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06 January 15

Five things to consider before implementing SAP Trade Claims Management

By Author: Jamie Brown

3 min read

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I’ve spent the past year involved in the design and global rollout of a SAP Trade Claims Management system, and would like to share some thoughts on important considerations to make before making such a journey.

SAP Trade Claims Management (TCM) is often the next step to building upon an existing Trade Promotions Management (TPM) system. Knowing which promotions that claims from customers apply to is important for analysing which promotions work well, and knowing which investments (whether short term promotions or long term trade agreements) are most effective.

Know the existing SAP TPM solution

When deciding to implement SAP TCM, don’t underestimate the impact of building it on an existing SAP TPM system. Besides anything bespoke existing within TPM, there are multiple (and often subtle) dependencies that need to be taken into account, due to the deep integration of TCM with other processes in your SAP solution landscape.

Therefore, ensure you are comfortable with how every TCM process will impact everything else – for example the impact of settlement on trade funds. Depending what trade funds are used for, you may want to switch off the standard posting of settled amounts of claims to your fund since this impacts the accrual figures which may already be used in TPM processes.

Don’t assume standard will cover everything

Every business is different, and every SAP solution is different. Although SAP TCM offers various standard processes as part of the wider TCM offering, don’t assume they will do exactly what you want them to do.

For example, if a claim which has been paid out needs to be reversed, have you determined which type of user would be required to process cancellations when using the SAP standard process? Being a multi-system solution, there may be different points in the solution where a particular process may start and end, all depending if you’re using SAP standard, or a bespoke process. Ensure that all the important processes are covered, including claim corrections, cancellations, approval processes and segregations of duties, chargebacks (excessive customer deductions) and invoice lists (how claims should be split and linked together).

Take care of tax

Tax is a tricky area, and should be part of a wider design discussion about where you want to bill your customers – in ECC or in CRM. This is something that you must decide early on – there are merits to both methods of billing, but your solution will likely depend on existing systems and what specific TCM functionality (such as extended rebates) you require.

Additionally, if your business is global, there are many legal and fiscal requirements for tax in different countries around the world. A clear understanding of specific tax requirements is important in case standard SAP TCM cannot handle them, and development is required. For example in the US claims are exempt from tax, whereas in Europe you can have several tax rates depending on the type of products that you sell, from full rate VAT to tax exempt products.

Consider a front-end for ECC

ECC does not have a front-end like the CRM WebUI. SAP TCM is a multi-system solution, so end-users will need to call ECC transactions if they want to, for example, log customer deductions. By developing a simple, fast-entry screen, which allows end-users to capture all information in one place, you can really help drive the business benefit of the solution.

Finally, be clear what you want from SAP TCM

Ask yourself these questions: are you interested in understanding claims at SKU level? Do you know the value to your business of investing the extra time to allocate these claimed sums to individual SKUs? Or are you happy to approve claimed sums at promotion level, leaving SKU profitability alone? Might you want to extend your TPM/TCM solution in the future to have advanced predictive and analytic capabilities?

These are just some of questions you should ask yourself to ensure your TCM solution is the best fit for you now, and is ready for you in the future. Because SAP TCM is a complex cross-system process, you must take the time before implementing it to get it right: know the existing TPM solution that you are building on and know what you want to use TCM for, identify what standard SAP TCM does not cover, think about tax up-front, and find out what it would take to create a front end for ECC.

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