The Company

Founded in 1912, Illinois Tool Works operates as a global manufacturing and business entity, specializing in various sectors across multiple nations. Their core focus lies in manufacturing excellence and serving as a vital link in their customers' supply chains. ITW caters to diverse markets worldwide, including prominent segments such as construction, automotive and welding as well as food and equipment.  

Their business strategy revolves around decentralization, allowing for swift decision-making at a local level. This approach acknowledges that those closest to the customers possess the insights necessary to drive success.  

Incentivizing Behaviors

ITW employee tells us, “For our business, rebates are not superfluous; they serve as a means to drive desired behaviors and reinforce contractual agreements. By incorporating specific terms and conditions, we can steer customers towards preferred products, optimizing efficiency and cost-effectiveness. This approach transcends mere transactional interactions, fostering a strategic partnership where both parties align their objectives and priorities.”

Forming Mutually Beneficial Relationships

ITW employee explains, “Our goal is to become an indispensable partner to our customers, understanding their needs and collaborating closely to achieve mutual success. This involves more than just hitting predetermined rebate thresholds; it entails actively engaging with customers to enhance value and strategic alignment. Ultimately, rebates serve as a tool for nurturing long-term relationships and solidifying our position as a trusted ally in the industry.”

80/20 Approach

Instead of simply offering a flat rebate based on hitting certain spending thresholds, ITW are transitioning towards an 80/20 approach with their rebate contracts. This shift signifies a departure from mere transactional interactions towards a deeper partnership with customers, aligning with their strategic objectives.

ITW employee explains, “We aim to embed ourselves within our customers' operations, understanding their core needs and priorities. By fostering a symbiotic 80/20 focused relationship, we can collaboratively drive mutual growth and prosperity.”

The Challenge

ITW’s previous rebate management approach lacked simplicity, instead veering into complexity with numerous areas prone to calculation errors. This complexity not only hindered efficiency but also increased the risk of inaccuracies due to formula errors or data mishaps.

ITW employee comments, “At ITW, we relied solely on Excel spreadsheets for managing rebates with its one-dimensional nature. However, as ITW embraces technology, there's a clear directive to drive aggressive growth. Through using Excel alone, our rebate process was becoming convoluted, and the spreadsheets themselves prone to crashes. Overall, not the most efficient approach.”

Improving Claims Management

To streamline the end-of-year claims process and reduce friction, ITW has been exploring ways to enhance efficiency further. Their focus is on implementing a solution that extracts final payment details effortlessly, presenting a breakdown of each customer's final payments along with supporting numbers and reports.

ITW employee comments, “With such a system in place, generating these final payment breakdowns could be as simple as clicking a button. This automated approach would not only save time but also minimize the need for extensive reviews with key account managers. Instead, I would provide them with the data for verification, receive approval via email, and seamlessly integrate the approved payments into our records or pass them on to the accounts department for processing.”

He continues, “By streamlining this administrative aspect, we can enhance overall efficiency and accuracy, freeing up valuable time and resources for more strategic endeavors. This approach holds the potential to significantly improve our end-of-year processes and enhance the overall workflow.”

The Software

Why Enable?

ITW employee tells us, “While other software providers may focus solely on managing accruals and administrative tasks, Enable offers much more in terms of driving commercial decisions and exploring new avenues for growth. We required a solution that challenges our strategies regarding rebates and commercial decisions, pushing us to constantly reassess and optimize. When I look at Enable, I see its potential extends far beyond managing rebates. It has the capability to drive growth, influence pricing and improve margins.”

Exceptional Support

ITW employee comments, “The support we've received has been exceptional. Whenever I reach out via email with a support request, they not only respond promptly but also provide thorough assistance. It's not just a matter of receiving a brief reply; they take the time to explain where to find specific features or functionalities and how they work. In addition, they always offer to assist further if needed. Overall, the support we've experienced has been nothing short of excellent.”

Attaining Growth

The primary focus at ITW remains on driving growth through rebates. This year, especially, scrutiny will be placed on performance in leveraging Enable and rebates to fulfil their growth commitments. Meeting these objectives will be pivotal, as it serves as a litmus test for the efficacy of their rebate strategies. Success in this regard not only validates their approach but also sets a precedent for future endeavors.  

