Not once. Not twice. But a dozen times, I’ve watched customers come to a horrible realization about their trade spending.
Once they understand where they are spending money and find where all the bodies are buried—they get the real numbers for everyone to see. All too often, the cold hard facts prove that the company is paying its customers to buy its products. This visibility and realization usually triggers a change in process required for the company to reign in its unbridled Trade Promotion Management (TPM) spending. Along the way, many of them turn to a software tool to help with the centralization and reconciliation of the data.
However, no matter how good a tool is, it’s not going to fix a company’s spending problem without some real assessments of the culture and behaviors that got you there. The organization has to realize the problems or issues it is having are a direct result of the very lack of control that can’t be fixed by a tool or application. In fact, part of the challenge companies have in creating 100 percent visibility to spending is that they have to dig under rocks that a lot of people don’t want to lift.
The bottom line is: there is so much more to reigning in spending than just getting a new tool.
Without doing the work upfront and implementing change management, purchasing a software system just means that a company is taking bad processes and making them more expensive bad processes. Part of what ArchPoint does best is ‘peeling the onion’—and peeling the TPM onion of spending is what it takes to address the issue. Someone has to know where to look and what questions to ask to find the right solutions.
It’s little comfort knowing that inefficient TPM behavior isn’t unique to the CPG industry. It’s everywhere. Plenty of industries are ready and willing to take advantage of the lack of discipline in these companies that operate their sales arm like the Wild, Wild West. If an organization doesn’t go through the change management of how effective processes and systems get executed, then sales people will figure out a way to make up their own rules.
No one operating in an undisciplined culture should expect software to fix the issue. If an organization has 100 percent visibility to their spending, then they don’t have a need for a TPM tool. The behavior of spending too much money with little to no visibility gets you to the place to use a TPM tool. But once the organization has reached this place, if you don’t change the behavior, it doesn’t matter what tool you use.
And taking that a step further, even if you uncover all the bodies and expose the true spending, if the organization’s leadership doesn’t make the new systems and processes important, then they aren’t going to work and you will not get long-term positive results.
To summarize, if you don’t address the behaviors behind the spending, even the best tool will fail to deliver the positive impact you want on the business. There is no “just add water” solution. To succeed and correct the problem, the work has to get done.
Jesse Edelman is the COO of ArchPoint LLC. To learn more visit, www.archpointconsulting.com.