TPO applications need to respect the 800 pound gorilla in CPG Industry’s IT landscape
The dominance of SAP as the primary ERP system in CPG companies’ IT landscape, is a well established fact. Any look at the leading players shows that more than 90% of the CPG companies use SAP as the primary transaction processing system. What does this mean for any TPM/TPO system?
The simple answer to this question is that SAP is like the 800 pound gorilla in the CPG organizations’ IT landscape, and any animal wanting to live in harmony and play its role in local eco system, needs to respect it. Thus, for any TPM/TPO system to be effective in CPG organization, it should be able to integrate flawlessly with SAP and also align to a good extent with the data/process definitions as dictated by SAP. The integration should be full cycle and not just one-way data transfer kind of integration. The integration needs to start from having synchronized master data so that the TPO system plans the promotions for a supply/demand chain set-up, which exists in the SAP system. Plus it needs to use the historical promotion/sales data which is real and correct. Once the planning is done, the output of the TPO needs to be transferred to SAP for it to reflect in the relevant sales process (Pricing, Material Determination…) with the correct effective date and for the correct duration. To close the cycle, the integration should also cover the mid and post promotion analysis for which it needs to have real time integration with the SAP system and/or the data warehouse (most likely SAP-BW).
Thus for any TPO solution to be effective and successful in a CPG industry, one of the biggest consideration should be its ‘out-of-box’ ‘certified by SAP’ integration with SAP. The out-of-box integration should not be a teaser, but a real integration covering all the facets described above. Should enable automated creation of promotions in CRM system and should lead to creation of pricing records etc in the ECC system. Certification is important for any customer to be comfortable about the ability of the TPO solution to work in an SAP centric landscape. If both these aspects are covered, it will provide a winning value proposition, of-course in addition to sound TPM/TPO capabilities to begin with.
