Understanding the Customer Business Planning Process

Customer business planning is a capability within the product that allows a key account manager to define their account plan for a future planning period. This enables them to create an account plan to establish a baseline from which to plan. This can be a baseline of volume by product by week, which can be imported and synchronized from a demand planning system or manually uploaded using spreadsheets.

Customer business planning also involves establishing the Key Performance Indicators that the plan needs to track the achievement of volume and revenue targets, uplift volume and targets, and trade rate focus. The customer business plan for each account can also include the setting and allocation of trade investment funds using fund management. Creating an account plan involves establishing the baseline and funding sources available for the plan's achievement. It also involves setting the assortment and product validity dates within the plan, using tools like trackable Key Performance Indicators to understand the plan's progression as promotions are added.

Using inbuilt analytics allows a key account manager to understand how their plan is progressing by looking at volume, revenue, Return on Investment, and the complete Profit and Loss statement across different tracked Key Performance Indicators.

Once the plan is created, the next step is to create the baseline volume, which can be imported and synchronized from a demand planning tool using the Open Application Programming Interface or manually uploaded using a spreadsheet. The baseline volume planning allows downloading a spreadsheet template that respects the products set into the account plan. The account manager can update the spreadsheet with expected volumes and re-import it into SAP Revenue Growth Management to establish the baseline. The baseline can be updated throughout the year by re-downloading and re-uploading the spreadsheet or re-synchronizing with an external source, and it can be amended using baseline building blocks for adjustments based on planned innovation products, store openings, and other demand drivers. In-app editing will also be enabled so users can update volume key figures within the tool at a weekly, monthly, or quarterly level.

Once the baseline volume is established, setting the target Key Performance Indicators for the plan involves someone with sufficient administrator access. These Key Performance Indicators can be set for target volume, target Gross Sales Value, intended trade rate, uplift volume, and other key Key Performance Indicators. Users can choose which Key Performance Indicators persist for them in the user experience to stay aware of their plan's achievement. Key Performance Indicators can also be imported from a top-down financial planning tool like SAP Analytics Cloud Planning, which simulates, approves, and sets targets and budgets.

The Key Performance Indicator for trade spend, if fund management is enabled, will be automatically determined based on fund determination from fund management. If fund management is not enabled, trade spend can be manually set or imported.

A key account manager can amend the product assortment for their account at the chosen level in the customer hierarchy. The assortment area of revenue growth management allows downloading the product assortment and adjusting product validity dates. This helps determine when new products become available for planning or when products are removed from distribution. It's useful for seasonal lines available for specific periods.

Fund management capability within the customer business plan allows tracking and reserving funds for trade promotion activities. Revenue growth management can create funding sources, usually by an administrator or finance user. Funds can be created at different levels of the customer hierarchy and intersections with the product hierarchy. You can create one big fund at a high customer level or get granular with different parts of the hierarchy. Funding for different business areas can come from different sources. Currently, this is a fixed fund amount, and the tool tracks fund consumption.

Fund tracking identifies funds approaching overspend, overspent funds, and promotions reserving funds. You can understand the health of each fund, pre-reserved funds, reserved funds, and available funds. Future updates will track fund usage based on consumption from accruals, but currently, tracking is for fund reservation records.

A key part of customer business planning is enabling the key account manager to understand their account's performance. SAP Revenue Growth Management has embedded analytics for profit and loss statements for individual accounts. Analytics can be rolled up across customer and product hierarchies, with simple selections and filtering to refine down to individual account plans or promotions. Analytic reports show expected product volume over time, baseline and uplift volume, revenue analysis, and product portfolio drivers. Reports can be refined by customer and product hierarchies, with sections for tracked Key Performance Indicators by individual promotions, allowing analysis of promotion performance.

That's a quick summary of customer business planning. Subsequent lessons will delve deeper into each topic and provide demonstrations of each functional capability.

A Key Account Manager, responsible for a specific sales portfolio account and area, performs the following tasks:

• Creates and executes a customer account plan to boost sales volume and profit growth through strategic calendar planning of trade promotion investments.
• Establishes and manages a baseline volume forecast at a product/week level, with periodic adjustments using building blocks.
• Defines product assortment from available SKUs, considering product effective dates and new product introductions.
• Sets, approves, and tracks the use of trade investment funds to meet account objectives and understands available funding.
• Monitors and achieves key KPIs to deliver account volume and revenue targets within the allocated budget.
• Analyzes and understands account volume, revenue, ROI, and P&L across tracked KPIs.

By effectively managing these aspects, the Key Account Manager aims to drive sales growth and increase profitability within their assigned portfolio.

Role Description: Keith is a Key Account Manager at a Consumer Packaged Goods (CPG) company. He develops strategic promotion plans and cultivates relationships with his assigned retailer to achieve financial objectives. His primary responsibilities include:

• Establishing account plans and conducting promotion planning.
• Creating, naming, and allocating products to account plans, while selecting the planning year, customer, and customer hierarchy level.

• Real-time promotion performance tracking and trade plan adjustment capabilities.
• Tools to effectively communicate and justify plans to stakeholders and the field.

• Manual data import, cleaning, and harmonization processes.
• Difficulty analyzing promotion effectiveness due to second order effects.
• Lack of real-time performance data visibility, impeding timely plan adjustments.

• Exceed sales volume and margin targets for both the CPG company and retailer to secure bonuses.
• Strengthen customer relationships.
• Gain confidence in data-driven recommendations to optimize plans.

By addressing these needs, challenges, and goals, Keith aims to enhance his performance as a Key Account Manager and drive success for the CPG company and his assigned retailer.

New account plans are created by: Selecting the products to include in the customers account plan from the product hierarchy

Establish new baseline by either:

• Synchronising the baseline from an external source
• Importing a manually defined baseline from a spreadsheet - using a download template containing the products in the account plan at a week level
• Adapting the baseline with baseline-building blocks
• Amending the baseline with re-uploading or using in-app editing
• Naming the account plan
• Selecting the customer and level in the customer hierarchy
• Selecting the planning year

Set account target KPI's

• A KAM can choose which are the most important KPI's for them to keep visible for plan achievement tracking
• If fund management is enabled, the trade spend KPI will be set automatically by the determination of funds already defined
• KPI's can be set manually by an administrator. Or - they can be imported

Adapting assortment and product validity dates

• Amend product validity dates for the planning period
• Select products to include or remove from the assortment
• Update and amend product validity dates with 'from and to' dates to control when products are available for planning

Create new trackable funds in line with previously simulated and agreed top-down financial planning (which can be done with SAP Analytics Cloud Planning XP&A or other financial planning tools) - which will have defined what budget to allocate for each intersection of customer and product hierarchy

• Create funds
• Select customer hierarchy level
• Select product hierarchy level
• Define fixed fund amount

Track the fund reservation records for each established fund

• Identify funds approaching over-spend
• Identify funds over-spent
• Identify which promotional activites are reserving & plan to consume available funds
• Check the level of pre-reserved and reserved funds and what remains available to reserve for each fund

Use the embedded analytics to understand

• A summary of selected accounts based on selectable customer hierarchy level, time-horizon and individual account plans
• Analyze planned account P&L over-time
• Analyze planned revenue from baseline and uplift & sell-in plan
• Analyze planned ROI and investment
• Analyze planned sell-in volume across the product hierarchy for the selected account(s)
• Export analytics and data into spreadsheets