Consistency. It's what consumers expect from everyday products such as toothpaste and soap, and it's what consumer packaged goods company Colgate-Palmolive strives for in everything it does, from manufacturing to financial performance.
Consistency also is the foundation of Colgate Business Planning, a business-IT initiative that has enabled the company to shift more than $100 million toward more profitable growth areas. CBP is about ensuring a consistent process and supporting technology for commercial investments: the funds are allocated for everything from rebates for retailers to promotional campaigns, special discounts, and logistics programs.
Many consumer goods companies measure commercial investment in terms of "uplift"--the difference between what they actually sold and what they would have sold had they not run a particular campaign. Colgate wanted deeper insight, with profit, loss, and ROI analysis down to individual products, brands, and customers (meaning major retailers).
Colgate is known for iconic brands such as Colgate toothpaste, Irish Spring soap, Ajax cleanser, and Palmolive dishwashing liquid. Brand recognition certainly helps sell those goods, but products don't fly off the shelves without careful planning and execution in cooperation with major drugstores, supermarket chains, and mass merchants. Promotional plans and execution have to be responsive to both the competition and ever-changing economic conditions.
The CBP process starts with top-down, 18-month brand and retail plans from corporate. Key account managers then build detailed, bottom-up plans to meet the overall goals for big retailers and customer groupings. As investments are made, post-promotion evaluations measure the cost, uplift, and profitability of each campaign by customer.
Account managers can adjust their plans as they discover what's working for particular salespeople, brands, products, retailers, and regions. Sales forecast accuracy also is measured against actual orders and shipments. "Plans are fed into our supply chain systems, so they get a demand signal that is based on approved plans, not salespeople's aspirations," Colgate-Palmolive CIO Tom Greene says.