When it comes to modernizing business practices, technology in general and software in particular is essential for business growth. How are manufacturers and suppliers who deal with millions of dollars’ worth of customer rebates each month adapting to the challenges faced by a historic lack of suitable software? Andy James, Chief Product Officer at Enable, shared a few stories about how their clients have changed for the better and what drove their decisions.
Essentially, for two of our largest customers, the decision to move to rebate management software came down to a combination of people and technology, primarily for these two reasons: avoiding reliance on a handful of people and centralizing business processes to avoid confusion.
Case study 1: avoiding reliance on four (very capable) people and their laptops
One of our customers is an enormous buying group turning over close to half a billion dollars every year with multiple divisions in multiple countries. Their divisional teams set up rebate programs on behalf of their members and a central financial operations team administers the programs on behalf of all divisions, which means they are responsible for working out the rebates due from all these different agreements on behalf of all these different members and paying it out.
That’s fiendishly complicated.
They have thousands of members, more than 800 suppliers, and multi-country, multi-currency interaction going on all at the same time. The stakes are very high. Understandably, every member wants to make sure they’re getting the money they are due from each of the multiple deals they have in place.
A brief look at the numbers: how they got to approximately 2 million deals
- 800 suppliers
- x5 deals (average) within each supplier programme
- x500 members benefiting from each of those deals
- Each individual calculation must be absolutely right
That is approximately 2 million deals that can’t be messed up! The complexity in all these deals is also fiendishly complicated. As members leave or join, things change, and rules exist around whether deals are based on growth over last year, for example. Then there’s the multi-currency aspect and the challenge of dealing with international payments: all of which requires an in-depth, specialist knowledge and very good tracking.
Tracking 2 million deals with 4 (marketable) people and a bunch of spreadsheets
The financial operations team was doing a great job using Excel – but the pressure was on them to get it all right, all the time. And to ensure accuracy, they regularly had to collect information from their suppliers to get these calculations right in order to ensure their customers were meeting the requirements of the deals they had signed up to.
While the team was brilliant at it, the complexity was almost unbearable – and certainly unsustainable. Now imagine if one or, worse, two of them resigned in frustration!
The organization realized that they had critical customer relationships and the power to reward or ignore customers (not to mention the insight into the movement of millions of dollars’ worth of rebate) in the hands of four incredibly marketable, capable people. The chances of them moving on to other jobs were high.
Our customer decided, something had to change
Our customer realized that they needed to be leveraging the skills of these people in a much more analytical, strategic way, to leverage their knowledge and ensure they were able to progress in meaningful careers. They also realized that they needed to systematize their rebate processing so it was possible for these people to move on, if they chose to do so, without the company losing everything – the background knowledge and the day-to-day ability to manage their members’ rebates.
They decided they needed a robust, system-based approach to enable their team to do more with their knowledge and simultaneously systematize their processes so that they were future-proof.
Case study 2: centralizing tools and skill sets to cope with business acquisition
Another one of our customers had acquired many businesses over the last few years and had become a substantial group of companies. Part of their strategy was to scale and leverage this growth, but they had a disparity of tools and skillsets across the business. They needed to centralize abilities in a single team.
Today’s employees expect advanced tools: not just spreadsheets
They had very talented people working for them who are used to modern business practices. They expected tools to be available to them to help them do business in a modern world. Unfortunately, while their complicated, challenging rebate process was scaling up because of their need to centralize and leverage the group scale, their team was relying on old technology that only partially supported the process. They were asking the team to make up all the gaps in Excel.
This kind of world is not the place that will inspire a team to take the challenge of managing group-wide supplier rebates which is why they decided that having a great rebate management team and having suitable tools to future-proof them and make them inspired by their work was both a real, and present need.
They chose Enable’s cloud-based supplier rebate management tools since SaaS is the best way to serve the high-expectation of quality people with graduate degrees working in today’s businesses. They realized that not only would this type of software help improve their employees’ efficiency, it was also part of their approach towards improving customer satisfaction, while ensuring the accuracy of rebates across the board.
What is the vertical integration of customers and suppliers?
In the old world, suppliers had the upper hand over their customers: they could make the rules and control the purse strings. Then, later customers started to duck-and-dive to find better choices. Finally, the customer became king. Now, we’ve gone beyond that. The vertical integration of customers and suppliers, as well as the vertical integration of sectors is about suppliers and their customers (usually distributors) being so joined that they are actually working together to achieve the common goal of growing both their businesses, typically using a joint business plan.
The new world of rebates
The new world of rebates is about allowing manufacturers to achieve vertical integration with their customers. It’s also about ensuring highly skilled people with high expectations about what software can do are inspired by the tools they are using. And, finally, it’s about ensuring that knowledge doesn’t just live in the heads of a few precious (but marketable) individuals or, worse, risky or clunky spreadsheets which are so dangerous for rebate accounting.
It is this key-person dependency, systemization of process and customer service offering that is driving the decision for manufacturers and suppliers to move to rebate management software.
Join the revolution! Request a demo of Enable’s rebate management software.