs
     –   Access to discounts and order history to validate
         claims.
                                                   Classification
                                   Settlement
Claim and Deduction
Functions (continued)                       Research



     Autopay
     Accruals Management
        –   General Ledger integration
        –   Account generator workflow
        –   Scan data offer accrual adjustments

     Configurable Settlement Workflow
        –   Claim settlement workflow allows companies
            to customize their own, easy to maintain,
            functions
                                                        Import
                                   Settlement

Indirect Sales Functions                        Processing



      Import
        –   WebADI
        –   XML Gateway (EDI 844, 867, 849)
        –   Direct SQL load into interface
                                                           Import
                                          Settlement
Indirect Sales Functions
(continued)                                         Processing



      Processing
        –   Basic data completeness check
        –   Mapping of external to internal data
        –   DQM integration
        –   Chargeback validations
        –   Special pricing validations
        –   Dispute reconciliation
        –   Send to 3rd Party Accrual Engine for further
            processing
        –   Send to Inventory Tracking for tracking
                                                     Import
                                     Settlement
Indirect Sales Functions
(continued)                                   Processing



     Mapping of external to internal data:
        –   Price List
        –   End Customer
        –   UOM
        –   Item

     DQM integration
        –   Party
        –   Party Site
        –   Party Contact
                                                      Import
                                      Settlement
Indirect Sales Functions
(continued)                                    Processing



  Chargeback validations
    –   Price List number
    –   Effective dates
    –   End Customer/Buying Group eligibility
    –   Product/Category eligibility
    –   Inventory
    –   WAC
    –   QP Attribute configuration: Seller
                                                 Import
                                 Settlement
Indirect Sales Functions
(continued)                               Processing



  Special Pricing validations
    –   Special Pricing number
    –   Effective dates
    –   Quantity
    –   Price
    –   Product
    –   Customer
                                                      Import
                                      Settlement
Indirect Sales Functions
(continued)                                    Processing



  Dispute reconciliation
    –   Automatic assignment of dispute
        code
    –   Ability to update dispute code on
        screen
    –   Ability to update data disputed and re-
        process
    –   Re-submission of disputed lines
                                                        Import
                                      Settlement
Indirect Sales Functions
(continued)                                      Processing



  3rd Party Accrual:
    –   Indirect sales data can be sent to the
        3rd party accrual engine for
        processing automatically or manually.
    –   3rd party accrual runs a pricing
        simulation and applies all promotions
        eligible on indirect sales data,
        payment can be for distributor or end
        customer. It also finds a price
        difference to be accrued.
                                                      Import
                                      Settlement
Indirect Sales Functions
(continued)                                    Processing



  Inventory Tracking
    –   Distributor inventory is tracked
        automatically based on a System
        Parameters option.
    –   Inventory In = OM data
    –   Inventory Out = TM indirect sales data
    –   Adjustments = made in TM
                                                      Import
                                      Settlement
Indirect Sales Functions
(continued)                                    Processing



  Settlement
    –   Payment by Check or Credit
    –   Using Autopay
    –   Option to deplete upfront accrual or
        create new
    In Summary:
                     Sarbanes - Oxley


G                                                       G
A                                                       A
A                                                       A
P                                                       P

          Sales           Customers         Marketing



                  Good Business Practices

                           Trade Management
Q&A

								
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