A common structure is just one component of an automated solution for trade promotion claims processing. The roadmap to an automated solution must also have or enable the following:
- Readable and traceable claims: Each claim must be tracked from initiation to closure using distinguished identifiers. The system must accommodate (and be configurable) to any file type, file format or data type.
- Flexible rule engine:Users must be able to configure dynamic rules in the system to suit their promotion matching. A rule is the promotion search logic, which permits the users to set identification logic for any account, any claim type and any file format. The user-based rule engine allows incorporating continuous user knowledge into the matching algorithm to improve claim matching statistics.
- Organized segregation and accurate aggregation: The automated system needs to mimic the human segregation and aggregation logic for high match statistics. This is a critical piece of the solution and is vital to the cost-benefit analysis between automation and continuing to operate manually.
- Customer level configurations: Every customer account has a typical claim format and reporting pattern. The solution must provide a range of configuration options including customer account level claim templates and a variety of claim processing types.
- Cloud interface: Scalability and variable processing speed requirements for this process demand a cloud infrastructure. The inputs and outputs to the system need to be via cloud-based storage and inconfigurable templates to ensure faster interfacing with multiple external systems (financial and trade promotion management).
Automation Delivers Results
CPG companies can generate substantial benefits in multiple areas by enabling a more automated approach to trade claims processing. The entire process can be accelerated. Manual tasks like collating and segregating claims and deductions, maintaining backups and verifying claims always take more time. Automation can reduce the time spent on these tasks by at least 40%.
Automation improves tracking of operational efficiency by quickly determining claim validity. Customers want their claims processed quickly; it’s a major determinant of the quality of the relationship between them and the CPG company when promotion claims are not processed efficiently. Further efficiency gains can be achieved by reducing promotion duplication rates between claims, applications and departments by 50%-60%.
From our experience working with CPG companies, across all customers, losses of approximately 10- 15% of total abnormal loss result from incorrect claim processing and the recoveries are extremely meager. While an automated system would promise more, even a mere increase in the recovery by 10% for deductions, can result in sizable savings by plugging revenue leaks.
A more automated system is also a more flexible one, enabling non-technical users to easily interact with and understand the process. And, an automated system provides robust reporting and analytics. Automation can provide claims aging reports, customer level of claim discrepancies reports and functional reports for reconciliation between financial and claim systems are examples of reporting that is highly valued across departments to track and address claim processing performance.
A Proven Example of Successful Automation
A global chocolatier based in Australia would receive large volumes of claims in the last five days of every month. The high volume required the chocolatier to dedicate overtime and extended man hours to sift through the claims and allocate the same for timely payments. The claim processing accuracy was suffering due to the load and the company believed that they were losing almost 2% of the net profits in claim-related leakage. After Wipro deployed its Promax Auto Claims solution for the chocolatier, the end-of-month claim processing is 90% + automated with only exception handling still requiring a manual process. The automation was approached in a phased manner, following the 80:20 rule to tackle the retailers with the largest impact initially and gradually roll out to all distribution channels. The system is poised to create productivity savings of up to 40% and decrease the customer’s cash flow time by 10%.
A standalone promotion claims automation system can generate substantial benefits for CPG companies. And while the obvious benefit is the bottom-line impact for manufacturers, more efficient processes can improve relationships with retailer clients and free up more time that was previously used for manual processing. Improved and efficient resource utilization is a goal for any business. Automation provides measurable gains in any process and helps companies achieve a higher focus on core business operations.