ITW employee expands on this, “Through using Enable, we can analyze and identify accounts that are defending their position as well as those with significant growth potential. For accounts showing growth opportunities, we aim to adopt a more aggressive stance, particularly in the higher rebate tiers, incentivizing and encouraging further collaboration and expansion with our business.”

Simplicity and Transparency

ITW employee comments, “Transitioning to a unified system like Enable marks a significant step forward for ITW. Here, all aspects of rebate management seamlessly integrate into a single, cohesive platform. From accrual tracking to auditing checks, everything operates within a streamlined framework. This not only ensures simplicity in operations but also enhances transparency for our customers, who can easily access and understand their contract details.”

Shifting Rebate Structures

ITW employee says, “One significant area of focus has been on rebate structures, where we've identified issues such as insufficient and regressive structures with lower bandings but higher rebate percentages. In the past, such discrepancies may have gone unnoticed, especially in the era of PDF documentation. However, with Enable, we're able to identify these issues, question their validity, and ensure they are not approved if deemed inappropriate.”

Executive Dashboard

ITW employee comments, “The Executive Dashboard provides us with detailed insights into performance, enabling us to monitor and evaluate performance metrics more effectively. With these capabilities, we now have the flexibility to make adjustments mid-year to stimulate growth or address any issues that may arise. This tool promises to streamline our decision making, ultimately enhancing our ability to drive growth and optimize rebate performance.”

Advanced Reporting

ITW employee tells us, “Our goal is to leverage Advanced Reporting within Enable to further enhance our commercial approach, ensuring that every decision we make contributes to our success with future contracts, including those for 2025. Continuous improvement in managing rebate contracts remains a top priority, and optimizing our time management is a crucial aspect of achieving this goal.”

Watchlist App

ITW employee tells us, “The introduction of the Watchlist app has shifted our perspective on rebates, prompting us to develop a new approach. The focus will be on analyzing tier bandings to understand the potential risks to our revenue when customers move between bands. We want to ensure that such transitions result in adequate revenue returns and consider the percentage reinvestment in rebates.”

Consolidating Contracts Through Collaborator

ITW has started using Collaborator to consolidate all contracts into one accessible platform. However, there's ongoing development aimed at broadening understanding and involvement across the business. It's essential for ITW to extend this knowledge beyond just a few individuals, such as ITW employee or the finance team, to include the sales team as well. This represents an integral aspect of our ITW approach – training and developing their sales team to effectively manage these processes further.

ITW employee tells us, “Looking ahead, the ideal scenario is for the sales team to take on more responsibility in managing these contract processes, with finance overseeing final checks and ensuring everything runs smoothly. Collaboration has been straightforward thus far, with no reported issues from customers regarding the collaborative process. This indicates that our efforts to streamline and involve various teams are yielding positive results and paving the way for more efficient and collaborative operations in the future.”

Commercial Ownership and Negotiation of Contracts

In the UK, ITW is transitioning the responsibility for rebates from the finance department to the commercial teams. This shift leverages the commercial teams' deeper understanding of customer needs. The commercial team will finalize all contracts through Enable and integrate its analytical tools into the decision-making process.

An ITW employee notes, “The commercial team is central to negotiating contracts and fostering customer relationships. The aim is to empower them to handle contract creation with minimal finance involvement.”

They continue, “By managing negotiations through Enable’s software, we can gain better oversight and intervene more effectively before finalizing agreements, thereby strengthening our partnerships with customers.”

Exploring New Opportunities

For ITW, the focus is less on administrative tasks and more on exploring commercial opportunities and innovations. Instead of constantly dwelling on administrative burdens, they are looking ahead to what's new and what's next in terms of driving sales and achieving goals. This means actively seeking out partnerships and opportunities that align with their vision and leveraging Enable to its fullest potential to realize these opportunities.

ITW employee explains, “For example, the improvements we're seeing in rebates in the UK and Ireland can serve as a model for other divisions and business units across Europe, North America and even globally in the construction products sector. Additionally, there may be opportunities to explore incentive plans and rebate-like programs in other segments and industries. By thinking creatively and proactively seeking out mutually beneficial partnerships and opportunities, we can maximize the benefits of Enable and drive continued success for our business.”