Why Now? – Why First Generation TPM Businesses Are Moving On

Business Processes
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Over the last few years, businesses from across the world have started looking to upgrade from first to second generation TPx. These are organizations who were early TPM adopters, realizing the enormous benefits of managing their trade spend effectively soon after the technology became available. Why the sudden interest in replacing these systems now?

First generation TPM solutions were pre-cloud, on premise, and often implemented as part of wider landscape evolutions across ERP and demand planning technologies with TPM was provided as a ‘bolt on’. Often these solutions were therefore “heavy” and expensive cap-ex investments used mainly by tier-one CPG companies, but a ‘sledgehammer to crack a walnut’ for smaller organizations.

They were also implemented when businesses used to be described as “houses” that “belonged” to a single software vendor. The difficulty of integrating different solutions meant IT directors were loathed to have an agnostic approach to their suppliers: “company X provides my ERP and DP system, therefore we will have their TPM solution.” This is no longer the case.

These first TPM tools were also certainly not designed with end users, and particularly those from commercial teams, in mind. Given the poor user experience, adoption was hard to drive, even during the initial implementations. Now though, with a continued lack of investment, they are so far behind familiar consumer technologies that they are seen as archaic and cumbersome, whilst are almost certainly inaccessible via mobile devices.

Stagnation in terms of the UI, functionality, and, increasingly, performance means that this original generation of tools don’t have the flexibility to deliver the insights CPG businesses now need. As a result, data is often extracted to be dropped into spreadsheets that are more functional and familiar. Over the years, however, these ‘workarounds’ have developed a life of their own. The original simplicity has been lost with +100mb workbooks now not uncommon.

Many of these spreadsheets and workarounds are centered on ‘exception reporting’ and control, in terms of promotional governance and workflows, as none or little of this functionality is available within the solution. This often leads to a mini, self-perpetuating industry of review and approval, all crucially ‘offline’, away from the very tool meant to be managing trade spend.

The businesses have, it would appear, decided the time is now right, usually because of increasing annual licensing costs or the end of “support”, to replace their first generation technology. Whereas once this would have been a leap of faith, now it is a pragmatic approach. Advances in integration technologies means these modern solutions can now fit seamlessly into an existing landscape, while via a SaaS model, 2nd generation TPM offers so much more flexibility and functionality. All with a UI not designed before the turn of the millennium.

Ed Bishop
Senior Client Consultant
LinkedIn