This topic covers all the things SAP does to assist sales processes, from top-level commercial planning and pricing strategy through demand planning, baseline forecasting, customer account planning, trade promotion planning, and execution with the ERP. This includes optimization execution in other channels, financial settlement, and wrapping it all with analytics.
SAP Revenue Growth Management focuses on producing customer and account plans, allowing key account managers to plan promotions quickly and efficiently. Let's focus on these areas: customer and account planning needs to occur at different parts of the customer hierarchy, sourced from the customer master data in the ERP system. It requires budget allocation and sales targets so key account managers know their objectives. A promotional calendar is essential to display promotional events over time, whether tactical promotions or long-term pricing agreements. As mentioned in previous lessons, setting an everyday low price as a form of temporary price reduction, alongside tactical volume-driving promotions for seasonal lines or specific products, is crucial.
The core of all this is trade promotion planning, which involves rapidly creating long and short-term pricing promotions and easily reusing promotions from other plans or previous years. It accommodates all financial elements within the plan. A trade promotion must include execution dates, product identification, promotional discounts, and other financial terms. It may involve lump sum funds for features or displays and additional rebates per case. These elements must be quickly integrated into the trade promotion, which also records anticipated volume uplift to identify the Return on Investment benefits of the promotion. Based on the investment in the discount, SAP aims to achieve additional revenue and profit from the promotion, executing with the ERP in real-time.
Once a trade promotion is approved, it writes pricing conditions into the ERP, ensuring sales orders are correctly priced down to the stock-keeping unit (SKU) level, even if the promotion is created at a higher category level. Financials must execute at the SKU level for accuracy, aligning actuals when they return to the system. Real-time ERP integration powers key performance indicator (KPI) tracking and provides data for gross-to-net P&L understanding in customer account plans, tracking trade fund consumption and sales target achievement. Trade promotions lead to sales with rebate elements, settled by the accounts receivable team handling invoice claims, dispute claims, or retailer rebate requests. This process is managed in SAP S/4HANA’s accounts receivables.
Analytics wrap all these processes, whether through SAP Analytics Cloud or third-party analytics, making data accessible for SAP companies to report weekly, monthly, or quarterly. Insights and analysis help understand product sales, planned versus actual volumes, and the most profitable product portfolio parts. SAP Revenue Growth Management includes embedded analytics for P&L insight, exposing data for customers using alternative analytics platforms. Recognizing a non-homogeneous world, SAP accommodates data extraction for reporting and integration into other systems, creating an ecosystem of cooperating solutions.
Next, we'll explore the key features of SAP Revenue Growth Management and its benefits in the next lesson. Before that, we'll briefly examine the wider SAP portfolio components needed for holistic enterprise planning. Commercial planning and sales target setting are available as free content in SAP Analytics Cloud Planning. SAP Integrated Business Planning (IBP) covers demand planning and supply chain, with partner solutions for holistic plan optimization, forecasting, AI recommendations, and insights on pricing strategy, elasticities, and competitive analysis. Partners like Enterra and Decision Point contribute to this.
The wider Customer Experience portfolio includes SAP Direct Distribution for van sales and mature capabilities with SAP Commerce Cloud for Business-to-Business (B2B) and SAP Direct-to-Consumer commerce. The evolution towards channel-less commerce and order management supports retail execution and dynamic visit planning with Sales Cloud, downstream from trade promotions and revenue growth management activities. Sales teams visit stores to check planogram compliance, shelf facings, out-of-stocks, and promotional terms agreed in SAP Revenue Growth Management, leveraging upcoming promotions for increased product sales.
These processes must work seamlessly, from commercial planning and demand planning through sales planning and customer account planning to market execution. SAP is uniquely positioned to integrate these elements with a consistent digital core and product strategy spanning the entire ecosystem.
The figure shows various modules and capabilities within the SAP Cloud ERP Digital Core system that support revenue growth management.
The central component is the SAP Cloud ERP Digital Core. Surrounding it are several modules and capabilities:
- Pre-Event Analytics
- Enterprise planning, RGM Insights and AI – market insights, competitor actions, post event performance, pro-active AI alerts and recommendations.
- Commercial planning – AOP top-down planning, budget planning (trade spend and marketing), sales-target planning, list-price planning, net-revenue consensus.
- Post-Event Analytics
- Trade claim settlement – settling the financial liabilities against accrual balances.
- Retail execution and dynamic visit planning – store visits and surveys, out-of-stock check, promotion compliance checking, upselling.
- E-commerce – B2B and DTC – execution in e-commerce routes to market and marketplaces and omni-channel promotions.
- Direct Distribution – distribution, routes and last mile delivery, store visits and sales, van sales, retail execution.
- Promotion execution and real-time ERP Integration – plan actuals and KPI tracking, real-time execution of pricing conditions, management of funding and budget and ratios integration to SAP Cloud ERP.
- Holistic plan optimization and recommendations – recommendations from simulating realistically constrained promotion scenarios, recommendations of permutations of promotion details to drive revenue growth.
- Strategy and Planning
- Pricing strategy – list price, competitor price elasticities, assortment and price pack architecture.
- Demand planning and supply chain – volume forecasting by region and account and alignment with production capacity and uplift feedback from promotion planning.
- Baseline Forecasting – manual, shipment, or consumption model for base and uplift volumes forecasts, manual adjustments.
- Customer/Account Planning – whole account P&L, scenario planning, fund management, KPI tracking, promotion calendar.
- Trade promotion planning – long- and short-term promotions, HQ promotions, tactics and spend types, multi-level promotions, direct and indirect promotions.
Promotions can be planned and executed with the following parts of SAP Revenue Growth Management:
- Customer/Account Planning
- Whole account P&L , scenario planning, fund management, KPI tracking, promotion calendar.
- Trade Promotion Planning
- Long- and short-term promotions, HQ promotions, tactics and spend types, multi-level promotions, direct and indirect promotions.
- Trade Claim Settlement
- Settling the financial liabilities against accrual balances.
- Pre-Event Analytics
- Post-Event Analytics
Promotions can be planned and executed with the following parts of SAP IBP and SAP Analytics Cloud Planning:
- Commercial Planning
- AOP top-down planning, budget planning (trade spend and marketing), sales-target planning, list-price planning, net-revenue consensus.
- Demand Planning and Supply Chain
- Volume forecasting by region and account and alignment with production capacity and uplift feedback from promotion planning.
Promotions can be planned and executed with the following parts from SAP Revenue Growth Management partners:
- Enterprise Planning, RGM Insights and AI
- Market insights, competitor actions, post event performance, pro-active AI alerts and recommendations.
- Pricing Strategy
- List price, competitor price, elasticities, assortment and price pack architecture.
- Baseline Forecasting
- Manual, shipment, or consumption model for base and uplift volume forecasts, manual adjustments.
- Holistic Plan Optimization and Recommendations
- Recommendations from simulating realistically constrained alternative permutations of promotion details to drive revenue growth.
- Pre-Event Analytics
- Post-Event Analytics
Promotions can be planned and executed with the following parts from:
- Retail Execution and Dynamic Visit Planning
- Store visits and surveys, out-of-stock check, promotion compliance checking, upselling.
- E-commerce – B2B and DTC
- Execution in e-commerce routes to market and marketplaces and omni-channel promotions.
- Direct Distribution
- Distribution, routes and last mile delivery, store visits and sales, van sales, retail execution.
This is an overview of the software you can use to plan and execute trade promotions.