Is She Right?

Last week, I had a fight with a lovely lady. It was downtown Montreal. The dinner was beautiful, and I was tempted to just nod my head and agree. However, I was feeling a bit cantankerous (too much travel). So, I took on the group and pushed an unpopular view.

It started as a simple statement by Sylvie Leduc, Molson Coors at the end of the CAS Customer Advisory Board (CAB). The discussion started as a dialog. The topic was trade promotion management. The group was lamenting—over a beer—about the lack of industry definitions and standards. This gap drives project delays and failures. The industry is littered with failed TPM projects.

Let's face it. Customer relationship management (CRM) does not meet the consumer product industry's needs very well. There is a need for very industry-specific functionality for trade promotion management (TPM) that does not exist. The group felt that the lack of standards delayed projects, causing many teams to fail. She felt strongly that if the group at dinner—Campbell Soup, Coca-Cola, GSK, Nestle, RJR, and Sony—ganged together that they could change the industry. She felt that the group could develop best practices, drive industry adoption and reduce project failure.  

I love Sylvie's spunk, leadership and drive. She has driven change in Molson's processes, resulting in a step change of 70% productivity in her front office processes. She is justifiably proud. The industry needs more people like Sylvie. However, I had to tell her that I think that while she is well intended, that I think that she was wrong.

So, why would I take on a client over beer? (Especially a sales leader of Molson over a Molson beer?)  The reason was simple. I did not want a group of talented individuals to waste their time. 

In my seven years as an analyst, I have become a bit jaded. I have watched many initiatives for the industry come and go. The names litter many presentations—ECR, EPC, CPFR, GDSN, GUSI, Price Synchronization, and New Ways of Working Together—but the standards groups struggle with adoption. Even some of the representatives that have worked the hardest on the standards committees struggle with driving adoption—even within their own company.    

Let's face it. The industry is not good at developing and using standards. Or, providing the leadership to support the development of industry-specific software. This is a common complaint by software providers serving the consumer products software industry.  

In TPM, the industry has put the cart before the horse. Whereas, software usually grows from and institutionalizes best practices; but, there are no best practices for TPM. Instead, the software is solution looking to build best practices. It is made worse by the fact that SAP, Oracle and CAS are taking the TPM market in three different directions. None of the software leaders are working with each other on industry standards and none have driven leadership to build an ecosystem to better serve the industry. 

The industry groups are also not in sync. Grocery Manufacturers Association (GMA) is on the periphery. TPMA has just been reorganized, and Consumer Goods Technology (CGT) has a share group (the group is good at sharing, but is not driving new standards). None of the three groups are actively pushing for process standards.

I had to share with Sylvie, that while well intended that starting this initiative was a bit like pushing water up hill.

...a bridge too far in an industry that is not ready to change. 

What do you think? Is Sylvie right? Could the group change the industry?

Comments

[Steve Daugherty]

Correct me if I'm wrong, but I think the key problem is the number of participants involved. Not only are they trying to get multiple manufacturers with multiple retailers involved, TPM has specific additional challenges because of the ways it is managed and negotiated internal to these companies. Sales, Marketing, Finance, SCM can all have stakes and likely have difficulty building internal let-alone external cohesion. As you know, I disagree with you on CPFR - but that is because the experience I have is with relatively few SKUS's & industry players. TPM will require similar small-scale work first where strategic partners first agree at the top to work out the issues and drive the systems & processes to specific, definable benefits.

[Tyler G.]

Recent increases in economic pressures have highlighted the importance of finding new criteria and standards for evaluating payables. Sylvie is feeling appropriately frustrated in her daily responsibilities due to the lack of protocols. While her timing and desire to create standards is on target, past industry practice suggests that standards created through or by a third party or professional society are typically more widely accepted than those created solely by industry heavyweights. While Sylvie had an impressive array of dinner table companions, the table may have lacked the diversity and prowess to create comprehensive and durable standards for the entire industry. I agree with Lora- Sylvie has a near-Herculean task. Although the industry groups mentioned in the last paragraph aren’t actively pushing for process standards, they will play a large role in generating sustainable TPM guidelines by coercing strategic conversation and advancement across the industry. My opinion is that Sylvie’s particular group could not change the industry, there needs to be a stronger and more diverse driving team for lateral recognition of industry best practices.