Support sales promotion: Henkel develops SAP-based sales cloud

Support sales promotion: Henkel develops SAP-based sales cloud

 

The consumer goods group Henkel is reorganizing its dealer discounts and rebates using a new sales app. […]

A “tree with trillions of possible combinations” – this is how the consumer goods group Henkel describes its sales promotion campaigns for retailers. They work like a frequent flyer program: the retailer purchases Henkel products and collects points (“accruals”) in the sales process based on local, seasonal or other sales promotions. Henkel will reimburse them for the final settlement.

The amount of the refund depends on the one hand on the hierarchy level of the trading partner – does he act nationwide or regionally – and on the other hand on the hierarchy level of the products. It is all about factors such as category, container and fragrance note. This interaction creates the complexity of the so-called “line 6”. This is the internal designation of all discounts and discounts.

Against this background, Sascha Wirtz, CVP Consumer, Customer &Markets at the digital hub Henkel dx since 2020, set himself an ambitious goal: He wants to be able to control line 6 in a data-driven manner in accordance with Henkel’s overarching growth strategy. “We see the ability as the key to our competitiveness,” says the manager. He brought representatives of the business units to a table and initiated a complete restart. Wirtz wanted to develop a platform-based tool that “one hundred percent” meets Henkel’s needs.

For cost reasons, the new solution should integrate existing calculation routines and other elements. For Wirtz, only the cloud was an option because of the large amount of data. It was also clear that the trade promotion management processes at Henkel are strongly interlinked with the SAP core system ECC 6.0 via numerous interfaces. This spoke for the SAP Business Technology Platform (SAP BTP) as a basis. These considerations condensed into SPARC, the abbreviation stands for Sales Promotions and Revenue Cloud.

Henkel implemented the first pilot within eight months. In May 2021, the solution went live in the German locations. The consumer goods group brought the management and technology consultancy BearingPoint on board as its main partner. Accenture, CapGemini and SAP Consulting also provided partial support. Leonardo Lopez, Program Manager &Head of dx TPM (Trade Promotion Management), says in retrospect: “The high speed was a huge challenge. Especially when you consider that I started the project practically alone and we first had to build a team with SAP BTP know-how.“ Together with BearingPoint, he put together a team within a few days and set up the project.

Lopez’s goal is to implement all business requirements with SPARC and to be able to reliably track all Line 6 cash flows. Once this has been achieved, the program manager wants to optimize the promotion measures: “Then we can check which sales promotion measures were most successful in which period and not only adjust our promotion strategy, but also plan and align it strategically,” he says and adds: “Then analytics and big data tools for valuable insights will also be fully used.“

Henkel SPARC is now rolling out worldwide in its three business divisions Adhesive Technologies, Beauty Care, Laundry & Home Care. At the top of the list are Iberica &Benelux, followed by North America, Australia and New Zealand, Poland, Austria, Italy, France and the UK. “Our goal is to cover 70 percent of the Line 6 processes worldwide in the next step,” explains Lopez. This means high demands on scalability: “Instead of two to three thousand promotions per year in the Beauty Care Germany area, up to 200,000 promotions will have to be managed worldwide in the future.“ In addition, there are regionally different processes, such as varying VAT rules within the same country.

From a technical point of view, the self-developed solution combines complex structures and authorization concepts from SAP ERP with a new intuitive user interface. It uses ready-made integrations and interfaces to the SAP world as well as modern, collaborative development tools based on the in-memory database SAP HANA. The underlying platform also provides central governance and security. Wirtz and Lopez talk about an innovative and value-adding sales app: Accruals calculations are now available in seconds, according to the managers. Because the process no longer runs in the ERP system, but in the cloud.

In addition, there is a higher satisfaction of the partners in the trade: If traders want to invoice their accruals, this could mean several minutes of waiting time per click before the project. With the new solution, receivables can be called up and settled in real time. Henkel also recorded significantly lower price differences between promotion planning and billing. Lopez attributes this to the robustness of the new interfaces. Any price change is immediately and reliably visible in the SPARC system.

Lopez cites two success factors for the success of SPARC: first, Henkel opted for an agile approach (“Macintosh approach”). The team members devote themselves to the project full-time and with full focus in order to present a first prototype within a few weeks. After that, expand the tool with a new application version every two weeks.

Henkel-CDIO Michael Nilles (Chief Digital and Information Officer) introduced this procedure. Secondly, the team is organized according to the BizDevOps principle. The combination of business, development and operations is intended to ensure that IT and business know-how are equally incorporated into the project and that the team members work together on an equal footing.

Wirtz and Lopez see no alternative to in-house development. Over the past fifteen years, your company has tried out a wide variety of solutions that were available on the market. The problem: these standard tools could not map Henkel’s complex processes. According to Wirtz, SPARC, on the other hand, is now a fundamental transformation that brings about a paradigm shift: “We are talking about a BizDevOps organization in which we pool our strengths on the part of IT, digital and business.“

*Christiane Pütter is a journalist from Munich. She writes about IT, business and science. In addition to CIO and Computerwoche, her clients include several corporate publishing magazines, especially in the field of banking/insurance.

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