Program profitability: Trade promotion management vs. ERP systems
The management of long-term discount contracts is integral to determining customer profitability and maintaining strong relationships with retail partners across Ireland. But where should these critical elements be managed? Which platform delivers better results for CPG companies: enterprise resource planning (ERP) systems or specialist trade promotion management (TPM) solutions? Or can responsibilities be effectively split across both platforms? We explore the pros and cons of various scenarios to help businesses determine the ideal platform for understanding total profitability by customer in today's competitive marketplace.
Enterprise resource planning systems
ERP systems are designed to integrate various business processes and data sources, including finance, human resources and procurement, into a single unified system. A number of ERP solutions have components that can manage promotions and discounts, making them attractive options for companies seeking comprehensive business management platforms across the Republic of Ireland.
Advantages
Holistic business view: Provides a more comprehensive view of business operations across multiple departments and functions, essential for companies managing complex operations from Dublin to Cork and beyond.
Financial integration: Enables the ability to correlate promotion spending with other financial metrics, crucial for companies needing to demonstrate ROI to stakeholders and comply with Irish financial reporting requirements.
Data consistency: Less chance of data discrepancies and reporting errors, particularly important for businesses operating across different Irish regions and retail partnerships.
Disadvantages
Limited specialisation: Centrality means ERPs may not have specialised tools for nuanced TPM tasks required by CPG companies managing complex promotional strategies with major retailers like Tesco Ireland, SuperValu, Dunnes Stores, and Lidl.
Reduced customisation: May be less customisable, making it challenging to adapt to changing promotional strategies in the dynamic Irish retail landscape.
User experience limitations: An ERP is typically not as intuitive, user-friendly, or widely accessible as dedicated TPM solutions, potentially impacting adoption across sales teams.
Trade promotion management solutions
Trade promotion management (TPM) solutions are designed specifically for managing trade promotions in the consumer goods industry. They provide tools tailored for the intricacies of promotions, rebates and discounts in the CPG space and overall trade management, making them particularly valuable for companies navigating complex retail relationships.
Advantages
Industry-specific functionality: Because TPM systems are designed with CPG promotions in mind, they can offer advanced analytics, forecasting tools and other features that an ERP may lack, specifically addressing the needs of Irish consumer goods manufacturers.
Strategic flexibility: Enables the flexibility to adapt to evolving and changing trade promotion strategies, essential in the competitive Irish retail environment.
Disadvantages
Data integration challenges: If not integrated properly, TPM solutions can result in segmented data, making it challenging to get a complete picture of the business or retail customer relationships across Irish markets.
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Balancing business needs for Irish market success
When considering total profitability by customer in the Irish market, there is a critical need to integrate data from various sources – sales, promotions, rebates, returns and more. From this standpoint, ERPs have an inherent advantage for Irish companies managing complex, multi-channel operations. If the trade promotion management (TPM) component of an ERP is robust, businesses can easily track profitability by customer without needing to integrate disparate data sources. However, this effectiveness is contingent upon the ERP's TPM capabilities meeting the sophisticated demands of the Irish consumer goods market.
Conversely, the effectiveness of a trade promotion management (TPM) solution in providing a comprehensive view of customer profitability hinges on its integration with other data sources and business systems commonly used by companies.
The ideal solution for companies
In an ideal scenario, businesses would leverage the best of both worlds by implementing a specialised TPM system that is seamlessly integrated with an ERP. This approach would provide:
Deep promotional insights with specialised tools designed for the complexity of Irish retail relationships
Comprehensive business view of overall customer health and profitability
Compliance capabilities to meet Irish financial reporting and regulatory requirements including Competition and Consumer Protection Commission guidelines
Making the right choice for your business
Choosing between an ERP and trade promotion management (TPM) solution for long-term discount contract management and customer profitability is not a black-and-white decision for companies. The choice should be driven by the organisation's specific needs, available resources, and long-term strategic goals in the Irish marketplace.
When to choose trade promotion management (TPM) solutions:
Need for detailed, nuanced understanding of trade promotions and their impact on profitability
Complex promotional strategies with major Irish retailers
Requirement for advanced analytics and forecasting capabilities
Focus on maximising trade promotion ROI
When ERP may suffice:
Broader business view is prioritised over promotional intricacies
Limited promotional complexity
Strong existing ERP infrastructure with adequate TPM capabilities
Resource constraints limiting additional system implementations
Key success factors for Irish implementation:
Regardless of the chosen platform, companies should ensure:
Data consistency across all business functions
Accessibility for relevant team members across the UK and globally
Accuracy in reporting and analytics
Integration capabilities with existing business systems
Scalability to support business growth across Irish and international markets
Transform your trade promotion strategy with solutions designed for the complexity and scale of retail operations across the Ireland.
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Achieve better results with TELUS Trade Promotion Management
