Rebate Management Software Improves Supplier Rebates Accuracy for Thos. Somerville Co.
Thos. Somerville Co. a family owned, 160-year-old distributor of plumbing, heating, and air conditioning supplies with 21 trade locations, 9 kitchen and bath showrooms and sales revenue of over $200 million have recently selected Enable to gain better control of their supplier rebates.
Some of the features of Enable that interested the executive team at Thos. Somerville Co. was the ability to define product categories and items that qualify for select programs. They will also have the ability to make accurate projections without relying on manual processes across a number of separate systems as well as reconcile the real rebate income to projected. Plus, Enable will give them actionable data which will allow their purchasing team to evaluate the ROI on inventory spend and execute strategically.
We recently spoke to Scott Weir, Retired VP of Purchasing at Thos. Somerville Co. on how they manage rebates and finding Enable.
How were you managing your agreements before Enable?
I suppose we've done every iteration of managing rebates, which goes from Excel spreadsheets and custom Access databases. Yes, you can highlight all that stuff in a spreadsheet and have colored rows about all the different ones or sort and filter, but it does get to a point where you can't expand on it. You can't get better as it gets so much more complex and broad. You can't have one person doing it a hundred different ways in order to manage a hundred different rebate programs with a hundred different vendors. It just becomes overwhelming.
At what point then did you realize that a solution was needed?
A year or so ago. We made a change to our core ERP four years ago. The first couple of years would have been impossible to think about doing anything other than getting used to the new ERP. Then after that, it was a two-year cycle of we're not going to be able to make this work. We have to find a different way of doing it, so that's where we're at now, we are managing it outside of our system using software as a service.
What were you in particular looking to solve with a SAAS solution?
Being able to store all the information and making sure we were documenting each and every rebate program regardless of the value. Certainly there's 20% at return, 80% of the profit, but when the list is a hundred long and you want to make sure that you're getting all the money you're due from each and every one of them, because every dollar matters, you have to reduce the overall complexity of doing that.
What are you looking to gain with automation?
We all are trying to reduce costs of doing business, and one way of reducing that cost is having lesser people that are required to be involved in the entirety of the process. It has gotten to a point for us as a company that I'm a bottleneck. If I'm the one that's supposed to be doing all of the checking and checking and balancing and all that and making sure all the money makes it to the right place and comes when it's supposed to come, you just get to a point where one person can't do it anymore. So you either hire more people or you have to find another solution, which typically ends up being software. Automated software will help us get to the next level, where we can manage all of the rebates we currently have.
What tips would you give to anyone managing rebates?
To anybody that's out there trying to manage this on their own in spreadsheets, it's worth a look at a software solution to compare what you're able to do today with your current process and what is available out there that is an enhancement to the existing process. I mean, certainly we resisted spending money for a long time, but there's so many advantages to it that we found after we were given a presentation that says, "Here's all the different things that you can make happen." You can run reports that are much simpler than the way we could previously do it. We can now accurately project what the rebates will be to the end of the year. We can consolidate and easily see what all of our growth programs are going to be.
How do you go about building a business case?
Well, number one, what is provided that you're not doing today? So you look at a software solution that's going to have that X cost to it. What are the touch-points that you're going to get out of the solution that you can't perform today that would require time, money to learn how, or even other people to learn how to do it. You have to look at the things you're missing and we just looked at it as a way to enhance our process as much as anything else without having to add people in order to make the process more defined, more universal and better for everyone involved.
Enable does everything we have done in the past better
Enable does everything that we have done in the past better and in a more consistent format, a documented format, one that the auditors like a little better than a bunch of spreadsheets that we say, "Yeah, this works" and try to prove to them that our multitude of spreadsheets and access databases work as well as a one single user interface solution that most people have access to and can get reports on their own without having to come through the gatekeeper. One gatekeeper of the whole process is a problem.
I've said this before in my career here. What if I get hit by a bus? If I get hit by a bus, who's going to take this over? Where's the documentation? Where's the consistency? And having it in a software solution sort of solves that problem. There's training to use the software, but it's a consistent source of information from deal to deal to deal. The variables are what products, what's a percentage, and what's the basic criteria, which generally is able to be defined within the software.
With us relying on manual processes, there was an impending need to transfer 20+ years of specialist knowledge to more employees, Enable will drastically reduce the amount of training required and allow this process to be managed intuitively going forward.