In our report on The State of Special Pricing Agreements, we discovered how important SPAs are for many businesses’ trading strategies – as well as how many challenges they face in managing these complex deals.
One of the key difficulties that businesses managing SPAs face is maintaining visibility into their performance. Many businesses use spreadsheets (39.7%) or ERPs (36.8%) to manage their SPAs, but a lack of intelligent tracking features makes these systems rather ineffective when it comes to managing these complex deals. If a business using these systems elects to analyze their SPAs’ performance at all, it may require the transfer of data between third-party programs, introducing process delays and potential points of error.
In this blog, we’ll explore these common SPA visibility challenges and how businesses can close the gap in SPA analytics and reporting.
Lack of Visibility into SPA Performance
Roughly 1 in 5 respondents to our survey reported not having a clear understanding of how their SPAs are performing. Given the notorious complexity of SPAs, this trend isn’t surprising – but it is troubling.
The majority of businesses we surveyed have between 100 and 5,000 contracts – but an alarming 20% of respondents reported not knowing how many SPA contracts they have. A further 23.9% of respondents did not know how much was being claimed under these contracts, while 22.9% were uncertain if their annual SPA claims were greater or less than the annual value of their rebates.
These findings suggest that organizations across the supply chain need to gain greater visibility into SPA performance to ensure they are making the most of these powerful deals. Businesses need to know how many contracts they have, the value of their contracts, how those contracts are performing, which contracts are at risk and which contracts can bring about further opportunity – but without a capable solution to manage and analyze their SPAs, many businesses are left in the dark on these key aspects of their deals.
Lack of Analytics and Reporting Capabilities
Among the respondents we surveyed, analytics emerged as the top desired functionality in a SPA solution. 20.4% expressed the need for access to analytics to gain deeper insights into the performance of their SPA programs.
Ranking just below analytics were dashboards and reporting features. 16.7% of respondents emphasized the importance of having some dashboard and reporting functionality in a SPA tool. While being able to analyze the performance of your SPAs is critical to their success, equally important is the ability to generate meaningful reports (e.g. Transaction Reports or Special Pricing Support reports) with that data and share key info with teams, trading partners and other important parties.
There is a clear opportunity for improvement in the management and analysis of SPAs. With greater insight into their deals, businesses can identify areas of risk and opportunity, course-correct their SPA strategy and create better SPAs for the future.
Closing the Gap in SPA Analytics and Reporting
Major gaps in reporting and analytics capabilities exist for those who manage rebates – and especially for those handling SPAs. 46.5% of respondents reported claiming up to $3 million per year under their SPA contracts. That’s a lot of money at stake every year.
With millions of dollars on the line, businesses need as much visibility and insight into SPA performance as they can get. Both manufacturers and distributors need precise calculations to guarantee that payments and claims are accurate – and due to the narrow margins at play, precision is of paramount importance. Proper analytics and reporting features can make all the difference, ensuring that every cent owed is accounted for and paid out correctly.
To close this troubling gap, businesses must leave their unsuited legacy systems behind, freeing their team from the bounds of time-consuming and error-prone manual processes. Instead, we recommend implementing a dedicated software solution – such as the Enable platform – to manage your SPAs, with comprehensive analytics and reporting capabilities built to handle the intricacies of these complex deals.
Download our report for a deep dive into the current state of SPAs: how companies use and manage them, the unique challenges they pose as well as how your business can improve SPA processes and solutions.