Why Excel doesn't excel at trade promotion Management.
Ever since Microsoft Excel replaced Lotus Notes 1-2-3 as the leading spreadsheet, CPG companies have been using Excel to manage trade. Over the past 25 years, forward-thinking CPG manufacturers have been replacing the spreadsheet with TPM solutions.
How did Excel become so popular for trade promotion management?
Excel is low cost and customizable. It's easy to set up a spreadsheet template of all the rows and columns you'd like to manage your promotions. If you're a small CPG manufacturer or distributor, you're probably using Excel in some way to manage your trade promotions.
What's not to like about using Excel for TPM?
Unfortunately, many things. First is the challenge to have one, up-to-date view of each promotion. Easy to say, difficult to do with Excel. Promotions can be revised many times. All the stakeholders are geographically dispersed and work for different companies. (Manufacturer, Distributor, Retailer, Broker) Synchronizing and combining changes from all those spreadsheets is a huge challenge!
Second, entering all of the financial transactions to keep the planned event up-to-date is difficult. Everyday there are sales (or purchases) which must be entered to calculate accruals, incurred liability, and forecast spending. In addition, deductions and check requests must be entered into the spreadsheet. One person can update the spreadsheet for a few products and small account. It's impossible when the scope grows to many customers and many products.
Third, there is Sarbanes Oxley. I know, you're just a small private company and this regulation only applies to public companies. However, if you ever strive to be purchased by a public company or go public, you'll need to get trade promotions out of Excel. Section 404 clearly states that anything that materially can impact your financials can't be managed in spreadsheets.
So, what's a CPG company to do?
Seek out TPM solution providers to learn how true closed-loop trade promotion management software can address these issue, and help generate increased promotional efficiency and effectiveness that can off-set the cost.
If you use NetSuite as your ERP, include i-TPM in your vendor review!